Lithuania Moves Forward With European Union Presidency

It’s been little more than two decades since Lithuania escaped the forced embrace of the Soviet Union.  Since then, the Baltic State has gone through economic boom, bust, and boom.  Perhaps even harder has been dealing with its former master, Moscow.

Now, however, Vilnius faces perhaps its toughest job yet—holding the six month rotating presidency of the European Union.  As journalist Monika Griebeler declared:  “It’s a big job for a small country,” one with a population of barely three million, fewer than in Germany’s capital of Berlin.

Despite the many summits, agreements, bail-outs, and elections since the euro crisis broke, the EU’s future remains insecure.  Lithuanian President Dalia Grybauskaite noted that “there is a lack of affection from national governments in practically all member states” for the European Project “because the economic recovery is slower than we expected.”  She pointed to diminishing trust in national governments as reducing support for the EU as well.  Moreover, “national politicians sometimes, when they are unable to manage their country, they look to blame somebody outside,” namely the EU or Brussels.

Economic issues are likely to dominate, which creates a special challenge for Lithuania.  Although neighbor Latvia is set to enter the Euro zone in January, Vilnius remains outside the common currency.  The country may join in 2015, but cannot speak for the euro nations.

The first major issue facing Lithuania, the EU budget, has been largely resolved.  Grybauskaite was satisfied with the long-term agreement at the recent EU summit, terming it “a compromise between what the Council wanted and what the Parliament wanted.”  She was particularly pleased with the “front-loading” of the Youth Employment Initiative, which, she believed, “we can expect already in 2014 the first tranches to come into our economy, especially to solve youth unemployment and for new projects to start.”

More broadly, explained Grybauskaite, the Lithuanian presidency will be “about priorities, about what Europe needs and how it wants to respond to the economic situation.”   EU leaders will be meeting soon to discuss how “to save Europe’s young generation—give them a job and a future.”

She also hoped to emphasize energy, particularly the development of an interconnected internal European market.  Vilnius has a particular interest in the issue given its dependence on Russia for natural gas; indeed, last year Lithuania urged an EU investigation of Gazprom for monopoly practices.  Because of pipeline and power connections with other regions “we will be connected already in our own system and less dependent on Russia for gas.  Plus, in the new multi-annual financial framework we have additional resources devoted to the connections between Lithuania and Poland.”

The Lithuanian president is an advocate of shale gas, despite some “prejudice” in Europe against it.  She explained:  “In less than two years, if we won’t develop shale gas in Europe, the United States will start to sell shale gas to other countries, which today is already three or four times cheaper than the normal gas in the pipelines from the land.”  This will require action:  “We, Europeans, need to be prepared for it because today energy prices in Europe are absolutely uncompetitive.  We are paying a lot and this jeopardizes our recovery and development.”

Negotiations on a free trade agreement between the U.S. and EU has begun, but Grybauskaite warned of the difficulties which lie ahead:  “the understanding of free trade in Europe and the US is so different.  Until now it is so different that I can only imagine a free trade agreement if it will be absolutely, globally necessary for these two centers to be competitive.”  However, use of opt-outs could speed negotiations, she believed.  Lithuania’s foreign minister, Linas Linkevicius, termed the transatlantic FTA one of “two historical opportunities,” with the second being strengthened commercial relations with the Eastern Partnership nations.

Vilnius already helped organize a seminar in Paris on strengthening the EU role in crisis management.  Among Lithuania’s priorities for the continent’s Common Security and Defense Policy are “intensified security and defense co-operation with its Eastern partners, and developing military dimensions of energy security, with a view of incorporating these issues into the CSDP.”

In December, near the end of Lithuania’s presidency, the European Council also will take up defense issues.  She called for “more coordinated efforts on defense” to deal with terrorism, as well as attention to Europe’s defense industry.  Moreover, “We have to review our role in NATO, as the US is asking Europe to be more active in defense policies.”  Finally, Grybauskaite saw “the necessity of deeper integration, especially seeing that globalized tendencies in security in the world are changing.”

Related to both energy and security is the Eastern Partnership summit scheduled for November in Vilnius, with Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine set to attend.  Lithuania hopes for the signing of an EU association agreement with Kyiv, though that depends on the organization’s assessment of Ukraine’s political reforms.  Moreover, Russia remains on Grybauskaite’s mind:  the pressure “can’t get any worse.  Nothing worse can happen at this stage.”

Beyond all of the substantive discussions, the EU presidency offers Lithuania the opportunity to showcase itself.  Rolandas Paksas, a Member of the European Parliament, observed:  “The main privilege of the state holding the presidency is the exceptional possibility to present itself to Europe and the world by displaying its negotiating skills in addition to its cultural and intellectual potential.  Lithuania will also take this opportunity.  It is estimated that during the period of the presidency about 30,000 guests will come to our country, with more than 150 events planned to showcase our culture.”

Lithuania has come far since the collapse of the Soviet Union.  Despite Moscow’s best efforts to preserve old ties, holding the EU presidency will firmly weld Vilnius to the West.