In his exclusive interview for The Ukrainian Week, Lithuania’s Prime-Minister Algirdas Butkevičius talks about the importance of the Association Agreement for Ukraine at the Vilnius Summit and the impact of European integration on his country
Lithuania as the host of the Eastern Partnership Summit in Vilnius is a strong lobbyist of Ukraine’s European integration. Its current Prime-Minister Algirdas Butkevičius is not just a top politician of his state – this year’s President of the EU Council – but an advocate of Ukraine in the EU. Lithuania’s major task for the presidency is to draw the attention of all 28 EU member-states to Eastern Partnership and Ukraine. Lithuanian government believes that the success of the Vilnius Summit and the signing of the Association Agreement is the test for the EU: if the agreement is not signed, it will damage the EU’s image while Eastern Partnership programme will prove inefficient and unpromising. It is essentially the stance and proactive actions of the official Vilnius that determine whether Ukraine will remain in the grey zone turning into a buffer zone between Russia and the EU, or whether it will soon gain more or less equal rights among European states.
Lithuania is a good example of how consolidated socio-political will becomes one of the major pillars for de-Sovietization and modernization in a country. Hopefully, several more post-Soviet states will soon return to Europe thanks to Vilnius which understands them and Europe equally well.
UW: Russian propaganda in the Baltic States repeats over and over again that the union with Russia would guarantee thriving for them. In the EU, they are turning into depressed peripheral countries while their citizens migrate in search of better jobs on a massive scale. Such clichés are used to discourage countries that want European integration. But they are easy to overturn. Lithuania’s example can do that thanks to the progress it made after just ten years in the EU. Is that right?
Following the restoration of independence, the next natural step for Lithuania was to return to the European family. Geographically, historically and culturally Lithuania belongs to Europe, we share the same values of democracy, freedom of speech, human rights, the rule of law, solidarity, etc. So it was only natural for us to seek membership in European and Euro-Atlantic institutions. Another key factor in support of EU membership was the awareness that the legal, economic and other reforms were carried out for the benefit of our people. European integration was the process where all major political parties, businesses and society joined efforts for the same goal that united Lithuania – the prospect of membership in the EU.
The reforms did cause some difficulties, but in the long run they turned out to be beneficial. Today, all the citizens of Lithuania can live, work and study where they want, setting up a business has become a relatively easy task anywhere in Europe. We fully share the benefits of being part of the single market: our businesses can export their products or services freely to a market of half a billion consumers. Some prices of daily services have dramatically decreased. For instance, due to the single European market, prices of mobile calls have dropped by nearly 70%. As a matter of fact, Lithuania enjoys the lowest call rates in the EU. In addition, the membership in the EU is a quality catalyst for national economies.
Lithuanians have – and have always had – a positive attitude towards the EU. According to the latest Eurobarometer survey, 65% of Lithuanians (62% in the EU) feel that they are citizens of the EU, and 70% of Lithuanians (EU-average is at 56%) think that the most positive result of the EU is free movement of people, goods and services within the EU. Furthermore, 64% of Lithuanians (49% in the EU) are optimistic about the future of the EU and 72% (67% in the EU) think that EU voice counts in the world. Another Eurobarometer poll from May 2011 showed that 67% of Lithuanians believe that our country has benefited from the EU membership. There can be no doubts that there are solid reasons for such confidence.
UW: Lithuania has received almost EUR 9bn under various programmes of EU funds. This is significant financial assistance for Central and Eastern Europe. Would Lithuania manage to conduct all transformations without this aid?
We are delighted to know that according to the new data of the European Commission, Lithuania is a leading member state with regard to the share of the allocated EU structural funds. More than EUR 4.2bn have been paid to Lithuania out of all the EU structural funds, i. e. 63.4% of the EU structural funds allocated for the entire period of 2007–2013. Lithuania is ahead of all other EU member-states by the share of interim payments from all funds allocated by the European Commission. Also, Lithuania received a title of the Region of Excellence, which is established by the European Commission and awarded to regions that are most advanced and the best in terms of making use of the EU funds and pursuing the aims of the Cohesion Policy.
Assistance of the EU structural funds offers the country opportunities to implement the national long-term objective: to ensure the continuous growth of the country’s economy and reduce disparities of economic development between Lithuania and the EU average. To this end, Lithuania seeks to improve its GDP growth and create more and better jobs.
Structure of the EU structural assistance to Lithuania for the period 2004–2011 shows that approximately two-thirds of the EU structural funds were absorbed by the country’s economy through public sector investments, approximately a tenth, through material investments of the private sector, and the remaining share was allocated to the general production (activities that are not related to the creation of material wealth, such as training, studies, etc.). Short-term effects of the assistance (the demand side) were mostly felt by the construction sector. More than half of the assistance of the analysed period (57.3 per cent) was used to finance construction and other relevant works; 31.6 per cent of the assistance went to companies in the private service sector that were implementing various activities or providing services under funded projects; and 11 per cent of the assistance was given to the public service sector. Long-term economic effects (the supply side) were primarily observed in the general economic infrastructure (78.6% of the overall assistance was attributed to this sphere), 18.8% was given to the human resources development, and 2.6% went to R&D.
We already know that the EU structural assistance for 2004–2013 led to an increase in the average annual growth of the real GDP by 1.57p.p. in terms of comparable prices in 2005.
A total of LTL 66.36bn of additional nominal GDP is projected to be created in the period of 2004–2015, while the integrated return is to reach 1.97, i.e. every invested lita is to bring a return of LTL 1.97 in the nominal GDP. Financial engineering instruments, introduced during the programming period of 2007–2013 provided an additional impetus for both the real GDP growth and a higher return in the nominal GDP, as they prompted a relative reduction in the cost of investment and indirectly stimulated large private investment.
EU structural fund investments significantly help to address the unemployment problem in Lithuania. At the end of 2011, the number of jobs that were newly created and/or retained due to the EU structural assistance accounted for 115,500, i.e. 9.1% of all jobs, and reduced unemployment rate by 7.4 p.p. It is projected that by the end of 2013, 154,000 new jobs will be created and unemployment rate will drop by 10.1 p.p. as a result of the assistance.
UW: Our countries for a long time were together in the Soviet Union. How ordinary, common Lithuanians interested in events in Ukraine and its geopolitical and civilization choice between the EU and integration organizations headed by Russia? Is there any understanding in Lithuanian society and politics about importance of Ukraine's geopolitical and civilization choice for the future of Central and Eastern Europe in general? Do you also support the idea that it is only Ukrainian attempts to "sell their geopolitical position"?
Lithuanian – Ukrainian relations predate the Soviet Union times. We share the heritage of the Grand Duchy of Lithuania and we also share European identity and European agenda. Of course, the experience of living under Soviet regime for 50 years (in case of Ukraine, even longer) did not go away altogether. This experience brings our two nations even closer together and helps to better understand the political imperative to break away from the Soviet tradition. Though, it is not surprising that for the new generation of Lithuanians Western European capitals (London, Berlin, Paris and etc.) have become closer than Kyiv (the same can be said about Minsk, Chisinau, Tbilisi, Yerevan or Baku). In this context, free movement of people (as free movement of goods, capital, services, and principles on which the EU is based) deleted the boundary lines between the EU member states, opened possibilities for closer cooperation and contacts. Visa free regime between the EU and Ukraine could facilitate contacts between people, enhance information about each other. And we have an instrument for it – the Visa Liberalization Action Plan – and it only depends on Ukraine as regards the fulfilment of VLAP criteria and getting visa free regime.
Ukraine, as a sovereign country, has the right to decide which path to follow – that of the European Union or the Eurasian Union. We will respect any choice Ukraine will make. Yet, I remain convinced that Ukraine belongs to the EU family of nations and that the interests of common Ukrainians and business people would be better served through the ever closer association with the EU.
Also, the decisive choice of Ukraine to align its future development with the European Union model would strengthen the EU in many ways as well and would bring more stability and prosperity to the European continent.
Recently signs of USA leadership frustration from relations with Putin's Russia "reset" failures became visible. In particular, they resulted in the rejection of Obama's meeting with Putin. On the other hand it is clear that Moscow took advantage of the decline in U.S. interest in the former Soviet Union after 2008 in order to develop their pressure on the this region countries. Do you think it possible to return to an active U.S. presence in the region and whether it will contribute to the strengthening of security in it?
Following the end of the Cold War, we have witnessed overall positive tendencies in European security, and the remaining challenges should be addressed through dialogue and cooperative approach. As a member of NATO, the US maintains its commitment to Allied security and the overall stability in Europe, including our region.
UW: Is there a high risk that the November summit will fail and the EU-Ukraine Association Agreement will not be signed? Does the EU realize the possibility of outright provocation from Russia which has leverage both in Ukraine and in several European capitals?
Negotiators of the EU and Ukraine did a huge work: the text of the Agreement was agreed (it took six years) and all our efforts have been consolidated for the final aim: signature of the EU-Ukraine Association Agreement and Deep and Comprehensive Free Trade Agreement (AA/DCFTA) during the Eastern Partnership Summit in Vilnius. The EU doesn’t have any plan B - and doesn’t need one - and I strongly believe that the end of November is the best time for the signature of AA/DCFTA. Russia has to respect sovereign choice of Ukraine. Economic threats and pressure is harmful not only for Ukrainian economy, but also for Russia and its business operators. It is clear that the earliest possible start of provisional application of AA/DCFTA is within the best interest of everyone.
UW: Russia recently has increased military activity in the Baltic region. Topic concerning oppression of Russian citizens in neighbouring Lithuania, Latvia and Estonia is actively pumped now. Do Lithuanians feel themselves sufficiently protected under the umbrella of NATO? It is widely believed that in the case of Russia’s start actual military combat actions (modelled alike Georgia's 2008 campaign) NATO allies will not ready for full participation in the protection of its Baltic allies?
There is no doubt that NATO collective defence commitment is credible and Allies have sufficient capabilities to implement it, which has been an important stability factor in the entire Euro-Atlantic area. Furthermore, Allies continue to make full use of the existing NATO-Russia Council, which provides a good framework to address issues of transparency and mutual confidence as well as the remaining concerns regarding military activities and other outstanding issues.
How Lithuanian leaders see the common interests of the Baltic States in foreign policy? How the coordinated action of three states in the international arena can affect relations with Russia and strengthening their position within the EU?
Leaders of the three Baltic States exchange their opinions regularly and coordinate their positions on the vast number of issues related to trilateral as well as the EU and NATO agendas, such as military cooperation, cyberdefence, energy security, trade relations, environment protection, cultural exchange, and others. We seek to find a common denominator among the Lithuanian, Latvian and Estonian positions, and thus to speak in one voice within the international community. Just recently our three Presidents met with US President Barack Obama to once again reaffirm the importance of the strategic partnership of our trio as well as reconfirm our strong ties and commitments to our closest international allies. Being in the direct neighbourhood with Russia, Lithuania, Latvia, and Estonia share special responsibility for the Baltic-Russian as well as EU-Russian relations. We all strive that it is a constructive and pragmatic cooperation based on reciprocal respect and shared interests.
UW: There have been talks of energy diversification in Ukraine for a while now. This issue is equally important for Lithuania which buys Russian gas at the highest price in Europe. However, Lithuania has initiated and implemented the project to build an LNG terminal and implemented the EU Third Energy Package. How has Vilnius accomplished this?
Lithuania, although an “energy island” within the EU, is one of the most active promoters and supporters of the 2011 EU Council decision to create a fully functioning internal EU energy market by 2014 and to eliminate energy isolation by 2015. To increase security of supply, competitiveness and sustainability in the energy sector, Lithuania is implementing a number of strategic energy projects: power interconnections with Poland and Sweden, gas interconnection with Poland, and LNG terminal. The 2009 European Commission’s initiative to deliver the Baltic Energy Market Interconnection Plan (BEMIP) (a comprehensive Action Plan on energy interconnections and market improvement in the Baltic Sea Region) provided clear steps and concrete measures to be taken to better connect the Baltic countries to the wider EU energy networks. Therefore most projects that are currently under implementation are of regional significance and must be carried out in close cooperation with our regional partners.
On the other hand, having necessary gas and electricity interconnections is not enough. Establishment of necessary legal basis to promote transparency and competitiveness in the energy sector is equally important. Successful implementation of the 3rd EU energy package also highly depends on cooperation and talks with energy companies, and of course in Lithuania’s case the European Commission’s support has been extremely important throughout the whole process.
UW: What are primary differences between post-communist transformations in Ukraine and Lithuania? Why are the two former Soviet countries in very different positions now?
More than twenty years have passed since Lithuania and Ukraine gained independence, but new challenges are emerging. I am convinced that the future and prosperity of Central Europe inevitably depends on our commitments to build democracy, develop liberal society, and follow common values.
Following the restoration of its independence, Lithuania immediately declared its choice: integration into the EU and NATO; and adopted the policy of restoration of historical justice, better known as the slogan “back to Europe”. All political parties reached a consensus on the membership in the EU and NATO as the principal foreign policy objective. And this strategy was successful: Lithuania became member of the EU and NATO in 2004.
The abovementioned elements show the importance of a clear choice - or determination - and consensus.
Obviously, this is a long-term process that requires both strong will and resources, but Lithuania, being one of the closest friends, encourages Ukraine to use all the opportunities provided by the Eastern Partnership initiative. It is the right moment once more to demonstrate how partnership between the EU and its neighbours can bring changes to the societies in transition.
UW: The problems of the Ukrainian economy stem from its oligarch model. How did Lithuania manage to avoid this? In your country, this problem is not as dominating as it is in Ukraine, although scandals about the influence of business on the government sometimes erupt?
In order to enable constructive cooperation between the government and the business, which is very important, Lithuania seeks to make the legislative process and decision-making more open and transparent. Last year saw the adoption of the Law on Legislative Framework, which provides for a possibility of making legislative procedures public in electronic space, thus ensuring their transparency and timely consultations with the public. The law also contains an important provision stating that if the initial legislation has been drafted by a lobbyist, it should be made public (i.e. placed in the Legislative Information System). This enables closer control over lobbying activities, which, although governed by a special Law on Lobbying Activities, is not yet sufficiently effective, in our opinion.
The relevant legal acts provide for an obligation to publicize information about official meetings of state and municipal authorities and decision-making bodies, as well as planned legislative initiatives, legislation promoters, and non-civil servants that are participants in the legislative process; they also provide for a liability for the submission of knowingly misleading information that can have an impact on the proposed legal regulation.
Another important step taken in the early 2012 is provisions of the Law on Funding of, and Control Over Funding of Political Parties and Political Campaigns, which abolished the right of individuals and legal entities to donate to political parties, and legal entities to donate to political campaign participants.
The fight against corruption is among the priorities of the 16th Government of the Republic of Lithuania. The Government Programme provides for a range of anti-corruption measures that should further strengthen the system of fight against corruption and ensure efficiency of fight against corruption, also on the basis of recommendations for implementation of international anti-corruption documents, which Lithuania has ratified, provided by the Group of States Against Corruption (GRECO) and UN experts during the evaluation period.
At the end of August, the government submitted to the Seimas a draft bill amending and supplementing the National Programme of the Fight against Corruption for 2011–2014, which is the main national anti-corruption framework that brings together the state’s anti-corruption efforts. This amends and supplements the action plan for the programme implementation, seeking to ensure an effective fight against corruption in the spheres of public procurement, health, determination of disability, etc.
Algirdas Butkevičius has served as Lithuania’s Prime-Minister since December 2012. In 1996–2008, he was member of the 7th, 8th, 9th and 10th Seimas, elected as candidate of the Lithuanian Social Democratic Party. He served in a number of parliamentary committees, including the Committee on Budget and Finance (Chairman in 2001–2004), Committee on European Affairs (2005–2006) and Committee on Economics (2006–2008). In 2004–2005, Mr. Butkevičius was Minister of Finance in the 12th and 13th Governments of the Republic of Lithuania. From 2006 to 2008 he served as Minister of Transport and Communications. In 2009, he became the leader of the Social Democratic Party of Lithuania (SPDL). During the 2012 parliamentary election, Mr. Butkevičius was among the few candidates who were elected in the first round of the popular vote. On 22 November 2012, he was elected by the Seimas to be Prime-Minister-designate. He was appointed as Prime-Minister by presidential decree on 7 December 2012 and his cabinet was sworn on 13 December, following the approval of the governmental program by Parliament.