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Sunday 25.09.2016 | Name days: Rauls, Rodrigo

Week in Lithuania. Vilnius mayor questioned in corruption investigation

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Vilnius Mayor Remigijus Šimašius

The leader of the Lithuanian Liberal Movement, Vilnius Mayor Remigijus Šimašius, has been summoned for questioning by the Special Investigation Service.

Šimašius himself shared the information on Facebook on Friday, September 16. Šimašius is questioned in a political corruption investigation where the Liberal Movement’s former leader, Eligijus Masiulis, is suspected of bribery and influence peddling.

Lithuania to exercise state immunity in dispute against ex-banker

The state of Lithuania mulls exercising jurisdictional immunity Lithuania says it is entitled to under international law in a lawsuit brought against it by Vladimir Antonov, a former majority shareholder of the collapsed Lithuanian bank Snoras and collapsed Latvian bank Krajbanka, which means that it does not agree to the dispute being heard by a Moscow court.

Lithuania will submit this position to a Moscow arbitration court that is hearing Antonov’s lawsuit against the government and to the Russian Justice Ministry, according to the draft minutes of a Cabinet meeting prepared by the Lithuanian Justice Ministry.

Andrius Bambalas of the law office Fort thinks that the Justice Ministry’s decision to exercise sovereign immunity is a right move.

«I believe this is the right decision. There is an international law principle that the courts of one state cannot hear disputes against another state without its consent,» he told Lithuanian media.

According to the lawyer, Antonov basically accuses the Lithuanian state of expropriation of Snoras’ shares.

«Expropriation is not an area of private law. It is an area of public law of a sovereign state. In this case, therefore, there must be either the Lithuanian state’s consent or the dispute has to be resolved in that state (Lithuania), or an international dispute resolution mechanism has to be chosen,» he said.

The Lithuanian Justice Ministry says that Lithuania will invoke state immunity from the jurisdiction of Russian courts, including immunity from interim measures, enforcement of decisions and other actions. It also emphasizes that international rules were not followed while submitting procedural documents.

The Lithuanian government is to instruct the Lithuanian Foreign Ministry to send a diplomatic note to Russia over the Moscow arbitration court’s actions. The Lithuanian Justice Ministry on Aug. 11 was notified of a lawsuit worth 40.1 billion roubles (558 million euro) filed by Antonov against Lithuania. The former banker is seeking 20.2 billion roubles (281 million euro) in material damages and another 19.9 billion roubles (277 million euro) in damages to his business reputation. The Moscow arbitration court is scheduled to start the hearing of the suit on September 22.

China set to assess Lithuania’s export capacities

Lithuanian dairy producers have already entered into the Chinese dairy market and now others industries are exploring the possibilities of Chinese market. «A visit from Chinese experts regarding beef and fodder is planned already for this year. It would be an important step in the negotiations to gain permits for Lithuanian companies to export to China,» the Minister of Agriculture Virginija Baltraitienė, said. Negotiations on veterinary requirements and document coordination with relevant Chinese institutions began in 2015, with the necessary documents and surveys having been provided.

Lithuania rises in Fraser Institute’s economic freedom ranking

Lithuania rose three notches to number fifteen, the highest ranking among the three Baltic countries, in the Fraser Institute’s latest Economic Freedom of the World reports. Lithuania scored 7.81 in the 2016 annual report by the Canadian institute. Last year, it was ranked 18th with a score of 7.62 points. Lithuania this year scored best for credit and labor markets and business regulations, at number 13t in the world. Its lowest score is for the size of government, at 51st position. Estonia is ranked 19th and Latvia is in 27th place in the latest index.  Poland shares 40th position with Japan and Russia is in 102nd place. Hong Kong tops the ranking, followed with Singapore in second place and New Zealand in third. The 2016 report is based on 2014 data for 159 countries and territories.

Government is set to fire chief vet

The Lithuanian government is planning to dismiss Jonas Milius, director of the State Food and Veterinary Service (SFVS), from the job, Prime Minister Algirdas Butkevičius said on Thursday, September 15.  Law-enforcement officials have brought suspicions of abuse of office and document forgery against Milius. They suspect that Judex, a Kaunas-based frozen food company, sought to influence the SVFS via Petras Gražulis, a member of the Seimas, to avoid penalties for violations. Both Butkevičius and President Dalia Grybauskaitė have called on Milius to resign from the post he has held since 2010, but he has refused to do so.

Lithuania calls on Brussels to continue TTIP talks

Lithuania and another 11 European countries have called on the European Commission to make efforts to reach a free trade deal with the United States. The statement by 12 EU ministers can be regarded as a response to calls from the French government and other critics for an end to the negotiations which have been going on for three years. The Baltic, Nordic, British, Irish, Italian, Spanish, Portuguese and Czech ministers described the Transatlantic Trade and Investment Partnership (TTIP) as «an opportunity to shape the rules of trade in the 21st century.»

Key disagreements over N-plant

Stark disagreements persist between Lithuania and Belarus over the Astravyets nuclear power plant under construction just 50 kilometres from Vilnius, the Lithuanian Environment Ministry said after the two countries’ experts ended their two-day meeting in Minsk on Wednesday, September 14.  According to Vitalijus Auglys, head of the Lithuanian delegation, the meeting showed once again that major differences remained between the neighbouring countries on the application of international standards, cross-border environmental impact assessment (EIA) procedures, transparency, openness and the principles of good neighbourliness.

MF expects GDP growth to reach 2.5 per cent in 2016

Lithuania’s economy should grow by some 2.5 per cent this year and expand by around 3 per cent next year, driven by strong wage growth that supports private consumption, experts from the International Monetary Fund said on Tuesday at the conclusion of their visit to Lithuania.

«Economic activity is expanding at a satisfactory pace and is likely to accelerate moderately into next year. Private consumption is the main driver, supported by strong wage growth. Exports are also doing reasonably well considering the weak external environment, as efforts to diversify markets are beginning to bear fruit,» Christoph Klingen, the IMF mission chief for Lithuania, said in a statement.

President takes part in EU summit

Lithuanian President Dalia Grybauskaitė participated in an informal EU summit in Bratislava aimed at mapping out the bloc’s future after Brexit. Leaders of 27 EU member states have reflected on the situation in the European Union after the Brexit vote and focused on the vision for its future. Britain, whose voters in June voted to leave the bloc, will not be present for the first time in its 43-year membership.

«Brexit has revealed long-standing problems in the European Union and in member states. The political elite has distanced itself from ordinary people, does not listen to their problems, does not hear their concerns,» Grybauskaitė said on the eve of the meeting in the Slovakian capital.

Nobel laureate Shiller visits Vilnius

Robert J. Shiller, a Nobel laureate in economics and Yale University professor of Lithuanian descent, visited Lithuania on Friday, September 16. He paid visit to visit the Joint Life Sciences Centre of Vilnius University (VU) and the National Centre for Physical Sciences and Technology, and delivered an open lecture on the risks of the next century and their management at the VU Science Communication and Information Centre. The Lithuanian American economist also presented a new book he co-authored, titled «Phishing for Phools: The Economics of Manipulation and Deception», at ISM University of Management and Economics in Vilnius.

Lithuania raises nearly half billion on global markets

Lithuania has raised this week 450 million euro in a tap of its 20-year 750-million-euro bond placed last year, bringing the total size of the issue, which carries a 2.125 per cent coupon, to 1.2 billion euro.

«The decision was driven by positive sentiment in the financial markets and our aim to fix into the low interest rate. This re-opening of our longest Eurobond increases liquidity of the bond, therefore, price discovery exercise will be more efficient from now on,» Finance Minister Rasa Budbergytė said in a press release.

«Proceeds from the offering will be used for general budgetary purposes as foreseen in the 2016 Borrowing Program approved by the government,» she said.

The Eurobond was issued at a yield of 1.132 per cent and issue price equal to 116.955 per cent of its face value. The settlement will take place on Oct. 22 and the maturity date is Oct. 22, 2035, the ministry said.

The transaction was lead-managed by Goldman Sachs International and J.P. Morgan.

Lithuania is rated A3 by Moody’s and A- by both Standard & Poor’s and Fitch Ratings.

Vilnius, EIB sign 25 million euro loan agreement

The city of Vilnius has signed a 25-million-euro loan agreement with the European Investment Bank (EIB).

This is the first 25-million-euro tranche of a 50-million-euro loan facility. The second tranche is expected to be signed next year. Alma Vaitkunskienė, the municipality’s director of administration, said that some 12 million euro out of the first tranche will be used to refinance the most costly loans (from the Finance Ministry and SEB Bankas). The EIB loan carries an interest rate of 0.38 per cent and the bank’s margin is 0.2 per cent.

Annual inflation above EU average

Lithuania’s EU-harmonized annual inflation rate in August, at 0.5 per cent, was higher than the average rate in the euro area and that in the whole EU, figures from Eurostat showed on Thursday, September 15. Latvia’s annual inflation was negative, at minus 0.1 per cent, while Estonia posted a 1.1 per cent rate. Annual inflation stood at 0.2 per cent in the euro area and at 0.3 per cent in the whole EU. Positive annual inflation last month was recorded in 15 EU member states. Twelve countries registered negative annual rates, and consumer prices in Denmark remained stable.

Statoil, Lithuania agree on LNG trade via Klaipėda LNGT

Norway’s Statoil and two gas trade subsidiaries of Lithuania’s state energy group Lietuvos Energija (Lithuanian Energy) have agreed to cooperate in supplying liquefied natural gas via the Klaipeda LNG terminal to customers in the Baltic Sea. The companies planned to set up a joint venture when they started talks on joint small-scale LNG operations a year and a half ago, but they dropped the idea. Under the agreement signed on Thursday, September 15, Litgas and Lietuvos Dujų Tiekimas (Lithuanian Gas Supply) will take care of the supply of Statoil’s gas from the Klaipėda terminal to customers in the Baltic Sea. The three companies should supply gas to smaller LNG terminals in the Baltic Sea and ships using LNG as a fuel.

Lithuania’s new car sales among EU’s strongest

Lithuania’s new car sales rose at one of the fastest rates in the EU in January through August 2016, figures from the European Automobile Manufacturers’ Association (ACEA) showed on Thursday, September 15. New passenger car registrations in Lithuania jumped by 22.8 per cent in the eight months year-on-year to reach 13,915 units, the third-highest rate after Cyprus’ 33.3 per cent and Hungary’s 24.9 per cent. Latvia posted a 22.2 per cent increase to 11,122 and Estonia registered a 12 per cent growth to 15,509 units. Across the EU, new car registrations increased by 8.1 per cent to 9.788 million units. Volkswagen remained the most popular make in Europe with 1.107 million cars sold during the eight months, down 0.4 per cent, year-on-year.

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