IT IS IMPORTANT TO CREATE STRONG AND

COMMON EU ENERGY POLICY -

Valdas Adamkus, President of Lithuania

 

«Lithuania

shows big attention to South Caucasus region and political-economic cooperation with Azerbaijan. I would like to note that after the Krakow Energy Summit Azerbaijan-Lithuanian relations were enriched by one more very important aspect. Odessa-Brody-Plotsk-Gdansk oil pipeline is one of the most significant oil supply alternatives not only for participating countries but also for the whole EU. Therefore, if this project is fully implemented, relations between Lithuania and Azerbaijan will significantly intensify», - said Valdas Adamkus, President of Lithuania, in his exclusive interview with Caspian Energy Investor.

 

Caspian Energy (CE): Mr. Adamkus, how would you evaluate the current development of Lithuania as a part of the European economic space?

Valdas Adamkus, President of Lithuania: There is no doubt that Lithuania is successfully taking advantage of its integration in the European economic space. When Lithuania started the negotiations with EU, its GDP level per capita accounted for slightly more than a third of EU15 level. Now its GDP level per capita is close to 2/3 of EU 27 level. However, more efforts need to be taken to complete the economic convergence with the old EU Member States.

In terms of financial policies, I am very pleased to see that the specific action has been finally taken to reduce taxes in 2006. It is a step that I started to advocate strongly several years ago. It is crucial to reduce labor taxation, eliminate bureaucratic barriers thus improving investment environment in order to attract more foreign direct investment to Lithuania.

In statistical terms, the real growth of the Lithuanian GDP this year continues to be one of the highest at above 8%. Despite such rapid growth, our country has demonstrated the best results in terms of inflation control among the Baltic States and is expected to join the Eurozone in 2010. In the World Bank Doing Business report, measuring the overall regulatory burden for business, Lithuania was granted the 16th place in the world.

 

CE: What reforms should be carried out in the country in order to avoid being "a state with the unused potential" as you mentioned in your annual report in April 2007?

Valdas Adamkus: From the very beginning of my term of office, I have repeatedly underlined that if we wish to reform our social system and create an economy based on qualified labor force, knowledge, and advanced technologies, we need to reform Lithuania's system of higher education and studies.

We also need more dynamic efforts of the State to attract foreign investment and tourists to Lithuania and to present Lithuanian culture to the world community. A new stage of programming EU structural funds for 2007-2013 begins this year. We are facing a unique opportunity to achieve the strategic goal of catching up with Europe in economic terms - a task that I had put forth earlier - by coordinating EU structural support with domestic reforms.

 

CE: What perspectives is Lithuania going to envisage after its accession to the EU? What do you expect from the new stage of programming the EU structural aid for 2007-2013 launched this year?

Valdas Adamkus: For more than three years now Lithuania has been a full-fledged member of the European Union. Summarizing this period, I would say that we have successfully integrated into the EU activities.

It is important that together with other countries we address various EU issues as equal partners, including global international matters, budget, economy, and many other questions. Lithuania's proposals on some issues are heard and valued, e.g. EU relations with the Eastern neighbors (Russia, Ukraine, Moldova, and Caucasus countries) and common EU energy policy. I was delighted to make personal contribution to resolving the protracted debate over the EU institutional reform at the European Council meeting in June.

EU support and funds assist our economic growth and domestic reforms. In 2007-2013, Lithuania will receive a total of 6.6 billion euros in structural support and up to 2.8 billion euros in agricultural support. We plan to invest EU structural support funds in human resources, knowledge society, competitiveness, innovations, infrastructure, and regional development.

 

CE: Today, energy security-related issues are brought to the foreground across the globe. What are preconditions for ensuring energy security of Lithuania and the European Union as a whole?

Valdas Adamkus: One of the main preconditions for ensuring energy security of Lithuania is diversification of energy import sources and routes. In our case, it would enable us to change our undesirable status of "an energy island" by connecting Lithuanian electricity and gas markets to the EU energy network.

Regarding the energy security of the EU, it is important to create strong and common EU energy policy and act as a one player in global arena. Here, solidarity inside the EU members is of vital importance.

However, trust and confidence among the main energy producers, consumers and transit countries is a universal condition ensuring energy security in all cases.

 

CE: Is there a potential to diversify energy supply sources to Lithuania? What directions will be regarded as primary ones?

Valdas Adamkus: Our ability to attain strategic energy goals greatly depends on efficient cooperation with neighboring countries. Building a bridge between Europe and the "energy island" where Lithuania is currently located will depend on our ability to work together.

The European Union stands for a single market, be it products, services, or energy. Therefore, we aim to fully integrate the Lithuanian energy market into the EU space. This can be done by connecting our electricity system with Sweden, covering a very efficient Scandinavian energy market, and Poland, a strategic partner in many areas.

Last year, many positive changes were effected in this field, including the successful sale of Mazeikiu Nafta to the European partners, agreements with Poland on connecting natural gas and power grids, and plans of Lithuania, Poland, Latvia and Estonia to build jointly a new nuclear power plant. In autumn, the feasibility study of electricity connection between Lithuania and Sweden is to be unveiled which I hope will give a green light for the commencement of actual construction.

Joint projects with neighboring countries, which will help to diversify our energy sources, are on top of Lithuania's list of priorities for both energy sector and foreign policy agenda.

 

CE: How unanimous are the views of the EU Member States? Do they have common views on energy security-related issues?

Valdas Adamkus: A decisive step was taken last March when the European leaders agreed on the action plan to implement a single European energy policy which, I hope, will lead to an integrated internal market. I hope that decisions taken will help to coordinate priority projects more efficiently at the EU level and design effective mechanisms for energy crisis management and that together we will seek for energy supply diversification, combat climate change, and attain other energy security goals.

The European leaders reached an agreement on maintaining more intense cooperation ties with Central Asian and Caspian regions, and the last June they approved a new EU strategy for Central Asia. It demonstrates that the European Union can coordinate the interests of all Member States and agree on unified policy guidelines. On the other hand, it is evident that there is more work to be done if we wish to fulfill common tasks that we have set forth.

 

CE: How would you evaluate the new level of the relations between Azerbaijan and Lithuania after the Krakow Energy Summit? What directions should be assigned high priority?

Valdas Adamkus: Lithuania shows big attention to South Caucasus region and political-economic cooperation with Azerbaijan. I would like to note that after the Krakow Energy Summit Azerbaijan-Lithuanian relations were enriched by one more very important aspect. Delegates of both countries are taking part in the intergovernmental working group to build a corridor--Odessa-Brody-Plock-Gdansk pipeline--for the transportation of Caspian oil to the European and world markets. Odessa-Brody-Plotsk-Gdansk oil pipeline is one of the most significant oil supply alternatives not only for participating countries but also for the whole EU. Therefore, if this project is fully implemented, relations between Lithuania and Azerbaijan will significantly intensify.

 

CE: What are the prospects of the forthcoming Energy Summit in Vilnius? What prospects do the EU countries expect from creation of a new energy corridor? What is the probable extent of the Summit enlargement?

Valdas Adamkus: Vilnius Energy Summit will be devoted to issues of the external EU energy policy towards Eastern neighbors. The main idea of the summit is to find the most appropriate means for successful and mutually beneficial cooperation among the main energy producers, consumers and transit countries. Therefore, we have the ambition to expand the event from regional to a broader European level by including issues of transatlantic cooperation in energy field. Leaders of Germany, France, Spain, UK, Portugal, the Caspian, Black Sea and Baltic Sea regions, Scandinavian countries, Russia as well as President of European Commission and delegates from the USA are invited to participate in this important high-level energy summit.

 

CE: How feasible is that Lithuania would purchase Caspian gas?

Valdas Adamkus: Lithuania is willing to be able to choose a gas import source. At the moment, the connection of the Lithuanian and Polish natural gas systems seems to be the most probable project. In this case, Lithuania could gain direct access to Caspian gas via Nabucco pipeline if it was extended to Poland. Therefore, Lithuania strongly supports the fastest possible way of Nabucco project implementation.

 

CE: What is the Lithuania's attitude towards GUAM? Does Lithuania plan to join this international organization?

Valdas Adamkus: We welcome and enthusiastically support the determination of Azerbaijan, Georgia, Moldova and Ukraine to consolidate democracy, stability and prosperity in the region and to work closely through coordinated and united efforts to achieve these aims. 

Lithuania appreciates its involvement in the activities of GUAM since the organization tackles questions that are vital to Lithuania and the whole Europe, for example, consolidation of democracy, energy security, development of transport networks, "frozen conflicts" and others. Furthermore, Lithuania is glad to see that GUAM's work and current reforms in your countries, bring the EU and GUAM closer to each other.

Lithuania actively tries to ensure that the EU would be open for tourism, business, different exchanges for citizens of such countries as GUAM. Visa facilitation agreements, EU financial support amounting to billions of euros, reduced trade barriers provide an added value for people. GUAM countries should also actively promote these principles. If you retain momentum and vigorously continue on the path of reforms, then the EU will further enhance and deepen its relations. You can count on our full support in this matter. 

I am pleased to note that today GUAM serves as a model for all countries in the region.

 

CE: What do you expect from the Lithuania's presidency in the European Union in 2013? What tasks should the country face in relation to this matter? How successful was the Lithuania's presidency in the Council for Economic and Social Affairs of the United Nations Organizations this year?

Valdas Adamkus: It is yet difficult to forecast future developments. However, as the time approaches for Lithuania's presidency of the EU in 2013, we can foresee heated discussions on the EU enlargement (e.g. Turkey, the Balkan countries), EU institutional changes (expected), newly formed Commission, newly elected European Parliament, new EU budget starting from 2014, and new Government of Lithuania after the parliamentary elections in 2012. I would also guess that we will have to participate more actively in presenting the EU position in its relations with the third world countries (Asia, Africa, and Latin America).

It is a major challenge to our country but also it is an excellent opportunity to create a favorable image of Lithuania and promote its name around the world. We have already started preparations for the EU presidency. At the moment, with six years to go before Lithuania's presidency of the EU, we are focused on building adequate infrastructure and preparing civil servants to meet the required performance standards. We are trying to take over the experience of our partners in the EU.

Speaking about Lithuania's presidency of the United Nations Economic and Social Council (ECOSOC), we will start appraising the results only at the end of this year and probably we will see the actual significance the work done only in the further future.  Presently, the Council is undergoing a process of reforms and Lithuania faces a challenge of finding the most efficient way to carry out relevant reforms. The ECOSOC should evolve into a forum of lively topical debates and useful practical recommendations and it should gain more power in the implementation of decisions.

We would like the ECOSOC to play a more significant role in ensuring long-term sustainable development in post-conflict countries. We are trying to ensure that the international community paid more coordinated and consistent attention to climate change. Our long-term commitment to reduce consequences of climate change and ensure ecologically sustainable economic growth is our responsibility for future generations. 

 

CE: What are the outcomes of the agreement between Lithuania and Poland regarding joint gas and electricity supply systems?

Valdas Adamkus: On the 2nd of March 2007, Prime Ministers of Lithuania and Poland signed a communiqué on cooperation in the energy field. In addition to other questions, the importance of the Lithuanian-Polish Electricity Bridge and indication of possible Lithuanian gas system connection with the Polish network were mentioned.

I am pleased to say that these projects are moving forward smoothly. The feasibility study on the Lithuanian-Polish Electricity Bridge is already done and a company for the joint project will be established in September 2007. We believe that this project will be implemented without any delay because electricity bridge with Poland has not only geostrategic but also economic benefits. Moreover, it is vital for the new NPP project as well as for the Baltic States in joining the UCTE.

Regarding the Lithuanian-Polish gas pipeline connection we also seek for constructive cooperation. In June 2007, we agreed to set up a working group to analyze economic and technical aspects of the project. The first meeting is scheduled to take place September 2007. I believe they will find answers to the questions of concern in the nearest future.

CE:  What obstacles should be removed for Lithuania to agree to accept the EU Constitution?

Valdas Adamkus: Lithuania was the first EU member state to ratify the Treaty on the Constitution for Europe in 2004. After constitutional referendums in the Netherlands and France failed, heated discussions started on the relevance of this treaty.

I am delighted that an important decision acceptable to all 27 member states was reached at the European Council in June. They decided to convene an inter-governmental conference for the treaty amendments. I hope that the conference will work smoothly and effectively and that it will complete its tasks by the end of 2007 so that the new treaty could enter into force before the elections to the European Parliament scheduled for June 2009.

 

CE:  How successful was the sale of Mazeikiu Nafta Concern?

Valdas Adamkus: I mentioned this in my State of the Union and continue to regard the sale of Mazeikiu Nafta as a successful transaction. We acquired a solid strategic partner which continues to implement the modernization program of the plant and has ambitious growth plans. The received funds from the sale made it possible to deliver financial commitments assumed by the State to its citizens and take a major step towards greater energy security of Lithuania. Nevertheless, we have to continue working consistently and pursue other strategic energy projects.

 

CE: Is Lithuania planning to develop alternative power industry?

Valdas Adamkus: In 2005, Lithuania produced 11% of its energy from renewable energy resources. Pursuant to the new energy strategy, Lithuania aims to reach 20% of renewable in the energy mix by 2025.

This is very a ambitious but achievable target. The sectors of forestry and agriculture need to upgrade their infrastructure which would allow current production waste to be transported and used for energy production. Wind and hydro energy is also to be developed. However, the most environmentally friendly policy means that you should not use energy if you can. Thus, energy conservation is very important, and Lithuania has big potential to reduce energy consumption, especially in the central heating sector. The Government recently passed a number of legal acts pursuant to which would a state subsidy amounting to 50% could be given for insulation of old houses which would help to reduce energy amount needed to heat houses up to 4 times.

 

Thank you for the interview