Volume 3 – Number 3

Lithuania Accuses Russia of Stalling on Kaliningrad (Koenigsberg) Transit Talks
Lithuanian officials claim Russia is impeding talks on implementing the transit agreements made between the EU and Russia regarding the Russian enclave Kaliningrad (Koenigsberg), reports RFE/RL (3/31/03). The agreement provided for special travel documents for Russians to transit through Lithuania to Kaliningrad, making their journey easier and cheaper than with regular visas. The agreement is to take force July 1, 2003. Lithuanian officials say they do not know why Russia is backing off from its commitment. “I think Russia wants to test the unity of EU and hopes that the EU countries are now involved in other problems and will be less likely to defend Lithuanian interests,” said Gediminas Kirkilas, Lithuania’s presidential envoy on the Kaliningrad issue.

Latvia’s Revenue Losses Due to Russian Boycott of Latvia’s Port Estimated at $200 Million
As a result of the Russian government owned oil-pipeline company Trasneft’s unilateral action to stop oil exports through the Latvian Port of Ventspils, Latvia stands to loose $200 million in transit revenues, reports LETA (3/31/03). Latvian officials hold that this is deliberate political pressure by the Russian government to take over the Latvian oil transit facility. “Russian officials have made unacceptable proposals for obtaining ownership rights in “Ventspils Nafta” in order to gain strategic control over Latvia’s oil transit infrastructure,” states a report by a government joint task force. Latvia’s government has appealed to the EU for assistance in stopping the Russian boycott.

Lithuania Gives Foreigners the Right to Purchase Land
By a voice vote, Lithuania’s Parliament approved a bill implementing a constitutional amendment granting foreigners the right to purchase agricultural land (RFE/RL 2/10/03). The amendment will permit legal and physical entities from EU and NATO countries to purchase farmland in Lithuania after a seven-year transition period.

Baltic Countries Lead EU Candidate States in Growth of GDP
The EU bureau of statistics Eurostat reports that the growth of Latvia’s GDP was the highest of all the EU candidate countries. Compared to the third quarter of 2001, GDP growth in the third quarter of 2002 climbed to 7.4%. The pace of GDP growth for the same period was also high in Lithuania (6.8%) and in Estonia (6.7%). Total third quarter GDP growth for the 12 candidate countries in 2002 was 2.7% compared to the respective period in 2001.

Moody’s Upgrades Lithuania’s Outlook to Positive
Moody’s international financial rating firm raised the outlook on Lithuania’s foreign currency rating “Stable” to “Positive”, ELTA reported (1/14/03). “The administration of public finances continues to improve and is being underpinned by steady reforms in the tax system, municipal finances and health care,” stated Moody’s report. It also notes that Lithuania’s budget deficits have been declining and the enhanced business environment has contributed to stronger than expected growth that is likely to be sustained in the medium term.

Lithuania’s and Estonia’s Economies Certified by U.S. as Free Market Economies
The Baltic Times reports (3/13/03) the U.S. Department of Commerce has certified the Lithuanian and Estonian economies as free-market economies, a status that makes for a more open trade policy towards the country, helps attract foreign investments and assists in trade disputes. In order to gain the status of free market economy, a country has to meet certain criteria such as currency convertibility, openness to foreign investments and laws enhancing market economy. “It shows that the U.S. has confidence in the economy here, and that will make both U.S. and other foreign investors less anxious about investing,” said Lithuania’s State Secretary of the Economy Ministry, Gediminas Miskinas. Latvia received its free market economy status in 2001.

U.S. Thanks Lithuania and Latvia for Supporting Georgia in Fight Against Terrorism
U.S. Secretary of State Colin Powell thanked Lithuania and Latvia for the support they have provided to the U.S. sponsored Georgia Train and Equip Program to fight terrorism (LithMFA/LatMFA 4/2/03). As noted by the Secretary, the program has been instrumental in preserving Georgia’s sovereignty and territorial integrity. The program is “critical to both the global war on terrorism and the preservation of Georgia’s sovereignty,” wrote Secretary Power in his letter to Lithuania’s Minister of Foreign Affairs, Antanas Valionis. The assistance includes political consultations, material and equipment assistance, and military planning and training.

Baltic Countries Ready to Deploy Non-Combat Troops to Post-Saddam Iraq
Estonia, Latvia and Lithuania are ready to send non-combat troops to Iraq to serve as peacekeepers, to conduct mine clearing operations, provide assistance to refugees and medical services, as further proof of their commitment to the U.S. led coalition, reports AP (3/25/03). “This is an important moment for us to prove we are not a small, scared country, but one that can stand up and take part in collective international security,” Latvia’s Prime Minister Einars Repse told Parliament. Opposition lawmakers argued that supporting U.S. action could jeopardize the country’s relations with France and Germany, two of the European Union’s more influential members.

Baltic Accession to NATO “Will Directly Benefit U.S. Interests”
Earlier on the same day that the SFRC considered NATO enlargement, the Senate Armed Services Committee held a hearing on the future of NATO. Included on the Committee’s agenda was enlargement of NATO. In his presentation to the Committee, Under Secretary of State for Political Affairs Marc I. Grossman declared that “The accession of these seven countries to NATO will directly benefit U.S. interests. These are strong Atlanticists. They are Allies in the war on terror. They have contributed to Operation Enduring Freedom and to the International and Stabilization Force in Kabul. During the discussion, Senator Hillary Rodham Clinton (D-NY) stated she believes “that each [candidate country] are qualified to join NATO and that they have important contributions to make.” In response to a question by Senator Wayne Allard (R-CO), Mr. Grossman stated that the Administration is closely monitoring whether any repercussions are taken against our allies for supporting the U.S.

Senate Foreign Relations Committee “Enthusiastic” About Baltic Membership in NATO
The SFRC held the first three of four hearings on the admission of the Baltic countries and four other aspirant states into NATO. The meetings were held on March 27th, April 1st and 3rd. The purpose of the hearings was to examine the readiness of each of the candidate countries to join NATO. Following are excerpts from the statements made by the members of the Committee and the persons testifying before the Committee:
Senator George Allan (VA-R): The Baltic countries and other aspirants have “overcome serious political, economic and military challenges to get where they are today—on the way to joining the most important political military alliance in the world. NATO will benefit from the capabilities they offer and the vitality the bring.”Senator George Voinovich (R-OH): “…it is also true that they bring to the table defense capabilities that will enhance the overall security and stability of the NATO Alliance…Our allies, too, believe that these countries will make significant contributions, military and otherwise, to the Alliance.”Mr. Robert Bradtke, Deputy Asst. for European and Eurasian Affairs: “The evidence clearly shows that all seven invitees have made an enduring commitment to the core values of NATO, and that each is ready, both politically and militarily, to contribute to the defense of the NATO Alliance.”Dr. Ronald Asmus, Senior Transatlantic Fellow at the German Marshall Fund: “They have acted as allies with us in conflicts ranging from Bosnia and Kosovo to the war against terrorism.” Senator Richard Lugar (R-IN): “I am fully confident that these countries have made an enduring commitment to the core values of NATO and that they will stand with those most committed to the Transatlantic relationships…I will urge the Senate to vote in favor of bringing the seven candidate states into NATO…the Committee is enthusiastic about the candidate countries and the enlargement of NATO to include all seven and the contributions they will make to the Alliance.”

Canada First to Ratify Baltic Protocols of Accession to NATO
On March 28, 2003, Canada ratified the protocols of accession to NATO to admit Estonia, Latvia, Lithuania, Bulgaria, Romania, Slovakia and Slovenia into NATO. In expressing Lithuania’s appreciation of Canada’s action, Lithuania’s Prime Minister Antanas Valionis stated “It shows that Canada considers the invitees as reliable future allies.” Latvia’s Minister of Foreign Affairs, Sandra Kalniete, expressed Latvia’s gratitude to Canada for such rapid ratification, coming just one day after the NATO countries signed the Accession Protocols. Eighteen other member states have yet to ratify the protocols. The U.S. Senate Foreign Relations Committee (SFRC) has began to hold hearings on the enlargement.