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		<title>Germany&#8217;s trade with the Baltic countries</title>
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		<pubDate>Mon, 29 Jun 2015 19:31:39 +0000</pubDate>
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				<category><![CDATA[Amber Bridge. Journal of Regional Studies]]></category>
		<category><![CDATA[№2 (5) 2015]]></category>
		<category><![CDATA[Crude]]></category>
		<category><![CDATA[Denmark]]></category>
		<category><![CDATA[Energy]]></category>
		<category><![CDATA[Estonia]]></category>
		<category><![CDATA[Finland]]></category>
		<category><![CDATA[Foreign trade]]></category>
		<category><![CDATA[Germany]]></category>
		<category><![CDATA[Latvia]]></category>
		<category><![CDATA[Lithuania]]></category>
		<category><![CDATA[Natural Gas]]></category>
		<category><![CDATA[Oil Products]]></category>
		<category><![CDATA[Poland]]></category>
		<category><![CDATA[Russia]]></category>
		<category><![CDATA[Sweden]]></category>
		<category><![CDATA[Trade Statistics]]></category>

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		<description><![CDATA[Maria Vladimirovna Gracheva — Ph.D. in Economics, leading researcher of Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow.  The article of Maria Gracheva examines the characteristics of Germany’s trade with the countries that along with the FRG are the members of the Council of the Baltic Sea states. The analysis is [&#8230;]]]></description>
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<p><span style="color: #4c4c4c;">Maria Vladimirovna Gracheva </span><span style="color: #4c4c4c;">— Ph.D. in Economics, leading researcher of Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow. </span></p>
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<p><span style="font-style: italic; color: #333333;">The article of Maria Gracheva examines the characteristics of Germany’s trade with the countries that along with the FRG are the members of the Council of the Baltic Sea states. The analysis is based on the statistics of German federal statistical office (Statistisches Bundesamt) in the period of 1992-2014. The author considers such indicators as the share of Baltic states in the German foreign trade turnover, the volumes of Germany’s trade with the particular countries, the trade’s breakdown into the commodity groups. The main Germany’s trade partner countries and the key trade growth/downturn drivers among Baltic countries are identified. Special attention is paid to the peculiarities of the commodity structure of the Germany’s trade with the particular countries, including their comparison with the relevant indicators of the total German foreign trade. The main commodities of the Germany’s export/import to/from Baltic countries by the three-digit classification are analysed as well as the roles of the particular countries as the German buyers and suppliers. Some important facts of the period of 2008-2014 are registered, such as the decline of the oil/gas import from Norway and Russia and the growth of the oil products’ import from Russia. The data of German- Baltic trade’s reduction in the first quarter of 2015 are presented and explained chiefly by the negative dynamics of the Russian import due to the termination of the compensation by means of the oil products. The author comes to the conclusion, that in two-three years already Russia can come down to the Germany’s second-class trade partners, and within the Baltic region the main beneficiaries thereon will be Poland, Sweden and Norway. </span></p>
<p>The Baltic States are important trade partners of Germany: in 2014 their share in the foreign trade turnover of Germany amounted to 13.3%, including 12.2% in exports from Germany and 14.6% in imports into the Federal Republic of Germany (the rest of European countries accounted for 56.0% of the German turnover, including 55.8% of exports and 56.4% of imports)[1].</p>
<p>&nbsp;</p>
<p><strong>Pic. 1. Role of the Baltic States in the foreign trade of Germany</strong></p>
<p><strong> </strong></p>
<p>(Share of import from the Baltic States in the cumulative import to Germany</p>
<p>Share of export to the Baltic States in the cumulative export from Germany)</p>
<p><strong> </strong></p>
<p>In 1992-2008 indicators of the Baltic countries showed a relatively constant growth: from 8.8 to 14.2% of turnover, including a growth from 8.1 to 13.4% of exports from Germany and a growth from 9.6 to 15.0% of imports into Germany (see. Fig. 1), while the share of the rest of European countries declined (turnover &#8211; from 66.1 to 58.5%, exports from Germany &#8211; from 68.9 to 61.1%, and imports into Germany &#8211; from 63.1 to 55.4%). Since 2009, there has been a downward trend in the role of both the Baltic States and other European countries in the foreign trade of Germany (the importance of the countries of Asia &#8211; primarily China, by contrast, has increased). Information on the volumes of German trade with individual countries of the Baltic region is presented in Tables 1 and 2.</p>
<p>&nbsp;</p>
<p><strong>Table 1. Trade between Germany and the Baltic States in 1992-2014.</strong></p>
<table style="height: 635px;" width="673">
<thead>
<tr>
<td rowspan="3" width="86"><strong>Country</strong><strong>/<br />
</strong><strong>group of countries</strong></td>
<td colspan="11" width="424"><strong>1992-2014</strong></td>
</tr>
<tr>
<td colspan="3" width="119"><strong>Turnover, Germany</strong></td>
<td colspan="3" width="113"><strong>Export from Germany </strong></td>
<td colspan="3" width="121"><strong>Import into Germany </strong></td>
<td colspan="2" width="71"><strong>Balance for Germany </strong></td>
</tr>
<tr>
<td width="43"><strong>Bln euro</strong></td>
<td width="36"><strong>%</strong></td>
<td width="40"><strong>position </strong></td>
<td width="39"><strong>Bln euro</strong></td>
<td width="36"><strong>%</strong></td>
<td width="39"><strong>position </strong></td>
<td width="40"><strong>Bln euro</strong></td>
<td width="36"><strong>%</strong></td>
<td width="44"><strong>position </strong></td>
<td width="35"><strong>Bln euro</strong></td>
<td width="36"><strong>%</strong></td>
</tr>
</thead>
<tbody>
<tr>
<td width="86"><strong>Poland</strong></td>
<td width="43">919,9</td>
<td width="36">3,07</td>
<td width="40">1</td>
<td width="39">518,2</td>
<td width="36">3,18</td>
<td width="39">1</td>
<td width="40">401,7</td>
<td width="36">2,95</td>
<td width="44">2</td>
<td width="35">116,5</td>
<td rowspan="10" width="36"></td>
</tr>
<tr>
<td width="86"><strong>Russia </strong></td>
<td width="43">855,2</td>
<td width="36">2,86</td>
<td width="40">2</td>
<td width="39">387,8</td>
<td width="36">2,38</td>
<td width="39">2</td>
<td width="40">467,4</td>
<td width="36">3,43</td>
<td width="44">1</td>
<td width="35">-79,6</td>
</tr>
<tr>
<td width="86"><strong>Sweden </strong></td>
<td width="43">580,3</td>
<td width="36">1,94</td>
<td width="40">3</td>
<td width="39">342,2</td>
<td width="36">2,10</td>
<td width="39">3</td>
<td width="40">238,1</td>
<td width="36">1,75</td>
<td width="44">4</td>
<td width="35">104,1</td>
</tr>
<tr>
<td width="86"><strong>Denmark </strong></td>
<td width="43">472,7</td>
<td width="36">1,58</td>
<td width="40">4</td>
<td width="39">260,7</td>
<td width="36">1,60</td>
<td width="39">4</td>
<td width="40">212,0</td>
<td width="36">1,56</td>
<td width="44">5</td>
<td width="35">48,7</td>
</tr>
<tr>
<td width="86"><strong>Norway </strong></td>
<td width="43">431,0</td>
<td width="36">1,44</td>
<td width="40">5</td>
<td width="39">125,1</td>
<td width="36">0,77</td>
<td width="39">6</td>
<td width="40">305,9</td>
<td width="36">2,25</td>
<td width="44">3</td>
<td width="35">-180,9</td>
</tr>
<tr>
<td width="86"><strong>Finland </strong></td>
<td width="43">280,7</td>
<td width="36">0,94</td>
<td width="40">6</td>
<td width="39">150,1</td>
<td width="36">0,92</td>
<td width="39">5</td>
<td width="40">130,6</td>
<td width="36">0,96</td>
<td width="44">6</td>
<td width="35">19,5</td>
</tr>
<tr>
<td width="86"><strong>Lithuania </strong></td>
<td width="43">51,9</td>
<td width="36">0,17</td>
<td width="40">7</td>
<td width="39">32,3</td>
<td width="36">0,20</td>
<td width="39">7</td>
<td width="40">19,6</td>
<td width="36">0,14</td>
<td width="44">7</td>
<td width="35">12,6</td>
</tr>
<tr>
<td width="86"><strong>Latvia</strong></td>
<td width="43">29,2</td>
<td width="36">0,10</td>
<td width="40">8</td>
<td width="39">19,6</td>
<td width="36">0,12</td>
<td width="39">8</td>
<td width="40">9,6</td>
<td width="36">0,07</td>
<td width="44">8</td>
<td width="35">10,0</td>
</tr>
<tr>
<td width="86"><strong>Estonia </strong></td>
<td width="43">26,2</td>
<td width="36">0,09</td>
<td width="40">9</td>
<td width="39">18,8</td>
<td width="36">0,12</td>
<td width="39">9</td>
<td width="40">7,4</td>
<td width="36">0,05</td>
<td width="44">10</td>
<td width="35">11,4</td>
</tr>
<tr>
<td width="86"><strong>Iceland</strong></td>
<td width="43">16,0</td>
<td width="36">0,05</td>
<td width="40">10</td>
<td width="39">6,7</td>
<td width="36">0,04</td>
<td width="39">10</td>
<td width="40">9,3</td>
<td width="36">0,07</td>
<td width="44">9</td>
<td width="35">-2,6</td>
</tr>
<tr>
<td width="86"><strong>Total Baltic States </strong></td>
<td width="43">3.663,1</td>
<td width="36">12,24</td>
<td width="40"></td>
<td width="39">1.861,4</td>
<td width="36">11,41</td>
<td width="39"></td>
<td width="40">1.801,7</td>
<td width="36">13,23</td>
<td width="44"></td>
<td width="35">59,7</td>
<td width="36">2,22</td>
</tr>
<tr>
<td width="86"><strong> </strong></td>
<td width="43"></td>
<td width="36"></td>
<td width="40"></td>
<td width="39"></td>
<td width="36"></td>
<td width="39"></td>
<td width="40"></td>
<td width="36"></td>
<td width="44"></td>
<td width="35"></td>
<td width="36"></td>
</tr>
<tr>
<td width="86"><strong>Whole world </strong></td>
<td width="43">29.926,6</td>
<td width="36">100,00</td>
<td width="40"></td>
<td width="39">16.307,5</td>
<td width="36">100,00</td>
<td width="39"></td>
<td width="40">13.619,1</td>
<td width="36">100,00</td>
<td width="44"></td>
<td width="35">2.688,4</td>
<td width="36">100,00</td>
</tr>
</tbody>
</table>
<p>Note: The Baltic States are presented in descending order of their turnover with Germany in 1992-2014.</p>
<p>&nbsp;</p>
<p><strong>Table</strong><strong> 2. </strong><strong>Main partner countries of Germany in its trade with the Baltic States in 1992 and in 2014. </strong></p>
<table width="510">
<thead>
<tr>
<td rowspan="2" width="56"><strong>Indicator </strong></td>
<td rowspan="2" width="141"><strong>Country </strong></td>
<td colspan="2" width="58"><strong>1992</strong></td>
<td rowspan="2" width="55"><strong>Indicator </strong></td>
<td rowspan="2" width="141"><strong>Country </strong></td>
<td colspan="2" width="60"><strong>2014</strong></td>
</tr>
<tr>
<td width="28"><strong>Bln euro</strong></td>
<td width="30"><strong>%</strong></td>
<td width="31"><strong>Bln euro</strong></td>
<td width="28"><strong>%</strong></td>
</tr>
</thead>
<tbody>
<tr>
<td rowspan="6" width="56"><strong>Turnover </strong><strong><br />
</strong><strong>Germany – Baltic States </strong></td>
<td width="141"><strong>Sweden</strong></td>
<td width="28">14,7</td>
<td width="30">24,9</td>
<td rowspan="6" width="55"><strong>Turnover </strong><strong><br />
</strong><strong>Germany – Baltic States</strong></td>
<td rowspan="2" width="141"><strong>Poland</strong></td>
<td rowspan="2" width="31">87,5</td>
<td rowspan="2" width="28">32,1</td>
</tr>
<tr>
<td rowspan="2" width="141"><strong>Denmark</strong></td>
<td rowspan="2" width="28">14,0</td>
<td rowspan="2" width="30">23,7</td>
</tr>
<tr>
<td rowspan="2" width="141"><strong>Russia</strong></td>
<td rowspan="2" width="31">67,7</td>
<td rowspan="2" width="28">24,8</td>
</tr>
<tr>
<td width="141"><strong>Poland</strong></td>
<td width="28">8,4</td>
<td width="30">14,3</td>
</tr>
<tr>
<td width="141"><strong>3 main countries, total</strong></td>
<td width="28">37,1</td>
<td width="30">62,9</td>
<td width="141"><strong>2 main countries, total </strong></td>
<td width="31">155,0</td>
<td width="28">56,9</td>
</tr>
<tr>
<td width="141"><strong>Turnover Germany – Baltic States, total</strong></td>
<td width="28">59,0</td>
<td width="30">100,0</td>
<td width="141"><strong>Turnover Germany – Baltic States, total</strong></td>
<td width="31">272,8</td>
<td width="28">100,0</td>
</tr>
<tr>
<td rowspan="4" width="56"><strong>Export<br />
from Germany to the Baltic States </strong></td>
<td width="141"><strong>Sweden</strong></td>
<td width="28">7,5</td>
<td width="30">26,9</td>
<td rowspan="4" width="55"><strong>Export<br />
from Germany to the Baltic States</strong></td>
<td width="141"><strong>Poland</strong></td>
<td width="31">47,7</td>
<td width="28">34,4</td>
</tr>
<tr>
<td width="141"><strong>Denmark</strong></td>
<td width="28">6,6</td>
<td width="30">23,8</td>
<td width="141"><strong>Russia</strong></td>
<td width="31">29,3</td>
<td width="28">21,1</td>
</tr>
<tr>
<td width="141"><strong>2 main countries, total </strong></td>
<td width="28">14,1</td>
<td width="30">50,8</td>
<td width="141"><strong>2 main countries, total</strong></td>
<td width="31">77,1</td>
<td width="28">55,5</td>
</tr>
<tr>
<td width="141"><strong>Export from Germany to the Baltic States, total</strong></td>
<td width="28">27,8</td>
<td width="30">100,0</td>
<td width="141"><strong>Export from Germany to the Baltic States, total</strong></td>
<td width="31">138,9</td>
<td width="28">100,0</td>
</tr>
<tr>
<td rowspan="6" width="56"><strong>Import<br />
from the Baltic States to Germany </strong></td>
<td width="141"><strong>Denmark </strong></td>
<td width="28">7,3</td>
<td width="30">23,5</td>
<td rowspan="6" width="55"><strong>Import<br />
from the Baltic States to Germany</strong></td>
<td rowspan="2" width="141"><strong>Poland</strong></td>
<td rowspan="2" width="31">39,8</td>
<td rowspan="2" width="28">29,7</td>
</tr>
<tr>
<td rowspan="2" width="141"><strong>Sweden</strong></td>
<td rowspan="2" width="28">7,2</td>
<td rowspan="2" width="30">23,1</td>
</tr>
<tr>
<td rowspan="2" width="141"><strong>Russia</strong></td>
<td rowspan="2" width="31">38,4</td>
<td rowspan="2" width="28">28,7</td>
</tr>
<tr>
<td width="141"><strong>Norway</strong></td>
<td width="28">4,7</td>
<td width="30">14,9</td>
</tr>
<tr>
<td width="141"><strong>3 main countries, total</strong></td>
<td width="28">19,2</td>
<td width="30">61,6</td>
<td width="141"><strong>2 main countries, total </strong></td>
<td width="31">78,2</td>
<td width="28">58,4</td>
</tr>
<tr>
<td width="141"><strong>Import from the Baltic States to Germany, total </strong></td>
<td width="28">31,2</td>
<td width="30">100,0</td>
<td width="141"><strong>Import from the Baltic States to Germany, total</strong></td>
<td width="31">133,8</td>
<td width="28">100,0</td>
</tr>
<tr>
<td rowspan="4" width="56"><strong>Balance for Germany – cumulative surplus </strong></td>
<td rowspan="2" width="141"><strong>Sweden</strong></td>
<td rowspan="2" width="28">0,3</td>
<td rowspan="2" width="30">90,0</td>
<td rowspan="4" width="55"><strong>Balance for Germany – cumulative surplus</strong></td>
<td width="141"><strong>Poland</strong></td>
<td width="31">8,0</td>
<td width="28">32,0</td>
</tr>
<tr>
<td width="141"><strong>Sweden</strong></td>
<td width="31">7,4</td>
<td width="28">29,6</td>
</tr>
<tr>
<td width="141"><strong>1 main country, total </strong></td>
<td width="28">0,3</td>
<td width="30">90,0</td>
<td width="141"><strong>2 main countries, total</strong></td>
<td width="31">15,4</td>
<td width="28">61,7</td>
</tr>
<tr>
<td width="141"><strong>Cumulative surplus for Germany, total </strong></td>
<td width="28">0,3</td>
<td width="30">100,0</td>
<td width="141"><strong>Cumulative surplus for Germany, total</strong></td>
<td width="31">25,0</td>
<td width="28">100,0</td>
</tr>
<tr>
<td rowspan="4" width="56"><strong>Balance for Germany – combined deficit </strong></td>
<td width="141"><strong>Norway</strong></td>
<td width="28">-1,8</td>
<td width="30">47,6</td>
<td rowspan="4" width="55"><strong>Balance for Germany – combined deficit</strong></td>
<td rowspan="2" width="141"><strong>Norway</strong></td>
<td rowspan="2" width="31">-10,7</td>
<td rowspan="2" width="28">53,7</td>
</tr>
<tr>
<td width="141"><strong>Denmark</strong></td>
<td width="28">-0,7</td>
<td width="30">19,2</td>
</tr>
<tr>
<td width="141"><strong>2 main countries, total </strong></td>
<td width="28">-2,5</td>
<td width="30">66,8</td>
<td width="141"><strong>One main country, total </strong></td>
<td width="31">-10,7</td>
<td width="28">53,7</td>
</tr>
<tr>
<td width="141"><strong>Combined deficit for Germany, total </strong></td>
<td width="28">-3,7</td>
<td width="30">100,0</td>
<td width="141"><strong>Combined deficit for Germany, total </strong></td>
<td width="31">-20,0</td>
<td width="28">100,0</td>
</tr>
</tbody>
</table>
<p>Note. The main partners are listed as countries in descending order with the largest volume of trade, export, import and balance, which together accounted for more than 50% of the respective indicators in 1992 and 2014.</p>
<p>&nbsp;</p>
<p>Within the whole period of 1992-2014, Germany&#8217;s main partners among the ten Baltic States were the following four countries &#8211; <strong>Poland, Russia, Sweden and Norway</strong>, including:</p>
<p>- Poland, Russia, Sweden &#8211; in turnover and exports from Germany,</p>
<p>- Russia, Poland, Norway &#8211; in imports to Germany,</p>
<p>- Poland and Sweden &#8211; in surplus for Germany,</p>
<p>- Norway – in deficit for Germany.</p>
<p>&nbsp;</p>
<p>For more than twenty years there have occurred major shifts: in 1992, the most important contractors were Sweden, Denmark, Norway and Poland; now Denmark is not among them, and Sweden and Norway have been overshadowed by Poland and Russia.</p>
<p>In 1992-2014 Germany formed a surplus in trade with the Baltic countries totaling 60 billion euros, but its share in the German foreign trade surplus as a whole (2.7 trillion euros) was only 2.2% &#8211; much lower than the corresponding figures of turnover (12.2 %), exports from Germany (11.4%) and imports to Germany (13.2%). This situation is due to the sustained deficit in German trade with Norway and Russia (these countries are on the second and third places after the Netherlands in terms of the German trade deficit). In 1992-2003 the German-Baltic trade balance was variable with a predominance of the negative balance for Germany. Since 2004 it has become steadily positive for Germany (mainly due to a rapid increase of surplus in the trade with Poland).</p>
<p>Key countries to determine the dynamics of the German trade with the Baltic States are shown in Tables 4 and 5. The most powerful driving forces in general over the last 22 years were Poland and Russia (they were the main factors of growth both in exports from Germany, as well as in imports into Germany, and in 1992-2014 provided respectively 37 and 28% of growth of the German-Baltic turnover). Sweden and Norway took the second place (with growth of 10% and 9%).</p>
<p>&nbsp;</p>
<p><strong>Table 4. Key forces – countries of the German – Baltic trade in 1992-2014, 1992-2000 and in 2000-2008.</strong></p>
<table width="510">
<tbody>
<tr>
<td rowspan="4" width="64"><strong>Country/group of countries </strong></td>
<td colspan="4" width="140"><strong>Total change </strong><strong>2014/1992</strong></td>
<td colspan="4" width="150"><strong>Change </strong><strong>2000/1992</strong></td>
<td colspan="4" width="156"><strong>Change </strong><strong>2008/2000</strong></td>
</tr>
<tr>
<td colspan="2" width="66"><strong>Export from Germany </strong></td>
<td colspan="2" width="74"><strong>Import into Germany </strong></td>
<td colspan="2" width="74"><strong>Export from Germany </strong></td>
<td colspan="2" width="77"><strong>Import into Germany </strong></td>
<td colspan="2" width="78"><strong>Export from Germany </strong></td>
<td colspan="2" width="79"><strong>Import into Germany </strong></td>
</tr>
<tr>
<td width="27"><strong>Growth</strong></td>
<td width="39"><strong>Growth share </strong></td>
<td width="35"><strong>Growth </strong></td>
<td width="39"><strong>Growth share </strong></td>
<td width="34"><strong>Growth </strong></td>
<td width="40"><strong>Growth share </strong></td>
<td width="34"><strong>Growth </strong></td>
<td width="42"><strong>Growth share </strong></td>
<td width="33"><strong>Growth</strong></td>
<td width="44"><strong>Growth share </strong></td>
<td width="33"><strong>Growth </strong></td>
<td width="45"><strong>Growth share</strong></td>
</tr>
<tr>
<td width="27"><strong>Bln euro</strong></td>
<td width="39"><strong>%</strong></td>
<td width="35"><strong>Bln euro </strong></td>
<td width="39"><strong>%</strong></td>
<td width="34"><strong>Bln euro</strong></td>
<td width="40"><strong>%</strong></td>
<td width="34"><strong>Bln euro</strong></td>
<td width="42"><strong>%</strong></td>
<td width="33"><strong>Bln euro</strong></td>
<td width="44"><strong>%</strong></td>
<td width="33"><strong>Bln euro</strong></td>
<td width="45"><strong>%</strong></td>
</tr>
<tr>
<td width="64"><strong>Poland</strong></td>
<td width="27">+43,5</td>
<td width="39">+39,2</td>
<td width="35">+35,5</td>
<td width="39">+34,6</td>
<td width="34">+10,3</td>
<td width="40">+34,3</td>
<td width="34">+7,7</td>
<td width="42">+23,5</td>
<td width="33">+26,2</td>
<td width="44">+35,3</td>
<td width="33">+13,9</td>
<td width="45">+24,3</td>
</tr>
<tr>
<td width="64"><strong>Russia</strong></td>
<td width="27">+26,1</td>
<td width="39">+23,5</td>
<td width="35">+34,5</td>
<td width="39">+33,6</td>
<td width="34"></td>
<td width="40"></td>
<td width="34">+10,8</td>
<td width="42">+33,1</td>
<td width="33">+25,7</td>
<td width="44">+34,5</td>
<td width="33">+22,4</td>
<td width="45">+39,1</td>
</tr>
<tr>
<td width="64"><strong>Sweden</strong></td>
<td width="27"></td>
<td width="39"></td>
<td width="35"></td>
<td width="39"></td>
<td width="34">+6,0</td>
<td width="40">+20,1</td>
<td width="34"></td>
<td width="42"></td>
<td width="33"></td>
<td width="44"></td>
<td width="33"></td>
<td width="45"></td>
</tr>
<tr>
<td width="64"><strong>Growth in the Baltic countries </strong></td>
<td width="27">+111,1</td>
<td width="39">+100,0</td>
<td width="35">+102,7</td>
<td width="39">+100,0</td>
<td width="34">+30,1</td>
<td width="40">+100,0</td>
<td width="34">+32,7</td>
<td width="42">+100,0</td>
<td width="33">+74,3</td>
<td width="44">+100,0</td>
<td width="33">+57,3</td>
<td width="45">100,0</td>
</tr>
</tbody>
</table>
<p>&nbsp;</p>
<p><strong>Table 5. Key forces – countries of the German – Baltic trade in 2008-2014 and 2012-2014.</strong></p>
<table width="510">
<tbody>
<tr>
<td rowspan="4" width="43"><strong>Country/group of countries </strong></td>
<td colspan="8" width="241"><strong>Change </strong><strong>2014/2008</strong></td>
<td colspan="8" width="227"><strong>Change </strong><strong>2014/2012</strong></td>
</tr>
<tr>
<td colspan="4" width="127"><strong>Export from Germany </strong></td>
<td colspan="4" width="114"><strong>Import into Germany </strong></td>
<td colspan="4" width="114"><strong>Export from Germany </strong></td>
<td colspan="4" width="114"><strong>Import into Germany </strong></td>
</tr>
<tr>
<td width="35"><strong>Growth</strong></td>
<td width="35"><strong>Decline</strong></td>
<td width="28"><strong>Growth share </strong></td>
<td width="28"><strong>Decline share </strong></td>
<td width="29"><strong>Growth </strong></td>
<td width="28"><strong>Decline </strong></td>
<td width="28"><strong>Growth share </strong></td>
<td width="28"><strong>Decline share </strong></td>
<td width="23"><strong>Growth </strong></td>
<td width="28"><strong>Decline </strong></td>
<td width="29"><strong>Growth share </strong></td>
<td width="34"><strong>Decline share </strong></td>
<td width="23"><strong>Growth </strong></td>
<td width="27"><strong>Decline </strong></td>
<td width="30"><strong>Growth share </strong></td>
<td width="34"><strong>Decline share </strong></td>
</tr>
<tr>
<td colspan="2" width="71"><strong>Bln euro</strong></td>
<td colspan="2" width="56"><strong>%</strong></td>
<td colspan="2" width="57"><strong>Bln euro </strong></td>
<td colspan="2" width="56"><strong>%</strong></td>
<td colspan="2" width="50"><strong>Bln euro</strong></td>
<td colspan="2" width="64"><strong>%</strong></td>
<td colspan="2" width="50"><strong>Bln euro</strong></td>
<td colspan="2" width="64"><strong>%</strong></td>
</tr>
<tr>
<td width="43"><strong>Poland</strong></td>
<td width="35">+7,0</td>
<td width="35"></td>
<td width="28">+65,4</td>
<td width="28"></td>
<td width="29">+13,9</td>
<td width="28"></td>
<td width="28">+85,2</td>
<td width="28"></td>
<td width="23">+5,9</td>
<td width="28"></td>
<td width="29">+62,1</td>
<td width="34"></td>
<td width="23">+6,7</td>
<td width="27"></td>
<td width="30">+77,7</td>
<td width="34"></td>
</tr>
<tr>
<td width="43"><strong>Russia</strong></td>
<td width="35"></td>
<td width="35">-3,0</td>
<td width="28"></td>
<td width="28">-76,4</td>
<td width="29"></td>
<td width="28"></td>
<td width="28"></td>
<td width="28"></td>
<td width="23"></td>
<td width="28">-8,8</td>
<td width="29"></td>
<td width="34">-99,5</td>
<td width="23"></td>
<td width="27"></td>
<td width="30"></td>
<td width="34"></td>
</tr>
<tr>
<td width="43"><strong>Norway</strong></td>
<td width="35"></td>
<td width="35"></td>
<td width="28"></td>
<td width="28"></td>
<td width="29"></td>
<td width="28">-3,1</td>
<td width="28"></td>
<td width="28">-82,0</td>
<td width="23"></td>
<td width="28"></td>
<td width="29"></td>
<td width="34"></td>
<td width="23"></td>
<td width="27">-7,0</td>
<td width="30"></td>
<td width="34">-59,7</td>
</tr>
<tr>
<td width="43"><strong>Growth in the Baltic States </strong></td>
<td width="35">+10,7</td>
<td width="35"></td>
<td width="28">+100,0</td>
<td width="28"></td>
<td width="29">+16,3</td>
<td width="28"></td>
<td width="28">+100,0</td>
<td width="28"></td>
<td width="23">+9,5</td>
<td width="28"></td>
<td width="29">+100,0</td>
<td width="34"></td>
<td width="23">+8,7</td>
<td width="27"></td>
<td width="30">+100,0</td>
<td width="34"></td>
</tr>
<tr>
<td width="43"><strong>Decline in the Baltic States </strong></td>
<td width="35"></td>
<td width="35">-3,9</td>
<td width="28"></td>
<td width="28">-100,0</td>
<td width="29"></td>
<td width="28">-3,8</td>
<td width="28"></td>
<td width="28">-100,0</td>
<td width="23"></td>
<td width="28">-8,8</td>
<td width="29"></td>
<td width="34">-100,0</td>
<td width="23"></td>
<td width="27">-11,8</td>
<td width="30"></td>
<td width="34">-100,0</td>
</tr>
</tbody>
</table>
<p>Note. The main factors are countries listed in descending order with the largest increase/reduction of export/import, which total share in the growth/decline of the corresponding indicators was more than 50%.</p>
<p>&nbsp;</p>
<p>In certain periods the following countries were the main trade partners:</p>
<p>- In 1992-2000: for exports from Germany &#8211; Poland and Sweden (growth factors), for imports into Germany &#8211; Russia and Poland (growth factors);</p>
<p>- In 2000-2008: for exports from Germany &#8211; Poland and Russia (growth factors), for imports into Germany &#8211; Russia and Poland (growth factors);</p>
<p>- In 2008-2014 years in general and in 2012-2014 in particular: for exports from Germany &#8211; Poland (growth factor) and Russia (recession factor), for imports into Germany &#8211; Poland (growth factor), and Norway (recession factor).</p>
<p>Poland would return as a source of positive pulses after each case of decrease of the indicators of its trade with Germany in 1992-2014. Russia, too, managed to do this for 20 years, but in the last two years it has dramatically changed its role, becoming the brake of the German-Baltic trade instead of its accelerator. The share of Poland in the foreign trade turnover of Germany rose from 1.3% in 1992 to 4.3% in 2014, the corresponding indicator for Russia rose from 1.1 to 3.3% (maximum &#8211; 4.0% &#8211; was achieved in 2012).</p>
<p>As for the remaining six of the Baltic countries, among them are two larger counterparts of Germany &#8211; Denmark and Finland, and four smaller &#8211; three post-Soviet states (Lithuania, Latvia, Estonia) and Iceland. Both in 1992-2000 and in 2000-2008, all six countries were factors of growth for the trade between Germany and the Baltic States (being inferior to a group of four countries mentioned above). But in 2008-2014 only the new European trio played a positive role, while the “old Europeans” generated negative pulses (Finland and Iceland &#8211; in both directions of trade, Denmark &#8211; for imports to Germany). As a result, the total share of Lithuania, Latvia and Estonia in the foreign trade turnover of Germany rose from 0.1% in 1992 to 0.4% in 2014, thus indicating that the growth rate of Germany&#8217;s trade with these countries turned out to be the highest within the Baltic region.</p>
<p>Distribution of the indicators of the German trade with the Baltic countries and the whole world for four product groups, that are classified in accordance with the increase in the degree of processing of the goods (and, consequently, increase of the share of value added in the value of goods), is presented in Tables 6 and 7.</p>
<p>&nbsp;</p>
<p><strong>Table</strong><strong> 6. </strong><strong>Structure of the goods of the German – Baltic trade in 2014, % of turnover between Germany and the Baltic States </strong></p>
<table width="510">
<tbody>
<tr>
<td colspan="3" width="99"><strong>Indicator/goods group (code, name) </strong></td>
<td width="35"><strong>Poland</strong></td>
<td width="28"><strong>Russia</strong></td>
<td width="35"><strong>Sweden</strong></td>
<td width="36"><strong>Norway</strong></td>
<td width="31"><strong>Denmark </strong></td>
<td width="46"><strong>Finland</strong></td>
<td width="43"><strong>Lithuania</strong></td>
<td width="35"><strong>Estonia</strong></td>
<td width="35"><strong>Latvia</strong></td>
<td width="35"><strong>Iceland</strong></td>
<td width="49"><strong>Turnover Germany – Baltic States, total </strong></td>
</tr>
<tr>
<td rowspan="4" width="42"><strong>Export from Germany </strong></td>
<td width="14"><strong>1-4</strong></td>
<td width="43"><strong>Food</strong></td>
<td width="35">1,5</td>
<td width="28">0,4</td>
<td width="35">0,5</td>
<td width="36">0,2</td>
<td width="31">1,0</td>
<td width="46">0,3</td>
<td width="43">0,1</td>
<td width="35">0,0</td>
<td width="35">0,1</td>
<td width="35">0,0</td>
<td width="49">4,2</td>
</tr>
<tr>
<td width="14"><strong>5</strong></td>
<td width="43"><strong>Raw materials</strong></td>
<td width="35">0,2</td>
<td width="28">0,0</td>
<td width="35">0,1</td>
<td width="36">0,0</td>
<td width="31">0,3</td>
<td width="46">0,0</td>
<td width="43">0,0</td>
<td width="35">0,0</td>
<td width="35">0,0</td>
<td width="35">0,0</td>
<td width="49">0,6</td>
</tr>
<tr>
<td width="14"><strong>6</strong></td>
<td width="43"><strong>Semi-processed goods</strong></td>
<td width="35">1,6</td>
<td width="28">0,2</td>
<td width="35">0,3</td>
<td width="36">0,1</td>
<td width="31">0,3</td>
<td width="46">0,2</td>
<td width="43">0,0</td>
<td width="35">0,1</td>
<td width="35">0,0</td>
<td width="35">0,0</td>
<td width="49">2,8</td>
</tr>
<tr>
<td width="14"><strong>7-8</strong></td>
<td width="43"><strong>Finished products</strong></td>
<td width="35">14,1</td>
<td width="28">10,4</td>
<td width="35">7,0</td>
<td width="36">2,9</td>
<td width="31">4,5</td>
<td width="46">2,8</td>
<td width="43">0,8</td>
<td width="35">0,5</td>
<td width="35">0,5</td>
<td width="35">0,1</td>
<td width="49">43,6</td>
</tr>
<tr>
<td rowspan="4" width="42"><strong>Import into Germany </strong></td>
<td width="14"><strong>1-4</strong></td>
<td width="43"><strong>Food</strong></td>
<td width="35">1,7</td>
<td width="28">0,1</td>
<td width="35">0,1</td>
<td width="36">0,2</td>
<td width="31">1,2</td>
<td width="46">0,0</td>
<td width="43">0,1</td>
<td width="35">0,0</td>
<td width="35">0,0</td>
<td width="35">0,0</td>
<td width="49">3,5</td>
</tr>
<tr>
<td width="14"><strong>5</strong></td>
<td width="43"><strong>Raw materials</strong></td>
<td width="35">0,3</td>
<td width="28">10,2</td>
<td width="35">0,3</td>
<td width="36">6,1</td>
<td width="31">0,3</td>
<td width="46">0,0</td>
<td width="43">0,0</td>
<td width="35">0,0</td>
<td width="35">0,0</td>
<td width="35">0,0</td>
<td width="49">17,3</td>
</tr>
<tr>
<td width="14"><strong>6</strong></td>
<td width="43"><strong>Semi-processed goods</strong></td>
<td width="35">1,2</td>
<td width="28">3,7</td>
<td width="35">0,8</td>
<td width="36">0,6</td>
<td width="31">0,2</td>
<td width="46">0,6</td>
<td width="43">0,1</td>
<td width="35">0,0</td>
<td width="35">0,0</td>
<td width="35">0,1</td>
<td width="49">7,3</td>
</tr>
<tr>
<td width="14"><strong>7-8</strong></td>
<td width="43"><strong>Finished products</strong></td>
<td width="35">10,8</td>
<td width="28">0,7</td>
<td width="35">3,8</td>
<td width="36">0,4</td>
<td width="31">2,3</td>
<td width="46">2,0</td>
<td width="43">0,3</td>
<td width="35">0,1</td>
<td width="35">0,1</td>
<td width="35">0,0</td>
<td width="49">20,7</td>
</tr>
<tr>
<td colspan="3" width="99"><strong>Turnover Germany – Baltic States, total*</strong></td>
<td width="35">31,4</td>
<td width="28">25,7</td>
<td width="35">12,9</td>
<td width="36">10,5</td>
<td width="31">10,2</td>
<td width="46">5,9</td>
<td width="43">1,5</td>
<td width="35">0,8</td>
<td width="35">0,8</td>
<td width="35">0,3</td>
<td width="49">100,0</td>
</tr>
</tbody>
</table>
<p>* excluding returned, replaced and not allocated by commodity groups goods.</p>
<p>Note. The Baltic countries are presented in descending order of their turnover with Germany in 2014.</p>
<p>&nbsp;</p>
<p><strong>Table</strong><strong>  7. </strong><strong>Structure of the goods of the German &#8211; Baltic trade and the overall German foreign trade in 2014, % of export/import/turnover of certain countries, Baltic States and the whole world. </strong></p>
<table width="510">
<thead>
<tr>
<td colspan="3" width="88"><strong>Indicator/goods group (code, name)</strong></td>
<td width="36"><strong>Poland</strong></td>
<td width="31"><strong>Russia</strong></td>
<td colspan="2" width="37"><strong>Sweden</strong></td>
<td colspan="2" width="43"><strong>Norway</strong></td>
<td colspan="3" width="31"><strong>Denmark</strong></td>
<td colspan="3" width="39"><strong>Finland</strong></td>
<td width="31"><strong>Lithuania </strong></td>
<td width="41"><strong>Estonia</strong></td>
<td width="36"><strong>Latvia</strong></td>
<td width="36"><strong>Iceland</strong></td>
<td width="35"><strong>Baltic States, total </strong></td>
<td colspan="2" width="26"><strong>Whole world</strong></td>
</tr>
</thead>
<tbody>
<tr>
<td rowspan="5" width="14"><strong>Export from Germany </strong></td>
<td width="21"><strong>1-4</strong></td>
<td width="53"><strong>Food</strong></td>
<td width="36">8,4</td>
<td width="31">4,0</td>
<td colspan="2" width="37">6,8</td>
<td colspan="2" width="43">7,4</td>
<td colspan="2" width="31">16,4</td>
<td colspan="3" width="39">8,4</td>
<td colspan="2" width="32">11,6</td>
<td width="41">7,7</td>
<td width="36">10,2</td>
<td width="36">12,1</td>
<td width="35">8,2</td>
<td colspan="2" width="26">6,0</td>
</tr>
<tr>
<td width="21"><strong>5</strong></td>
<td width="53"><strong>Raw materials </strong></td>
<td width="36">1,2</td>
<td width="31">0,3</td>
<td colspan="2" width="37">0,9</td>
<td colspan="2" width="43">0,4</td>
<td colspan="2" width="31">4,4</td>
<td colspan="3" width="39">0,4</td>
<td colspan="2" width="32">0,4</td>
<td width="41">0,5</td>
<td width="36">0,9</td>
<td width="36">0,2</td>
<td width="35">1,2</td>
<td colspan="2" width="26">1,6</td>
</tr>
<tr>
<td width="21"><strong>6</strong></td>
<td width="53"><strong>Semi-processed goods </strong></td>
<td width="36">9,0</td>
<td width="31">1,7</td>
<td colspan="2" width="37">4,4</td>
<td colspan="2" width="43">3,2</td>
<td colspan="2" width="31">5,1</td>
<td colspan="3" width="39">6,1</td>
<td colspan="2" width="32">3,5</td>
<td width="41">10,1</td>
<td width="36">4,3</td>
<td width="36">2,3</td>
<td width="35">5,5</td>
<td colspan="2" width="26">5,6</td>
</tr>
<tr>
<td width="21"><strong>7-8</strong></td>
<td width="53"><strong>Finished products </strong></td>
<td width="36">81,4</td>
<td width="31">94,0</td>
<td colspan="2" width="37">88,0</td>
<td colspan="2" width="43">89,1</td>
<td colspan="2" width="31">74,1</td>
<td colspan="3" width="39">85,1</td>
<td colspan="2" width="32">84,5</td>
<td width="41">81,7</td>
<td width="36">84,6</td>
<td width="36">85,4</td>
<td width="35">85,1</td>
<td colspan="2" width="26">86,9</td>
</tr>
<tr>
<td colspan="2" width="74"><strong>Export from Germany, total </strong></td>
<td width="36">100,0</td>
<td width="31">100,0</td>
<td width="36">100,0</td>
<td colspan="2" width="43">100,0</td>
<td colspan="3" width="31">100,0</td>
<td colspan="3" width="39">100,0</td>
<td colspan="2" width="32">100,0</td>
<td width="41">100,0</td>
<td width="36">100,0</td>
<td width="36">100,0</td>
<td width="35">100,0</td>
<td colspan="2" width="26">100,0</td>
</tr>
<tr>
<td rowspan="5" width="14"><strong>Import into Germany </strong></td>
<td width="21"><strong>1-4</strong></td>
<td width="53"><strong>Food</strong></td>
<td width="36">11,9</td>
<td width="31">0,6</td>
<td width="36">2,8</td>
<td colspan="2" width="43">2,8</td>
<td colspan="2" width="31">28,6</td>
<td colspan="3" width="39">1,1</td>
<td colspan="3" width="32">21,2</td>
<td width="41">6,0</td>
<td width="36">14,8</td>
<td width="36">17,2</td>
<td width="35">7,1</td>
<td width="26">8,5</td>
<td width="0"></td>
</tr>
<tr>
<td width="21"><strong>5</strong></td>
<td width="53"><strong>Raw materials </strong></td>
<td width="36">2,4</td>
<td width="31">69,6</td>
<td width="36">5,8</td>
<td colspan="2" width="43">83,6</td>
<td colspan="2" width="31">7,7</td>
<td colspan="3" width="39">0,6</td>
<td colspan="3" width="32">2,5</td>
<td width="41">9,8</td>
<td width="36">9,1</td>
<td width="36">2,7</td>
<td width="35">35,6</td>
<td width="26">11,6</td>
<td width="0"></td>
</tr>
<tr>
<td width="21"><strong>6</strong></td>
<td width="53"><strong>Semi-processed goods </strong></td>
<td width="36">8,7</td>
<td width="31">25,2</td>
<td width="36">16,0</td>
<td colspan="2" width="43">7,8</td>
<td colspan="2" width="31">5,9</td>
<td colspan="3" width="39">21,0</td>
<td colspan="3" width="32">16,1</td>
<td width="41">14,0</td>
<td width="36">11,0</td>
<td width="36">68,4</td>
<td width="35">15,1</td>
<td width="26">8,7</td>
<td width="0"></td>
</tr>
<tr>
<td width="21"><strong>7-8</strong></td>
<td width="53"><strong>Finished products </strong></td>
<td width="36">77,0</td>
<td width="31">4,6</td>
<td width="36">75,4</td>
<td colspan="2" width="43">5,8</td>
<td colspan="2" width="31">57,8</td>
<td colspan="3" width="39">77,3</td>
<td colspan="3" width="32">60,2</td>
<td width="41">70,2</td>
<td width="36">65,1</td>
<td width="36">11,7</td>
<td width="35">42,2</td>
<td width="26">71,2</td>
<td width="0"></td>
</tr>
<tr>
<td colspan="2" width="74"><strong>Import to Germany, total </strong></td>
<td width="36">100,0</td>
<td width="31">100,0</td>
<td width="36">100,0</td>
<td colspan="2" width="43">100,0</td>
<td colspan="2" width="31">100,0</td>
<td colspan="3" width="39">100,0</td>
<td colspan="3" width="32">100,0</td>
<td width="41">100,0</td>
<td width="36">100,0</td>
<td width="36">100,0</td>
<td width="35">100,0</td>
<td width="26">100,0</td>
<td width="0"></td>
</tr>
<tr>
<td rowspan="5" width="14"><strong>Turnover of Germany </strong></td>
<td width="21"><strong>1-4</strong></td>
<td width="53"><strong>Food </strong></td>
<td width="36">10,0</td>
<td width="31">2,0</td>
<td width="36">5,3</td>
<td colspan="2" width="43">4,2</td>
<td colspan="2" width="31">21,2</td>
<td colspan="3" width="39">5,1</td>
<td colspan="3" width="32">15,1</td>
<td width="41">7,4</td>
<td width="36">11,5</td>
<td width="36">15,2</td>
<td width="35">7,6</td>
<td width="26">7,1</td>
<td width="0"></td>
</tr>
<tr>
<td width="21"><strong>5</strong></td>
<td width="53"><strong>Raw materials </strong></td>
<td width="36">1,7</td>
<td width="31">39,7</td>
<td width="36">2,8</td>
<td colspan="2" width="43">58,1</td>
<td colspan="2" width="31">5,7</td>
<td colspan="3" width="39">0,5</td>
<td colspan="3" width="32">1,1</td>
<td width="41">2,5</td>
<td width="36">3,2</td>
<td width="36">1,7</td>
<td width="35">18,0</td>
<td width="26">6,0</td>
<td width="0"></td>
</tr>
<tr>
<td width="21"><strong>6</strong></td>
<td width="53"><strong>Semi-processed goods </strong></td>
<td width="36">8,9</td>
<td width="31">15,1</td>
<td width="36">8,8</td>
<td colspan="2" width="43">6,4</td>
<td colspan="2" width="31">5,4</td>
<td colspan="3" width="39">12,8</td>
<td colspan="3" width="32">8,1</td>
<td width="41">11,0</td>
<td width="36">6,2</td>
<td width="36">42,4</td>
<td width="35">10,2</td>
<td width="26">7,0</td>
<td width="0"></td>
</tr>
<tr>
<td width="21"><strong>7-8</strong></td>
<td width="53"><strong>Finished products </strong></td>
<td width="36">79,4</td>
<td width="31">43,2</td>
<td width="36">83,1</td>
<td colspan="2" width="43">31,3</td>
<td colspan="2" width="31">67,6</td>
<td colspan="3" width="39">81,6</td>
<td colspan="3" width="32">75,6</td>
<td width="41">79,1</td>
<td width="36">79,1</td>
<td width="36">40,8</td>
<td width="35">64,2</td>
<td width="26">79,9</td>
<td width="0"></td>
</tr>
<tr>
<td colspan="2" width="74"><strong>Turnover Germany – Baltic States, total*</strong></td>
<td width="36">100,0</td>
<td width="31">100,0</td>
<td width="36">100,0</td>
<td colspan="2" width="43">100,0</td>
<td colspan="2" width="31">100,0</td>
<td colspan="3" width="39">100,0</td>
<td colspan="3" width="32">100,0</td>
<td width="41">100,0</td>
<td width="36">100,0</td>
<td width="36">100,0</td>
<td width="35">100,0</td>
<td width="26">100,0</td>
<td width="0"></td>
</tr>
</tbody>
</table>
<p>* excluding returned, replaced and not allocated by commodity groups goods.</p>
<p>Note. The Baltic countries are presented in descending order of their turnover with Germany in 2014.</p>
<p>&nbsp;</p>
<p>The main part of the German-Baltic trade (52.6% of the turnover) is in:</p>
<p>- German exports of finished products into Poland (14.1%), Russia (10.4%) and Sweden (7.0%),</p>
<p>- Import of finished products from Poland (10.8%) and raw materials from Russia (10.2%).</p>
<p>&nbsp;</p>
<p>A substantial component is also import of raw materials from Norway (6.1%). In other cases, the share of product groups by country does not exceed 5%. Germany has a positive balance in the German-Baltic trade of food and finished products, and a negative balance – in the trade in raw materials and semi-processed goods. The total surplus for Germany consists mainly of excess surplus in finished products (Poland and Sweden) over the deficit of raw material (Norway and Russia).</p>
<p>The structure of German exports to the Baltic States and the overall German exports are very similar: the maximum difference (the share of food) is only slightly more than two percentage points. German imports from the Baltic States, by contrast, strongly deviates from the overall German import: on the one hand, by the shares of raw materials and semi-finished goods (the German import from the Baltic States has, respectively, 24 and 6 percentage points more than the overall German import); on the other hand, by the share of finished products (the German import from the Baltic States has 29 percentage points less than the overall German import). As a result, the basis of turnover of Germany with the world and with the Baltic States is the same &#8211; products with a higher degree of processing, namely finished products (64 and 80%, respectively), but the value of the goods with a low and medium degree of processing &#8211; raw materials and semi-finished products &#8211; in the German – Baltic trade is much larger (28%) than in the foreign trade of Germany as a whole (13%).</p>
<p>The structure of German exports in each of the Baltic countries is characterized by a common main feature &#8211; a strong dominance of finished products (ranging from 74.1% in Denmark to 94.0% in Russia; average Baltic and average world indicators are, respectively, 85.1 and 86.9%). At the same time, six countries have an additional focus: on food &#8211; Denmark (16.4%), Iceland (12.1%), Lithuania (11.6%), Latvia (10.2%) with the average Baltic and average world level of, respectively, 8.2 and 6.0%; semi-processed goods &#8211; Estonia (10.1%) and Poland (9.0%) with the average Baltic and average world level of, respectively, 5.5 and 5.6%. In four countries (Norway, Sweden, Finland, Russia) there are no such focuses.</p>
<p>As sources of the German import certain Baltic countries show considerable specificity. The most striking peculiarity is that of these three importers with an extremely low share of finished products (Russia &#8211; 4.6%, Norway &#8211; 5.8%, Iceland &#8211; 11.7%). For the rest of the Baltic countries this figure ranges from 57.8 to 77.3%, the average Baltic value is 42.2%, the world average is 71.2%. The above mentioned three countries are specialized in: Norway and Russia &#8211; raw materials (83.6 and 69.6%, respectively), Iceland – semi-processed goods (68.4%). Russia has an additional emphasis on semi-processed products (25.2%), Norway and Iceland do not have it. Since the absolute volume of imports of semi-processed products from Iceland is very small, the above-noted important role of the Baltic States for Germany as a source of raw materials and semi-processed products is concentrated in only two of the ten countries &#8211; Russia (raw materials and semi-processed products) and Norway (raw materials).</p>
<p>Among the other seven importers, who are leaders in finished products, two groups with additional focuses can be distinguished:</p>
<p>• focus on food &#8211; Denmark (28.6%), Lithuania (21.2%), Latvia (14.8%), Poland (11.9%) with the world average of 8.5%;</p>
<p>• on semi-processed products &#8211; Finland (21.0%), Lithuania (16.1%), Sweden (16.0%), Estonia (14.0%) with the world average of 8.7%.</p>
<p>The concretization of these features in the context of three-digit product classification is presented in Tables 8 and 9.</p>
<p>&nbsp;</p>
<p><strong>Table 8. Main goods of the German export in the Baltic States in 2014.</strong></p>
<table width="513">
<thead>
<tr>
<td rowspan="2" width="43"><strong>Country</strong></td>
<td colspan="4" width="323"><strong>Main goods of export from Germany to a country </strong></td>
<td colspan="2" width="147"><strong>Main goods of the additional export focus of the country </strong></td>
</tr>
<tr>
<td width="133"><strong>Goods (code, name) </strong></td>
<td width="45"><strong>Share in the export from Germany to a country, %</strong></td>
<td width="73"><strong>Share of a country in the overall German export of these goods, %</strong></td>
<td width="73"><strong>Position of the country in the overall German export of the goods </strong></td>
<td width="101"><strong>Goods position (code, name) </strong></td>
<td width="46"><strong>Share in the export of Germany to a country, %</strong></td>
</tr>
</thead>
<tbody>
<tr>
<td width="43"><strong>Norway</strong></td>
<td width="133">885. Passenger cars</td>
<td width="45">19,2</td>
<td width="73">1,3</td>
<td width="73">18</td>
<td colspan="2" width="147"></td>
</tr>
<tr>
<td width="43"><strong>Latvia</strong></td>
<td width="133">885. Passenger cars</td>
<td width="45">12,4</td>
<td width="73">0,1</td>
<td width="73">48</td>
<td width="101">423. Strong alcohol beverages</td>
<td width="46">1,2</td>
</tr>
<tr>
<td width="43"><strong>Sweden</strong></td>
<td width="133">885. Passenger cars</td>
<td width="45">11,6</td>
<td width="73">2,0</td>
<td width="73">14</td>
<td colspan="2" width="147"></td>
</tr>
<tr>
<td width="43"><strong>Iceland</strong></td>
<td width="133">885. Passenger cars</td>
<td width="45">9,9</td>
<td width="73">0,0</td>
<td width="73">78</td>
<td width="101">206. Fish, shellfish, mussels</td>
<td width="46">2,1</td>
</tr>
<tr>
<td width="43"><strong>Estonia</strong></td>
<td width="133">861. Equipment for production and distribution of electricity</td>
<td width="45">9,2</td>
<td width="73">0,3</td>
<td width="73">44</td>
<td width="101">669. Oil products</td>
<td width="46">4,3</td>
</tr>
<tr>
<td width="43"><strong>Finland</strong></td>
<td width="133">885. Passenger cars</td>
<td width="45">8,4</td>
<td width="73">0,6</td>
<td width="73">27</td>
<td colspan="2" width="147"></td>
</tr>
<tr>
<td width="43"><strong>Russia</strong></td>
<td width="133">884. Automobile components</td>
<td width="45">8,3</td>
<td width="73">3,3</td>
<td width="73">10</td>
<td colspan="2" width="147"></td>
</tr>
<tr>
<td width="43"><strong>Poland</strong></td>
<td width="133">884. Automobile components</td>
<td width="45">8,2</td>
<td width="73">5,1</td>
<td width="73">6</td>
<td width="101">669. Oil products</td>
<td width="46">3,7</td>
</tr>
<tr>
<td width="43"><strong>Denmark</strong></td>
<td width="133">861. Machinery for production and distribution of energy</td>
<td width="45">5,3</td>
<td width="73">1,7</td>
<td width="73">18</td>
<td width="101">204. Meat and meat products</td>
<td width="46">3,9</td>
</tr>
<tr>
<td width="43"><strong>Lithuania </strong></td>
<td width="133">834. Pharmaceutical products</td>
<td width="45">5,0</td>
<td width="73">0,2</td>
<td width="73">49</td>
<td width="101">395. Other foods of plant origin</td>
<td width="46">1,6</td>
</tr>
</tbody>
</table>
<p>Note: The Baltic countries are presented in descending order of the proportion of the main export commodity in the exports from Germany in 2014.</p>
<p><strong>Table 9. Main goods of the German import from the Baltic States in 2014.</strong></p>
<table width="514">
<thead>
<tr>
<td rowspan="2" width="46"><strong>Country</strong></td>
<td colspan="4" width="320"><strong>Main goods of the import into Germany from a country </strong></td>
<td colspan="2" width="148"><strong>Main goods of the additional import focus </strong></td>
</tr>
<tr>
<td width="132"><strong>Goods (code, name) </strong></td>
<td width="43"><strong>Share in the import into Germany from a country, %</strong></td>
<td width="74"><strong>Share of a country in the overall German import of these goods, %</strong></td>
<td width="72"><strong>Position of a country in the overall German imports of the goods </strong></td>
<td width="106"><strong>Position of the goods (code, name) </strong></td>
<td width="43"><strong>Share in the import into Germany from a country, %</strong></td>
</tr>
</thead>
<tbody>
<tr>
<td width="46"><strong>Norway</strong></td>
<td width="132">518. Oil and natural gas</td>
<td width="43">82,0</td>
<td width="74">18,9</td>
<td width="72">2</td>
</tr>
<tr>
<td width="46"><strong>Russia</strong></td>
<td width="132">518. Oil and natural gas</td>
<td width="43">66,6</td>
<td width="74">30,8</td>
<td width="72">1</td>
<td width="106">669. Oil products</td>
<td width="43">16,3</td>
</tr>
<tr>
<td width="46"><strong>Iceland</strong></td>
<td width="132">645. Aluminum and aluminum alloys, including waste and scrap</td>
<td width="43">64,3</td>
<td width="74">5,6</td>
<td width="72">8</td>
</tr>
<tr>
<td width="46"><strong>Finland</strong></td>
<td width="132">708. Paperandcardboard</td>
<td width="43">20,4</td>
<td width="74">19,0</td>
<td width="72">2</td>
<td width="106">608. Semi-finished products of cellulose fiber</td>
<td width="43">5,5</td>
</tr>
<tr>
<td width="46"><strong>Poland</strong></td>
<td width="132">884. Automobile components</td>
<td width="43">13,2</td>
<td width="74">10,6</td>
<td width="72">3</td>
<td width="106">
<ol start="6">
<li>Fish, shell fish, mussels</li>
</ol>
</td>
<td width="43">2,0</td>
</tr>
<tr>
<td width="46"><strong>Sweden</strong></td>
<td width="132">708. Paper and cardboard</td>
<td width="43">12,1</td>
<td width="74">21,3</td>
<td width="72">1</td>
<td width="106">608. Semi-finished products of cellulose fiber</td>
<td width="43">4,2</td>
</tr>
<tr>
<td width="46"><strong>Estonia</strong></td>
<td width="132">815. Items made of wood (apart from furniture)</td>
<td width="43">11,6</td>
<td width="74">2,2</td>
<td width="72">10</td>
<td width="106">607. Lumber</td>
<td width="43">5,7</td>
</tr>
<tr>
<td width="46"><strong>Lithuania </strong></td>
<td width="132">875. Furniture</td>
<td width="43">10,0</td>
<td width="74">1,3</td>
<td width="72">18</td>
<td width="106">206. Fish, shell fish, mussels</td>
<td width="43">7,1</td>
</tr>
<tr>
<td width="46"><strong>Latvia </strong></td>
<td width="132">709. Plywood and plywood sheets, chipboards</td>
<td width="43">8,2</td>
<td width="74">2,6</td>
<td width="72">11</td>
<td width="106">383. Oil cake</td>
<td width="43">5,2</td>
</tr>
<tr>
<td width="46"><strong>Denmark</strong></td>
<td width="132">834. Pharmaceutical products</td>
<td width="43">6,9</td>
<td width="74">2,1</td>
<td width="72">11</td>
<td width="106">204. Meat and meat products</td>
<td width="43">6,7</td>
</tr>
</tbody>
</table>
<p>Note. The Baltic countries are presented in descending order of the share of the main imported goods in the imports of Germany in 2014.</p>
<p>&nbsp;</p>
<p>Passenger cars belonging to the product group &#8220;finished products&#8221; are the main commodity items of the overall German exports (0.9%), German exports to the Baltic States (6.9%) and German exports into five Baltic countries (Norway, Latvia, Sweden, Iceland , Finland). “Automotive components”, which are close to the group of passenger cars, are the leader in exports from Germany to Russia and Poland. Only in three cases, the leading role is played by other products, also belonging to the group of “finished products”- equipment for the production and distribution of electricity (Estonia and Denmark) and pharmaceutical products (Lithuania). Five countries (Poland, Russia, Sweden, Norway, Denmark) are in the top twenty of the German consumers for the corresponding main goods, with the highest position &#8211; the sixth in export of automobile components from Germany –is held by Poland. Two countries (Estonia and Poland) have the same additional export emphasis on semi-finished products (oil products), and there is no unity for countries with a focus on food.</p>
<p>Oil and natural gas belonging to the commodity group &#8220;raw material&#8221; are the main position of the overall German imports (9.5%), German imports from the Baltic States (32.9%) and German imports from Norway and Russia. Imports from Iceland to Germany are focused on aluminum (group &#8220;semi-finished products&#8221;). Specialization on the group &#8220;finished products&#8221; is characteristic of German imports from the other seven Baltic countries, including: specialization on products related to the processing of wood &#8211; from Finland, Sweden (paper and cardboard), Estonia (wood products except furniture), Lithuania (furniture), Latvia (plywood); on automotive components &#8211; from Poland, for pharmaceutical products – from Denmark. All Baltic countries are in the top twenty of the German suppliers of the relevant main products, with the highest &#8211; the first – positions held by Russia (oil/gas) and Sweden (paper/cardboard). Semi-finished products as an additional import emphasis are closely related to the main item: in Russia &#8211; oil products (to oil/gas), in Finland and Sweden &#8211; semi-finished products made of cellulose (paper/cardboard), Estonia – lumber (with woodwork).</p>
<p>Norway offers the highest shares in the main goods both in the export from Germany, and in the imports to Germany, but if for passenger cars, the figure is 19.2% of German exports, for oil/gas it is extremely high &#8211; 82.0% of German imports. Concentration of German imports on a single goods group is also characteristic of Russia (oil/gas &#8211; 66.6%) and Iceland (aluminum/aluminum alloys &#8211; 64.3%), while in other countries the figure is in the range of 6, 9 to 20.4%. In fact, German import from Norway, Russia and Iceland is monocultural, and monocultural are items of low-grade processing. Before the crisis, which began in autumn 2008, this one-sidedness did not prevent active growth of imports from these countries, but in 2008-2014 the cumulative decline in German imports from the Baltic States in the context of the four commodity groups appeared to be by about 3/5 due to the reduction of imports of oil/gas from Norway and Russia: Norway had more than ⅓, and Russia &#8211; about ¼ of this recession. As a result, imports from Norway in 2008-2014 decreased by 13.8%, while imports from Russia increased by 3.5%. However, this happened only because reduction of Russian imports of oil/gas was more than offset by a rise in imports of Russian oil products.</p>
<p>In the first quarter of 2015 this compensation was no longer valid. Trade turnover between Germany and Russia showed the most negative dynamics among the Baltic countries. Changes in the German-Baltic trade in the first quarter of 2015 compared to the same period in 2014 are presented in Tables 10 and 11.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p><strong>Table</strong><strong>  10.</strong><strong> </strong><strong>Trade between Germany and Baltic States in 2014-2015.</strong></p>
<table width="519">
<thead>
<tr>
<td rowspan="3" width="68"><strong>Country/Group of countries </strong></td>
<td colspan="3" width="126"><strong>Turnover </strong></td>
<td colspan="3" width="132"><strong>Export from Germany </strong></td>
<td colspan="3" width="121"><strong>Import into Germany </strong></td>
<td colspan="2" width="72"><strong>Balance for Germany </strong></td>
</tr>
<tr>
<td width="38"><strong>January – March </strong><strong> 2014</strong></td>
<td width="39"><strong>January – March </strong><strong>2015</strong></td>
<td width="49"><strong>Change, </strong><strong>2015/2014</strong></td>
<td width="42"><strong>January – March, </strong><strong>2014</strong></td>
<td width="38"><strong>January – March, </strong><strong>2015</strong></td>
<td width="52"><strong>Change, </strong><strong>2015/2014</strong></td>
<td width="36"><strong>January &#8211; March</strong><strong> 2014</strong></td>
<td width="36"><strong>January – March </strong><strong>2015</strong></td>
<td width="49"><strong>Change, </strong><strong>2015/2014</strong></td>
<td width="36"><strong>January – March, </strong><strong> 2014</strong></td>
<td width="36"><strong>January – March </strong><strong> 2015</strong></td>
</tr>
<tr>
<td colspan="2" width="77"><strong>Bln euros</strong></td>
<td width="49"><strong>%</strong></td>
<td colspan="2" width="80"><strong>Bln euros </strong></td>
<td width="52"><strong>%</strong></td>
<td colspan="2" width="72"><strong>Bln euros </strong></td>
<td width="49"><strong>%</strong></td>
<td colspan="2" width="72"><strong>Bln euros</strong></td>
</tr>
</thead>
<tbody>
<tr>
<td width="68"><strong>Poland</strong></td>
<td width="38">20,9</td>
<td width="39">23,3</td>
<td width="49">111,2</td>
<td width="42">11,4</td>
<td width="38">12,4</td>
<td width="52">109,5</td>
<td width="36">9,6</td>
<td width="36">10,8</td>
<td width="49">113,2</td>
<td width="36">1,8</td>
<td width="36">1,6</td>
</tr>
<tr>
<td width="68"><strong>Russia</strong></td>
<td width="38">18,1</td>
<td width="39">12,4</td>
<td width="49">68,4</td>
<td width="42">7,5</td>
<td width="38">5,0</td>
<td width="52">66,1</td>
<td width="36">10,5</td>
<td width="36">7,4</td>
<td width="49">70,1</td>
<td width="36">-3,0</td>
<td width="36">-2,4</td>
</tr>
<tr>
<td width="68"><strong>Sweden</strong></td>
<td width="38">8,9</td>
<td width="39">9,1</td>
<td width="49">101,8</td>
<td width="42">5,3</td>
<td width="38">5,6</td>
<td width="52">105,4</td>
<td width="36">3,6</td>
<td width="36">3,4</td>
<td width="49">96,5</td>
<td width="36">1,8</td>
<td width="36">2,2</td>
</tr>
<tr>
<td width="68"><strong>Denmark </strong></td>
<td width="38">7,1</td>
<td width="39">7,1</td>
<td width="49">99,8</td>
<td width="42">4,0</td>
<td width="38">4,4</td>
<td width="52">108,5</td>
<td width="36">3,0</td>
<td width="36">2,7</td>
<td width="49">88,3</td>
<td width="36">1,0</td>
<td width="36">1,7</td>
</tr>
<tr>
<td width="68"><strong>Norway</strong></td>
<td width="38">7,3</td>
<td width="39">6,5</td>
<td width="49">89,7</td>
<td width="42">1,9</td>
<td width="38">2,1</td>
<td width="52">106,5</td>
<td width="36">5,3</td>
<td width="36">4,4</td>
<td width="49">83,5</td>
<td width="36">-3,4</td>
<td width="36">-2,4</td>
</tr>
<tr>
<td width="68"><strong>Finland</strong></td>
<td width="38">3,9</td>
<td width="39">4,2</td>
<td width="49">107,5</td>
<td width="42">2,2</td>
<td width="38">2,3</td>
<td width="52">101,1</td>
<td width="36">1,7</td>
<td width="36">2,0</td>
<td width="49">116,0</td>
<td width="36">0,5</td>
<td width="36">0,3</td>
</tr>
<tr>
<td width="68"><strong>Lithuania </strong></td>
<td width="38">1,0</td>
<td width="39">1,0</td>
<td width="49">104,7</td>
<td width="42">0,6</td>
<td width="38">0,6</td>
<td width="52">104,9</td>
<td width="36">0,4</td>
<td width="36">0,4</td>
<td width="49">104,3</td>
<td width="36">0,2</td>
<td width="36">0,2</td>
</tr>
<tr>
<td width="68"><strong>Estonia</strong></td>
<td width="38">0,6</td>
<td width="39">0,5</td>
<td width="49">85,8</td>
<td width="42">0,5</td>
<td width="38">0,4</td>
<td width="52">81,0</td>
<td width="36">0,1</td>
<td width="36">0,1</td>
<td width="49">103,6</td>
<td width="36">0,3</td>
<td width="36">0,2</td>
</tr>
<tr>
<td width="68"><strong>Latvia</strong></td>
<td width="38">0,5</td>
<td width="39">0,5</td>
<td width="49">94,0</td>
<td width="42">0,4</td>
<td width="38">0,3</td>
<td width="52">92,5</td>
<td width="36">0,2</td>
<td width="36">0,1</td>
<td width="49">97,7</td>
<td width="36">0,2</td>
<td width="36">0,2</td>
</tr>
<tr>
<td width="68"><strong>Iceland </strong></td>
<td width="38">0,2</td>
<td width="39">0,2</td>
<td width="49">100,3</td>
<td width="42">0,1</td>
<td width="38">0,1</td>
<td width="52">126,4</td>
<td width="36">0,2</td>
<td width="36">0,1</td>
<td width="49">88,2</td>
<td width="36">-0,1</td>
<td width="36">0,0</td>
</tr>
<tr>
<td width="68"><strong>Baltic countries, total</strong></td>
<td width="38">68,5</td>
<td width="39">64,8</td>
<td width="49">94,6</td>
<td width="42">34,0</td>
<td width="38">33,2</td>
<td width="52">97,7</td>
<td width="36">34,5</td>
<td width="36">31,6</td>
<td width="49">91,4</td>
<td width="36">-0,6</td>
<td width="36">1,6</td>
</tr>
<tr>
<td width="68"><strong> </strong></td>
<td width="38"></td>
<td width="39"></td>
<td width="49"></td>
<td width="42"></td>
<td width="38"></td>
<td width="52"></td>
<td width="36"></td>
<td width="36"></td>
<td width="49"></td>
<td width="36"></td>
<td width="36"></td>
</tr>
<tr>
<td width="68"><strong>World, total</strong></td>
<td width="38">508,9</td>
<td width="39">528,1</td>
<td width="49">103,8</td>
<td width="42">278,3</td>
<td width="38">293,3</td>
<td width="52">105,4</td>
<td width="36">230,6</td>
<td width="36">234,8</td>
<td width="49">101,8</td>
<td width="36">47,6</td>
<td width="36">58,5</td>
</tr>
</tbody>
</table>
<p>&nbsp;</p>
<p><strong>Table</strong><strong> 11.</strong><strong> </strong><strong>Factors of growth/recession in trade between Germany and the Baltic States in 2014-2015.</strong></p>
<table width="510">
<tbody>
<tr>
<td rowspan="3" width="61"><strong>Country/group of countries </strong></td>
<td colspan="4" width="149"><strong>Turnover Germany – Baltic States, </strong><strong>2015</strong><strong>/2014</strong></td>
<td colspan="4" width="151"><strong>Export from Germany into the Baltic States, 2015/2014</strong></td>
<td colspan="4" width="148"><strong>Import into Germany from the Baltic States, 2015/2014</strong></td>
<td width="1"></td>
</tr>
<tr>
<td width="33"><strong>Growth </strong></td>
<td width="40"><strong>Recession</strong></td>
<td width="38"><strong>Share in growth </strong></td>
<td width="38"><strong>Share in recession </strong></td>
<td width="33"><strong>Growth </strong></td>
<td width="40"><strong>Recession </strong></td>
<td width="38"><strong>Share in growth </strong></td>
<td width="40"><strong>Share in recession </strong></td>
<td width="33"><strong>Growth </strong></td>
<td width="40"><strong>Recession</strong></td>
<td width="38"><strong>Share in growth</strong></td>
<td colspan="2" width="38"><strong>Share in recession </strong></td>
</tr>
<tr>
<td colspan="2" width="74"><strong>Bln euros</strong></td>
<td colspan="2" width="76"><strong>%</strong></td>
<td colspan="2" width="74"><strong>Bln euros</strong></td>
<td colspan="2" width="78"><strong>%</strong></td>
<td colspan="2" width="73"><strong>Bln euros</strong></td>
<td colspan="3" width="76"><strong>%</strong></td>
</tr>
<tr>
<td width="61"><strong>Poland</strong></td>
<td width="33">+2,3</td>
<td width="40"></td>
<td width="38">+82,3</td>
<td width="38"></td>
<td width="33">+1,1</td>
<td width="40"></td>
<td width="38">+56,6</td>
<td width="40"></td>
<td width="33">+1,3</td>
<td width="40"></td>
<td width="38">+81,2</td>
<td colspan="2" width="38"></td>
</tr>
<tr>
<td width="61"><strong>Russia</strong></td>
<td width="33"></td>
<td width="40">-5,7</td>
<td width="38"></td>
<td width="38">-86,7</td>
<td width="33"></td>
<td width="40">-2,6</td>
<td width="38"></td>
<td width="40">-95,7</td>
<td width="33"></td>
<td width="40">-3,1</td>
<td width="38"></td>
<td colspan="2" width="38">-69,5</td>
</tr>
<tr>
<td width="61"><strong>Sweden</strong></td>
<td width="33">+0,2</td>
<td width="40"></td>
<td width="38">+5,7</td>
<td width="38"></td>
<td width="33">+0,3</td>
<td width="40"></td>
<td width="38">+15,0</td>
<td width="40"></td>
<td width="33"></td>
<td width="40">-0,1</td>
<td width="38"></td>
<td colspan="2" width="38">-2,8</td>
</tr>
<tr>
<td width="61"><strong>Denmark</strong></td>
<td width="33"></td>
<td width="40">-0,0</td>
<td width="38"></td>
<td width="38">-0,2</td>
<td width="33">+0,3</td>
<td width="40"></td>
<td width="38">+18,0</td>
<td width="40"></td>
<td width="33"></td>
<td width="40">-0,4</td>
<td width="38"></td>
<td colspan="2" width="38">-7,9</td>
</tr>
<tr>
<td width="61"><strong>Norway</strong></td>
<td width="33"></td>
<td width="40">-0,8</td>
<td width="38"></td>
<td width="38">-11,4</td>
<td width="33">+0,1</td>
<td width="40"></td>
<td width="38">+6,7</td>
<td width="40"></td>
<td width="33"></td>
<td width="40">-0,9</td>
<td width="38"></td>
<td colspan="2" width="38">-19,4</td>
</tr>
<tr>
<td width="61"><strong>Finland </strong></td>
<td width="33">+0,3</td>
<td width="40"></td>
<td width="38">+10,4</td>
<td width="38"></td>
<td width="33">+0,0</td>
<td width="40"></td>
<td width="38">+1,3</td>
<td width="40"></td>
<td width="33">+0,3</td>
<td width="40"></td>
<td width="38">+17,4</td>
<td colspan="2" width="38"></td>
</tr>
<tr>
<td width="61"><strong>Lithuania </strong></td>
<td width="33">+0,0</td>
<td width="40"></td>
<td width="38">+1,6</td>
<td width="38"></td>
<td width="33">+0,0</td>
<td width="40"></td>
<td width="38">+1,5</td>
<td width="40"></td>
<td width="33">+0,0</td>
<td width="40"></td>
<td width="38">+1,1</td>
<td colspan="2" width="38"></td>
</tr>
<tr>
<td width="61"><strong>Estonia</strong></td>
<td width="33"></td>
<td width="40">-0,1</td>
<td width="38"></td>
<td width="38">-1,3</td>
<td width="33"></td>
<td width="40">-0,1</td>
<td width="38"></td>
<td width="40">-3,3</td>
<td width="33">+0,0</td>
<td width="40"></td>
<td width="38">+0,3</td>
<td colspan="2" width="38"></td>
</tr>
<tr>
<td width="61"><strong>Latvia</strong></td>
<td width="33"></td>
<td width="40">-0,0</td>
<td width="38"></td>
<td width="38">-0,5</td>
<td width="33"></td>
<td width="40">-0,0</td>
<td width="38"></td>
<td width="40">-1,0</td>
<td width="33"></td>
<td width="40">-0,0</td>
<td width="38"></td>
<td colspan="2" width="38">-0,1</td>
</tr>
<tr>
<td width="61"><strong>Iceland </strong></td>
<td width="33">+0,0</td>
<td width="40"></td>
<td width="38">+0,0</td>
<td width="38"></td>
<td width="33">+0,0</td>
<td width="40"></td>
<td width="38">+1,0</td>
<td width="40"></td>
<td width="33"></td>
<td width="40">-0,0</td>
<td width="38"></td>
<td colspan="2" width="38">-0,4</td>
</tr>
<tr>
<td width="61"><strong>Baltic countries, total</strong></td>
<td width="33">+2,8</td>
<td width="40">-6,6</td>
<td width="38">+100,0</td>
<td width="38">-100,0</td>
<td width="33">+1,9</td>
<td width="40">-2,7</td>
<td width="38">100,0</td>
<td width="40">-100,0</td>
<td width="33">+1,6</td>
<td width="40">-4,5</td>
<td width="38">+100,0</td>
<td colspan="2" width="38">-100,0</td>
</tr>
</tbody>
</table>
<p>Note. The Baltic countries are presented in Tables 10 and 11 in descending order of their turnover with Germany in January-March 2015.</p>
<p>&nbsp;</p>
<p>Russia accounted for more than 80% of decline of the German-Baltic trade, including more than 90% reduction in German exports and almost 70% reduction in German imports. The extent of the fall was 31.6% of turnover (including 33.9% for exports from Germany and 29.9% for imports into Germany). Noticeable, but not as dramatic, contraction of trade with Germany happened also in Estonia (-14.2% in turnover due to the decrease of exports from Germany by 19.0%) and in Norway (-10.3% in turnover due to 16.5% decline of imports in Germany). Two other countries &#8211; Denmark and Latvia &#8211; showed a moderate reduction in trade with Germany. The other five countries had a positive balance, with the biggest step forward made by Poland (it provided more than 80% of the growth of the German-Baltic turnover, including more than 50% of the growth of German exports and over 80% in increase in German imports). As a result, Poland, that was lagging behind Russia in turnover with Germany by 7.4% in 2012, surpassed Russia two-fold on this indicator in the first quarter of 2015.</p>
<p>The main products that led to a sharp collapse of the German-Russian trade:</p>
<ul>
<li>for exports from Germany &#8211; eight positions from the commodity group &#8220;finished products&#8221; (50.1% decline in the context of three-digit classification), namely: automotive components (13.7%), passenger cars (9.3%), aerial vehicles (6.8%), trucks (4.9%), machines without sectoral specialization (4.0%), office and computing equipment (3.9%), pharmaceutical products (3.8%), machinery for mining and construction (3.6%);</li>
<li>for imports into Germany &#8211; one position from the commodity group &#8220;raw material&#8221;, namely: oil/gas (84.4% decline in the context of three-digit classification); the negative trend was reinforced by reduction of imports of semi-finished products, namely oil products (10.7%), which is Russia&#8217;s second most important import goods, that previously performed the role of a shock absorber.</li>
</ul>
<p>The value of Russia as a trading company for Germany decreased markedly. The share of Russia in the export of goods from Germany declined from 2.6% in 2014 to 1.7% in 2015 (only three years ago, in 2012, it was 3.5%). As a German consumer the Russian Federation moved from the 12th place in 2014 to the 15th place in 2015. Russia’s best result was the 11th place in 2011-2012, and the worst – the 20th place in 1999. Russian automotive components descended from the 10th place in 2014 to the 18th place in 2015; Russia’s passenger cars &#8211; from the 15th to the 17th. If this trend persists, Russia can find itself already in two years in the third ten export partners of Germany, as it will cease to represent any serious business interest for Germany.</p>
<p>The share of Russia in the import of goods to Germany fell from 4.2% in 2014 to 3.1% in 2015 (the highest level of this indicator was recorded in 2012 &#8211; 4.7%). As a German supplier, Russia dropped from the 10th place in 2014 to the 12th place in 2015. In 2011-2013, the country kept the 7th place, in 1999 it was on the 16th place. In 2015, the Russian Federation retained the 1st place for the group &#8220;oil/gas&#8221; (its share in German imports amounted to 29.1%), but in the context of four-digit classification it kept the championship only for oil with a share of 28.2%, whereas for gas it moved to the 2nd place (with a share of 30.0%), losing to Norway (34.2%). Russia&#8217;s role in the import of oil/gas in Germany peaked in 2011 (36.8%); since then it has been steadily weakening, and since 2015 this trend has not been blocked, as before, by the increasing role of Russia in the German imports of oil products (2010 &#8211; 10.0%, 2014 &#8211; 23.3%, 2015 &#8211; 18.9%), and the other Russian products are not comparable with those main products in terms of imports in Germany. In the second ten import partners of Germany Russia will stay longer than in the same weight category for exports from Germany, but the probability of a significant reduction in the influence of Russian business on the German market is very high.</p>
<p>International trade, as well as the nature, abhors a vacuum. Collapsing trade relations with Russia will strengthen Germany&#8217;s orientation to other counterparties. Regarding the Baltic States, this would be beneficial, first of all, for Poland, Sweden and Norway: Poland will strengthen its leadership, Sweden will push Russia to the third place in terms of turnover, Norway will close the gap from Russia in terms of imports into Germany.</p>
<p><strong>List of references</strong></p>
<p>Statistisches Bundesamt. Genesis-Online Datenbank. Statistik 51000. Außenhandel. URL: https://www-genesis.destatis.de/genesis/online</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>[1] Here and elsewhere &#8211; calculated according to the Federal Statistical Office of Germany (Statistisches Bundesamt. Genesis-Online Datenbank. Statistik 51000. Außenhandel. URL: https://www-genesis.destatis.de/genesis/online). Dataareperiodicallyupdated. The Baltic countries are understood as countries that along with Germany are included in the Council of the Baltic Sea States (Denmark, Iceland, Latvia, Lithuania, Norway, Poland, Russia, Finland, Sweden, Estonia).</p>
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		<title>Economy of the Baltic States in the Light of New Global and Regional Challenges</title>
		<link>http://en.abfund.org/?p=1053</link>
		<comments>http://en.abfund.org/?p=1053#comments</comments>
		<pubDate>Wed, 18 Mar 2015 17:24:49 +0000</pubDate>
		<dc:creator><![CDATA[Admin]]></dc:creator>
				<category><![CDATA[Amber Bridge. Journal of Regional Studies]]></category>
		<category><![CDATA[№1 (4) 2015]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Estonia]]></category>
		<category><![CDATA[Foreign trade]]></category>
		<category><![CDATA[Latvia]]></category>
		<category><![CDATA[Lithuania]]></category>
		<category><![CDATA[Russia]]></category>

		<guid isPermaLink="false">http://en.abfund.org/?p=1053</guid>
		<description><![CDATA[Nikolay Maratovich Mezhevich — Doctor of Economic Sciences, Professor of the School of International Relations, Head of the International Master’s Program “Baltic and Nordic Studies” at the Saint-Petersburg State University, Chief Researcher at the Institute of the Problems of the Regional Economy of the Russian Academy of Sciences, Saint-Petersburg. The Evolution of post-Soviet space suggests [&#8230;]]]></description>
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<p><span style="font-weight: bold; color: rgb(30.000000%, 30.000000%, 30.000000%);">Nikolay Maratovich Mezhevich </span><span style="color: #4c4c4c;">— Doctor of Economic Sciences, Professor of the School of International Relations, Head of the International Master’s Program “Baltic and Nordic Studies” at the Saint-Petersburg State University, Chief Researcher at the Institute of the Problems of the Regional Economy of the Russian Academy of Sciences, Saint-Petersburg.</span></p>
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<p><span style="font-style: italic; color: #333333;">The Evolution of post-Soviet space suggests the emergence of a set of economic models. The three Baltic States (Estonia, Latvia, Lithuania) in the 1980-ies are building a new economic model (a unique to the post-Soviet space). The economy of the Baltic States is a complex system, which is highly dependent not only on economic but also on political realities. The objective of the study is to show the stages of evolution of the Baltic economic model, its main development features and prospects. The author used both economic and historical approaches to scientific analysis. The results of the study indicate that liberal Baltic economic model may persist in the medium term while maintaining previous support from the EU. Only good relations with Russia may help to maintain Baltic economic model. </span></p>
<p><span style="color: #cc002b;">Key words: </span><span style="color: #4c4c4c;">Baltic States, Estonia, Russia, foreign economic relations, economic structure, economic model, the political elites. </span></p>
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<p>The natural development of an economic model for the Baltic countries is an integrated process that is determined by political rather that economic reality. A quarter of a century after these countries gained economic independence (which existed long before August 1991), we can put Baltic economic developments into perspective.</p>
<p>Russian and foreign analysts always hit a wall when trying to view the economic development of Estonia, Latvia and Lithuania from both neo-Keynesian and neoclassical standpoints. Why? Because after 1991, the economy of the Baltics was harshly dictated by political reasons. The basis for the Baltic economic model were separatism and nationalism rather than balance and efficiency.[1]In reality. this European-looking model is not what it seems.</p>
<p>Prior to Perestroyka, the economic situation of the Baltic nations within the Soviet Union used to be as follows: in 1986, the fixed asset value was 5875 rubles for every Soviet citizen. This figure had noticeable disproportion throughout the country: on one hand, it made 8007 rubles in Estonia, 6923 rubles in Latvia, 6111 rubles in Lithuania; on the other hand, there was as low as 5500 rubles per citizen in Belorussia, 4500 rubles in Moldavia, 3823 rubles in Azerbaijan and 2291 rubles in Tajikistan.</p>
<p>The republics found themselves to be divided by a growing salary gap. In 1940, workers and employees’ salaries in different republics saw a maximum dispersion of 10 rubles. Then it reached 21 rubles in 1960, 33 rubles in 1970, and as high as 78 rubles in 1988. The contrasts looked even more striking in agriculture, with the difference between the top and bottom kolkhoz members&#8217; salaries making 74 rubles in 1970 and 159  rubles in 1989.[2]It is worth noting that the Lithuanian, Latvian and Estonian Soviet Republics were holding the lead.</p>
<p>&#8220;Production reconstruction and enhancement process in the Baltic countries showed a faster rate than elsewhere in the Soviet Union, mainly due to the fact the Latvia and Estonia were reserves of qualified workforce for the whole Soviet state.  Moreover, infrastructure in the Baltic region was almost intact during the war».[3]</p>
<p>The share of Baltic population with over 300 rubles of total income was the biggest in 1990. The national average for the whole USSR equaled 8.8 percent while reaching 19.8 percent in Estonia, 14.5 percent in Latvia and 13.8 percent in Lithuania. The poverty rate in these republics was also among the lowest, people with 75-ruble income making 1 percent of the whole Estonian and Latvian population and 1.2 percent of Lithuanians, whereas it was republics with the highest poverty headcount that developed into the severest autocracies in post-Soviet era.[4]</p>
<p>Since this region was the most efficient from the investment point of view, Moscow sought to allocate new industrial facilities here.  Compared to other regions, it took less time to master production in the Baltics.</p>
<p>The share of new fixed assets in the Baltic republics was higher that the USSR average, with more up-to-date and less obsolete facilities and technology. Agriculture showed a similar picture: kolkhozes and sovkhozes were distributed fertilizers, machinery, forage, imported elite breeding cattle, etc. on more favorable terms.</p>
<p>In the early 1990s, Vilnius, Riga and Tallinn provided much similar models of economic development in the form of regional cost-accounting plans. The Baltic nations, yet Soviet at the time, viewed the future reforms  based on their nostalgic, and sometimes inadequate, ideas and memories of what the so-called ‘first republics’ used to be. The mythology of their past played a key role in their denial of the present life within the USSR. It was as early as 1991 when we used to point out the importance of the Soviet heritage in the later economic development of the countries.[5] Later this idea was multiply referred to and developed in a number of academic papers.[6]L. Grigoriev and his fellow contributors believe that &#8216;the Baltic countries boasted the best starting conditions (compared to other post-Soviet states) for building a market economy, with huge innovational potential was accumulated there. The region was more like a laboratory where improved Soviet economic models were tested. The Baltic republics always enjoyed a privileged status among others, as seen from the investment figures of 1970–1980: the investment volume per capita was the highest.‘</p>
<p>The leaders of the Baltic ‘people’s fronts’ were not experts in market laws and could not estimate the real value of the national resources since they all were previously living in a centralized state-controlled planned economy, where one single center was busy allocating funds as well as distributing the product.</p>
<p>After having seized power, the newly formed elite had to deal with the opposition which was all concentrated around key Soviet industrial facilities. Such factories and plants as Latvian VEF, RAF, Alfa or Estonian Dvigatel, Eesti Kabel, Kreenholm comprised the core and the basis of the opposition. Disrupting these would put an end to opposition. Low competitiveness of these firms was another pretext for de-industrialization. This process would also result in weaker trade union movement and potentially less social packages. However, Estonian and Latvian reformers (and their congenial Russian counterparts) acted in a different way, saying that &#8220;the destruction of what is unsustainable is not an argument against, but in support of the transformation&#8221;.<em><strong>[7]</strong></em></p>
<p>Despite these facts, the biggest companies in the Baltics states were still those of the Soviet heritage as late as in 1997.</p>
<p>&nbsp;</p>
<p>Table 1.  The Biggest Latvian Industrial Companies (according to the number of employed)[8]</p>
<p>&nbsp;</p>
<table width="471">
<tbody>
<tr>
<td width="163">Company</td>
<td width="188">Industrial Segment</td>
<td width="115">Number of Employees</td>
</tr>
<tr>
<td width="163">
<ol>
<li>Latvijas dzelzceѕls</li>
</ol>
</td>
<td width="188">Railroad</td>
<td width="115">17 792</td>
</tr>
<tr>
<td width="163">
<ol start="2">
<li>Latvijas pasts</li>
</ol>
</td>
<td width="188">Postal service</td>
<td width="115">7493</td>
</tr>
<tr>
<td width="163">
<ol start="3">
<li>Latvenergo</li>
</ol>
</td>
<td width="188">Electric power</td>
<td width="115">7411</td>
</tr>
<tr>
<td width="163">
<ol start="4">
<li>Lattelekom</li>
</ol>
</td>
<td width="188">Telecommunications</td>
<td width="115">5266</td>
</tr>
<tr>
<td width="163">
<ol start="5">
<li>Tramvaju un trolejbusu parv.</li>
</ol>
</td>
<td width="188">Public transport</td>
<td width="115">4081</td>
</tr>
<tr>
<td width="163">
<ol start="6">
<li>Latvijas gaze</li>
</ol>
</td>
<td width="188">Gas (trade)</td>
<td width="115">2914</td>
</tr>
<tr>
<td width="163">
<ol start="7">
<li>Tolaram Fibers</li>
</ol>
</td>
<td width="188">Synthetic fiber production</td>
<td width="115">2870</td>
</tr>
<tr>
<td width="163">
<ol start="8">
<li>Lokomotive</li>
</ol>
</td>
<td width="188">Railroad locomotive maintenance</td>
<td width="115">2689</td>
</tr>
<tr>
<td width="163">
<ol start="9">
<li>Latvijas finieris</li>
</ol>
</td>
<td width="188">Wood processing</td>
<td width="115">2687</td>
</tr>
</tbody>
</table>
<p>&nbsp;</p>
<p>Table 2. The Biggest Lithuanian Industrial Companies (according to the number of employed).</p>
<p>&nbsp;</p>
<table width="474">
<tbody>
<tr>
<td colspan="2" width="136">Company</td>
<td colspan="2" width="213">Industrial Segment</td>
<td width="116">Number of Employees</td>
</tr>
<tr>
<td>
<ol>
<li>Lietuvos gelezinkeliai</li>
</ol>
</td>
<td colspan="2">Railroad</td>
<td style="text-align: center;" colspan="3">16 921</td>
</tr>
<tr>
<td>
<ol start="2">
<li>Lietuvos energija</li>
</ol>
</td>
<td colspan="2">Electric power</td>
<td style="text-align: center;" colspan="3">11 340</td>
</tr>
<tr>
<td>
<ol start="3">
<li>Lietuvos telekomas</li>
</ol>
</td>
<td colspan="2">Telecommunications</td>
<td style="text-align: center;" colspan="3">9913</td>
</tr>
<tr>
<td>
<ol start="4">
<li>Lietuvos pastas</li>
</ol>
</td>
<td colspan="2">Postal service</td>
<td style="text-align: center;" colspan="3">8840</td>
</tr>
<tr>
<td>
<ol start="5">
<li>Ignalinos atomine elektrine</li>
</ol>
</td>
<td colspan="2">Nuclear power plant</td>
<td style="text-align: center;" colspan="3">4918</td>
</tr>
<tr>
<td>
<ol start="6">
<li>Ekranas</li>
</ol>
</td>
<td colspan="2">TV equipment</td>
<td style="text-align: center;" colspan="3">4563</td>
</tr>
<tr>
<td>
<ol start="7">
<li>Lietuvos dujos</li>
</ol>
</td>
<td colspan="2">Gaz (trade)</td>
<td style="text-align: center;" colspan="3">3878</td>
</tr>
<tr>
<td>
<ol start="8">
<li>Mazeikiu nafta</li>
</ol>
</td>
<td colspan="2">Oil refining</td>
<td style="text-align: center;" colspan="3">3434</td>
</tr>
<tr>
<td>
<ol start="9">
<li>Vilniaus prekybos mazmena</li>
</ol>
</td>
<td colspan="2">Commerce</td>
<td style="text-align: center;" colspan="3">2398</td>
</tr>
<tr>
<td>
<ol>
<li>Kuro aparatura</li>
</ol>
</td>
<td colspan="2">Pumps and compressors</td>
<td style="text-align: center;" colspan="3">2397</td>
</tr>
</tbody>
</table>
<p>&nbsp;</p>
<p>Table 3. The Biggest Estonain Industrial Companies (according to the number of employed).</p>
<table width="474">
<tbody>
<tr>
<td width="149">Company</td>
<td colspan="2" width="176">Industrial Segment</td>
<td width="139">Number of Employees</td>
</tr>
<tr>
<td width="149">
<ol>
<li>Eesti Energia</li>
</ol>
</td>
<td width="173">Electric power</td>
<td style="text-align: center;" colspan="3">7500</td>
</tr>
<tr>
<td width="149">
<ol start="2">
<li>Eesti Raudtee</li>
</ol>
</td>
<td width="173">Railroad</td>
<td style="text-align: center;" colspan="3">5510</td>
</tr>
<tr>
<td width="149">
<ol start="3">
<li>Eesti Post</li>
</ol>
</td>
<td width="173">Post service</td>
<td style="text-align: center;" colspan="3">3423</td>
</tr>
<tr>
<td width="149">
<ol start="4">
<li>Eesti Telefon</li>
</ol>
</td>
<td width="173">Telecommunications</td>
<td style="text-align: center;" colspan="3">3272</td>
</tr>
<tr>
<td width="149">
<ol start="5">
<li>Elcoteq Tallinn</li>
</ol>
</td>
<td width="173">Electric lamp production</td>
<td style="text-align: center;" colspan="3">2504</td>
</tr>
<tr>
<td width="149">
<ol start="6">
<li>Estonia Kaevandus</li>
</ol>
</td>
<td width="173">Oil shale extraction</td>
<td style="text-align: center;" colspan="3">1766</td>
</tr>
<tr>
<td width="149">
<ol start="7">
<li>Eesti Merelaevandus*</li>
</ol>
</td>
<td width="173">Maritime navigation</td>
<td style="text-align: center;" colspan="3">1716</td>
</tr>
<tr>
<td width="149">
<ol start="8">
<li>Tarmeko</li>
</ol>
</td>
<td width="173">Furniture production</td>
<td style="text-align: center;" colspan="3">1486</td>
</tr>
<tr>
<td width="149">
<ol start="9">
<li>Tallinna Trammi-ja Trollibussikondis</li>
</ol>
</td>
<td width="173">Public transport</td>
<td style="text-align: center;" colspan="3">1333</td>
</tr>
<tr>
<td width="149">
<ol>
<li>Tallinna Sadam</li>
</ol>
</td>
<td width="173">Stevedoring</td>
<td style="text-align: center;" colspan="3">1295</td>
</tr>
</tbody>
</table>
<p>&nbsp;</p>
<p>The privatization of the Soviet heritage was greatly positive for the Baltic economies, encouraging progressive growth all through the most troublesome period of early 1990s.</p>
<p>At that very time, financial and monetary reforms took place in Estonia, Latvia and Lithuania. A strong and stable national currency safeguards a nation&#8217;s independence and economic stability. In the Baltic nations, deficit-free budget has become the strategic goal one was desperately trying to achieve. This cost the countries a lot, with serious budget limitations introduced especially affecting the social sphere. Borrowing was not even taken to account as a possible solution, until in recent years. By this time, however, the national financial systems have de jure seized to exist. One fact is worth noting in relation to this circumstances: when visiting Vilnius on Jan 14, 2015, Donald Tusk, Chairman of the European Council (Poland’s ex-Prime Minister) called euro adoption in Latvia ‘a historic moment’[9]. No one was curious then, though,  why Mr. Tusk had done his best in his country for this ‘historic moment’ to be avoided there.</p>
<p>The fact is that joining the European Union had a relatively narrow effect on Baltic nations, since these countries already had the right to sell 60- to 65 percent of its commodities on a duty-free basis while being associated partners of the EU. Moreover, since 2001 industrial commodity trade there has been totally duty-free.[10]</p>
<p>Liberalism can be called the second cornerstone of the Estonian economic policy, meaning renunciation of protectionism, free and toll-free trade with neighbors (alcohol, tobacco and some other goods excluded), and relatively low taxes (business tax rate is 26%). This kind of approach encourages saturation of inner market and comparatively low prices, as well as foreign investment and cargo flow growth, which are per capita higher than in Russia. However, this approach creates certain obstacles. Taking into account the protectionist and discriminating fee policy currently maintained by other countries, the inner market stays vulnerable as Estonian-made goods are not competitive enough. This leads to the domination of imported goods, making it harder for its own producers to develop, especially in agriculture.</p>
<p>The third important point is fast, successful reforms in agrarian and  municipal sphere, as well as housing and utilities.</p>
<p>The economic recession during the transformation crisis was deep in the Baltic nations: the economy fell –35% in Estonia, –49% in Lithuania and –52% in Latvia. IEstonia was the first to cope with its consequences in 2001 and reach the pre-crisis level of 1989. The result was its GDP growing 158 percent of this base. Economic progress of Latvia and Lithuania was not that impressive: 115 and 111% respectively.[11]</p>
<p>The comprehension of the complicated development processes and the acknowledgement of initial mistakes in reforming become (though still not frequently) the subject for discussions among the economists in the Baltic counries.[12]Before 2008, such discussions were yet not acceptable in the ‘Baltic tiger’ countries that showed 7 to 9 percent growth each year. There was not much talk of the 12 to 19 percent decrease at the time. Instead, the fact that the country survived the 2008-2009 crisis was treated as a true success story.[13]</p>
<p>&nbsp;</p>
<p>Table 4. GDP Growth, %.</p>
<p>&nbsp;</p>
<table>
<tbody>
<tr>
<td width="101"></td>
<td width="89">2009</td>
<td width="96">2010</td>
<td width="96">2011</td>
<td width="96">2012</td>
</tr>
<tr>
<td width="101">Estonia[14]</td>
<td width="89">- 14,1</td>
<td width="96">3,3</td>
<td width="96">8,3</td>
<td width="96">3,2</td>
</tr>
<tr>
<td width="101">Latvia[15]</td>
<td width="89">- 17,7</td>
<td width="96">- 0,9</td>
<td width="96">5,5</td>
<td width="96">5,6</td>
</tr>
<tr>
<td width="101">Lithuania[16]</td>
<td width="89">-14,5</td>
<td width="96">1,5</td>
<td width="96">5,9</td>
<td width="96">3,6</td>
</tr>
</tbody>
</table>
<p>The Baltic countries’ dependency on Russian oil and gas and energy supply was a serious challenge for Latvia, Lithuania and Estonia, as well as the fact that the three were included in the Soviet-era cargo transportation system in which cargo flows from their sea ports were eastbound. The result was that the Baltic region obtained a predominant status of a  transitional, by-pass cargo hub. Russia is Latvia&#8217;s third largest trade partner, with 10 percent of its trade operations, and Estonia’s fourth biggest trade partner (with 8.4%). Speaking of Lithuania, Russia is number one partner for the country, holding 25% of all trade volume, which is three times higher than with Lithuania’s second biggest partner, Germany (8.4%).[17]However, a shrinking trade volume with Russia has also tended to cause macroeconomic decrease. Unlike in 2013, in 2014 Estonia was the third among the Baltic states as far as GDP growth is concerned. Annual GDP growth was 2.4% in Latvia, 2,9% in Lithuania and 1,8% in Estonia[18]. These figures may look optimistic in present-day Europe, but they will never allow, as people used to say in the USSR, ‘to catch up and overtake’ any other EU country – except for Greece, perhaps.</p>
<p>Expert say that the total exports from the Baltic countries to Russia may fall 18 to 25 percent in 2015, resulting in $780 million deficit for Lithuania, Latvia and Estonia, however, their growth is expected to lose 1.3 to 1.7 percent less that last year. In terms of money, the countries are about to lose $1.58 billion[19]. Isthissum critical? Let’s see: the estimated budget revenue in 2015 is about 7.25 billion euros for Latvia[20], same for Estonia and a little more for Lithuania. Apparently, 250 million euros for each country is big money.</p>
<p>To summarize the above, the economic model that was built in the Baltic countries is economically viable, at least on the mid-term horizon. IF the outer conditions are relatively stable, one can predict a 1.5 to 2.0 GDP growth. In case military and infrastructural expenditures grow, the real income growth will be close to zero. Stagnation of exports and decrease in transit will contribute to destabilization of the economies in the region.</p>
<p>However, the real problem lies elsewhere. The fact that real historical problems of the past are constantly emphasized helps to preserve anti-Russian sentiments on the level of the elite, that tends to capitalize, politically and even financially while encouraging and practicing Russophobic rhetoric. The window of opportunities for co-operation with Russia is constantly shrinking. The Baltic elites preferred to stay away from consistent solution-seeking process and take part in political, rather than economic, discussions. One of the reasons for this (which has never mentioned before, nor will be in the foreseeable future) is that no elite in the Baltics is free to choose its political agenda. In this context, the Baltic countries are quite similar to Belarus rather than Poland or Russia.</p>
<p>There is an opinion that is often heard in the economist community, that European economic development has been derailed. In the past, we knew that politics and economy interact dialectically; nowadays, economy simply becomes a tool for policy to achieve its goals. The golden age of the European economy that lasted from the 1950s till about 2007, has come to an end. European growth will no longer be 3-5 percent, and this situation will take place until the whole political and economic paradigm is changed.</p>
<p>The brilliant success of European integration is obvious. Europeanist ideas that resurrected after WWII have proved to be robust and viable. However, new challenges of 2008-2015 put an end to the  model of development which our European home had. This is true for the Baltic nations which are fully dependent on both European and their own model of development.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>[1] <em>Шадрин А.</em> Экономический фактор политики сепаратизма в республиках Советской Прибалтики // КМЦ Прикладной этнографии Института этнологии и антропологии РАН Москва, 1996.</p>
<p>[2] Агафонов Н.Т, Литовка О.П, Исляев Р.А. Государственная стратегия регионального развития России: смена парадигмы территориальной организации общества СПб 1998 с.39</p>
<p>[3]Misiunas R. Taagepera R. The Baltic States: Year of dependence 1940-1980 L. 1983 р.104</p>
<p>[4] <strong>Гареева Н. Э.,  Шкель С. Н. Теория модернизации и социально-экономические факторы демократизации в контексте политических трансформаций на постсоветском пространстве</strong><strong><br />
</strong><a href="http://gisap.eu/ru/teoriya-modernizatsii-i-sotsialno-ekonomicheskie-faktory-demokratizatsii-v-kontekste-politicheskikh">http://gisap.eu/ru/teoriya-modernizatsii-i-sotsialno-ekonomicheskie-faktory-demokratizatsii-v-kontekste-politicheskikh</a></p>
<p>[5] Межевич Н.М. Геополитическое положение Эстонской ССР: мифы и реальность // Политическая география и современность. Региональные и прикладные аспекты: Л.ЛГУ, 1991</p>
<p>[6] Самонис В. Трансформация литовской экономики: от Москвы к Вильнюсу и от плана</p>
<p>к рынку. Варшава: CASE, 1995; Григорьев, Л.М. Конкуренция и сотрудничество: экономические перспективы Восточной Балтики Москва 2005.</p>
<p>[7] Путь в Европу // Под. общ. ред. И. М. Клямкина и Л. Ф. Шевцовой. М.: Новое издательство. 2008. С. 39.</p>
<p>[8] Берзиньш Ингус Они дают нам работу[8] http://www.baltic-course.com/archive/rus/13/reyting.htm Дата обращения 11.03.2015</p>
<p>&nbsp;</p>
<p>[9] Руководство ЕС приветствовало вступление Литвы в еврозону <a href="http://dw.de/p/1EKhU">http://dw.de/p/1EKhU</a></p>
<p>15.01.2015</p>
<p>[10] Бройсс Ф. Макроэкономические последствия расширения ЕС для его старых и новых членов // Проблемы теории и практики управления. 2003. № 5. С. 29.</p>
<p>[11] Актуальные вопросы мировой экономики: 2010 – 2012. Под общей редакцией Григорьева Л.М., Иващенко А.С. Балтийский форум 2012 с.53</p>
<p>[12]Grigas A., Kasekamp A., Maslauskaite K., Zorgenfreija L., “The Baltic states in the EU: yesterday, today and tomorrow” // Studies &amp; Reports No 98, Notre Europe – Jacques Delors Institute, July 2013.</p>
<p>[13]Dudzińska Kinga  The Baltic States’ Success Story in Combating the Economic Crisis: Consequences for Regional Cooperation within the EU and with Russia // POLICY PAPER</p>
<p>No. 6 (54), POLSKI INSTYTUT SPRAW MIEDZYNARODOWYCH March 2013</p>
<p>[14] RAA012: SISEMAJANDUSE KOGUPRODUKT JA KOGURAHVATULU (KVARTALID) // Eesti Statistika andmebaas. URL: <a href="http://pub.stat.ee/px-web.2001/dialog/varval.asp?ma=RAA012&amp;ti=SISEMAJANDUSE+KOGUPRODUKT+JA+KOGURAHVATULU+%28KVARTALID%29&amp;path=../database/Majandus/15Rahvamajanduse_arvepidamine/06Sisemajanduse_koguprodukt_%28SKP%29/02Pehilised_rahvamajanduse_arvepidamise_naitajad/&amp;search=SISEMAJANDUSE+KOGUPRODUKT+JA+KOGURAHVATULU&amp;lang=2">http://pub.stat.ee/px-web.2001/dialog/varval.asp?ma=RAA012&amp;ti=SISEMAJANDUSE+KOGUPRODUKT+JA+KOGURAHVATULU+%28KVARTALID%29&amp;path=../database/Majandus/15Rahvamajanduse_arvepidamine/06Sisemajanduse_koguprodukt_%28SKP%29/02Pehilised_rahvamajanduse_arvepidamise_naitajad/&amp;search=SISEMAJANDUSE+KOGUPRODUKT+JA+KOGURAHVATULU&amp;lang=2</a>. Дата обновления: 11.03.2013.</p>
<p>[15]Eurostat <a href="http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&amp;plugin=1&amp;language=en&amp;pcode=tec00115">http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&amp;plugin=1&amp;language=en&amp;pcode=tec00115</a></p>
<p>[16] Statistical Yearbook of Lithuania, 2012 <a href="http://web.stat.gov.lt/uploads/metrastis/1_LSM_2012.pdf">http://web.stat.gov.lt/uploads/metrastis/1_LSM_2012.pdf</a></p>
<p>[17] Зельценберг В. Легче застрелиться: страны Балтии подсчитывают убытки от девальвации рубля <a href="http://bb.lv/rinki-i-kompanii/item/9160776-legche-zastrelitsya-strany-baltii-podschityvayut-ubytki-ot-devalvatsii-rublya">http://bb.lv/rinki-i-kompanii/item/9160776-legche-zastrelitsya-strany-baltii-podschityvayut-ubytki-ot-devalvatsii-rublya</a>  22.12.2014</p>
<p>[18] По росту ВВП Эстония заметно отстает от остальных стран Балтии <a href="http://rup.ee/rus/novosti/ekonomika-i-biznes/po-rostu-vvp-estoniia-zametno-otstaet-ot-ostalnykh-stran-baltii">http://rup.ee/rus/novosti/ekonomika-i-biznes/po-rostu-vvp-estoniia-zametno-otstaet-ot-ostalnykh-stran-baltii</a> 27.03.2015</p>
<p>[19] Как российский кризис скажется на экономиках стран Балтии <a href="http://rup.ee/rus/novosti/mirovaia-ekonomika/kak-rossiiskii-krizis-skazhetsia-na-ekonomikakh-stran-baltii">http://rup.ee/rus/novosti/mirovaia-ekonomika/kak-rossiiskii-krizis-skazhetsia-na-ekonomikakh-stran-baltii</a> 25.03.2015</p>
<p>[20] Доходы госбюджета Латвии в 2015 году составят 7,25 млрд. евро <a href="http://www.baltic-course.com/rus/finansi/?doc=99880">http://www.baltic-course.com/rus/finansi/?doc=99880</a> БК, Рига, 09.12.2014.</p>
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		<title>Political dialogue between Russia and the North European countries: influence of economic sanctions</title>
		<link>http://en.abfund.org/?p=1049</link>
		<comments>http://en.abfund.org/?p=1049#comments</comments>
		<pubDate>Wed, 18 Mar 2015 17:09:19 +0000</pubDate>
		<dc:creator><![CDATA[Admin]]></dc:creator>
				<category><![CDATA[Amber Bridge. Journal of Regional Studies]]></category>
		<category><![CDATA[№1 (4) 2015]]></category>
		<category><![CDATA[Cold War]]></category>
		<category><![CDATA[Crimea]]></category>
		<category><![CDATA[Denmark]]></category>
		<category><![CDATA[Eastern Partnership]]></category>
		<category><![CDATA[Finland]]></category>
		<category><![CDATA[Lithuania]]></category>
		<category><![CDATA[Northern Dimension]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Russia]]></category>
		<category><![CDATA[Sweden]]></category>

		<guid isPermaLink="false">http://en.abfund.org/?p=1049</guid>
		<description><![CDATA[Oleg B. Aleksandrov, Associate Professor, Department of international relations and foreign policy of Russia, MGIMO-University, PhD of political sciences. In this article, the author attempts to analyze the impact of economic sanctions on key aspects of the relations between Russia and the North European countries. The main goal of the author is to show different [&#8230;]]]></description>
				<content:encoded><![CDATA[<p><strong>Oleg B. Aleksandrov, Associate Professor, Department of international relations and foreign policy of Russia, MGIMO-University, PhD of political sciences.</strong></p>
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<p><span style="font-style: italic; color: #333333;">In this article, the author attempts to analyze the impact of economic sanctions on key aspects of the relations between Russia and the North European countries. The main goal of the author is to show different approaches of the North European countries to relationship with Russia, to assess political and economic costs of economic sanctions, to show their negative influence on political climate in Europe. The main conclusion of the author is that sanctions have considerably worsened the relations between Russia and the North European states, however there is a potential for their gradual improvement. The research methodology is based upon comparative and analytical approach. </span></p>
<p><span style="color: #cc002b;">Key words: </span><span style="color: #4c4c4c;">“Cold war”, Northern Dimension, Eastern partnership, the annexation of Crimea, “Finlandization”. </span></p>
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<p>The relations of Russia with the North European countries have a special place in European politics. The atmosphere of these relations has evolved over many centuries, when countries traded and fought with each other, concluded dynastic alliances, explored the Northern sea and shared cultural and scientific achievements with each other. These relations were deep and multifaceted. Their bloom came in the days of the Hanseatic League, among whose participants were many Russian cities ― Novgorod, Pskov, Tikhvin, Belozersk, Tot’ma, Torzhok, Tver, Velikyi Ustyug, Revel and others. However, not only trade relations determined the nature of mutual relations between Russia and the North European countries, as marriage of state also played an important role. A significant mark in Russian history was left by Empress Maria Feodorovna, born Danish Princess Marie Sophie Frederikke Dagmara, who became the wife of Emperor Alexander III and mother of the last Russian Emperor Nikolay II.</p>
<p>Perhaps the most serious test of the relationship took place during the Great Northern War, when Peter the Great &#8220;cut the window&#8221; into Europe in spite of Sweden and strengthened the military position of Russia on the Baltic Sea. European capitals were not happy about the strengthening of Russia on the Baltic Sea, but after a while Stockholm and Copenhagen admitted the increasing influence of Russia on world politics. A century after Poltava Victory at the beginning of the XIX century, Russia made an enormous contribution to the development of the Finnish state, including it in its membership and granting the broadest autonomy to the Grand Duchy of Finland. Finally, in the XX century, the Soviet Union made a major contribution to the liberation of Europe from fascism; Soviet troops took part in the liberation of North Norway from Nazi troops.</p>
<p>The present stage of this relationship was marked by the &#8220;cold war&#8221;, when during the confrontation between West and East the policy of restraint and neutrality was used by social democratic governments of Sweden and Finland, what helped to create at that difficult time a climate of trust between the countries, belonging to different military-political blocs. Despite the fact that the level of mutual trust at that time was not always very high, it was fully offset by restraint in military and strategic issues, as well as the desire to preserve regional stability.</p>
<p>As you know, three of five North European countries (Norway, Denmark and Iceland) were fully integrated into the North Atlantic alliance, the first two even worked out plans in case of an armed conflict with the Soviet Union, while Sweden and Finland remained neutral. At the same time Finland had a special place in the relations with the West and the Soviet Union. Its sovereignty was partially limited by a treaty with the Soviet Union in 1948, in which both countries made a commitment &#8220;not to conclude any alliance and not to participate in the coalition directed against another High Contracting Parties&#8221;[1].</p>
<p>The disappearance of the USSR and the victory of Western democracy inspired many people to revise previous models of interaction. In the 1990s, the Finnish model was rejected by the supporters of the Euroatlantic choice and new generation of politicians of the North European countries, representing the right-wing conservatists. At the same time due to a misunderstanding were forgotten unique achievements of this model of relationship. Meanwhile, the historical significance of the model &#8220;Finlandization&#8221; lay in the fact that with the help of it Finland, on one hand, significantly reduced the risk of being involved in a confrontation between East and West, and on the other hand ― it was able to take full advantage of the economic benefits of its geographical location and the Soviet-Finnish border. The model of &#8220;Finlandization&#8221; opened access to capacious Soviet market for the high-quality Finnish goods and helped our northern neighbour to avoid confrontation with Moscow, didn’t allow to draw The Country of Thousands of Lakes in dubious military and political maneuvers that could have escalated into an armed conflict.</p>
<p>Whatever it was, already at a new historical stage in the 1990s and the first half of the 2000s, the basis of these relations contained the idea of maintaining a sub-regional stability, improving the climate of trust and sustainable development. Thus the development meant not only an increase in turnover, but also the creation of democratic institutions, which would bring together the political systems of Russia and the North European countries. The indicator of progress in this direction was the emergence of subregional organizations (CBSS, BEAC), as well as the attempt to create a common space of development, expressed in the concept of &#8220;Northern Dimension&#8221;.</p>
<p>This stage of relations between Russia and the North European countries lead to serious contradictions, which had the ideological character. Russia agreed to adopt Western liberal democratic model for the creation and development of the Russian government institutions and local governments, but strongly disagreed with the fact that the Western liberal ideology would completely replace its national identity, abolish religious standards and force Russia to sacrifice its national interests in the nearest countries. For example, the North European countries really did not understand Russia&#8217;s reaction to the infringement of the rights of Russians in the Baltic States, believing that the imperial period of Russian history should have stayed in the past.</p>
<p>From its side, Russia did not understand a lot in the politics and actions of the North European countries. It was difficult to realise, for example, the reason for increased military budgets of Sweden and Finland against the significant reduction of the Russian military capacity after the collapse of the USSR and the subsequent reductions in the 1990s. It was hard to understand, why the withdrawal of the Soviet troops from the Baltic countries was not accompanied with a normalization of relations with Moscow, but instead led to a serious deterioration of relations in almost all important areas ― political, economic and humanitarian. Russia sincerely hoped that the North European countries, which took care of young democracies in the Baltic States, would be able to convince them of the need to ensure the equal rights of Russian-speaking population, especially since similar rights were provided to all national minorities living in the North European countries. Russia did not understand the need of the entry of the Baltic States into NATO, as well as the upsell of the thesis about the &#8220;Russian threat&#8221; by the leadership of the republics.</p>
<p>Over the past 10-15 years Russia&#8217;s relations with the countries of North Europe continued to develop on its special path, alternating the periods of recovery and recession. Significant milestone of this relationship became the restart of the program &#8220;Northern Dimension&#8221; in 2006. As a result, Russia was proclaimed the main target of this initiative, as originally proposed by the author of the idea of &#8220;Northern Dimension&#8221; &#8211; Finland. The program received a new framework document, identified new joint projects. ND had at its disposal two new partnerships ― in the field of transport and logistics (2008), as well as in the field of culture (2011).</p>
<p>However, two years later relations were spoiled by the events in the Caucasus, where Russia came to the defense of the interests of Abkhazia and South Ossetia, and the Scandinavian countries supported Georgia&#8217;s position. Then Swedish Foreign Minister Carl Bildt compared Russia&#8217;s actions to protect its citizens with the actions of Hitler&#8217;s annexation of the Sudetenland. After 8 years, he also condemned Russia&#8217;s annexation of the Crimea, comparing the policies of the President of Russia with the seizure of Kuwait by Saddam Hussein[2]. The fact that these statements were not a spontaneous and short-term splash of emotions, was confirmed by the events of 2008, when Poland and Sweden became the ideological inspirers of &#8220;Eastern Partnership&#8221;, the purpose of which was the gradual integration of the former Soviet Union in Western institutions. Anti-Russian orientation of the initiative was read between the lines.</p>
<p>In fact, the crisis in the Caucasus in 2008 and the promotion of the &#8220;Eastern Partnership&#8221; exacerbated the competition between Russia and the EU for the political dominance in the former Soviet Union, and a very active role in the EU&#8217;s eastern policy was played by two countries ― Poland and Sweden. From the point of view of Western countries, it looked as a competition between a neo-imperial project, which was supported by Russia as the center of Orthodox Slavic civilization and Western liberal project, aimed at establishing the economic, ideological and informational control over the European CIS countries, as well as the states of Transcaucasus. In this case, the coexistence of &#8220;Northern Dimension&#8221; and &#8220;Eastern Partnership&#8221; did not mean a fundamental difference of opinions between Finland and Sweden.</p>
<p>Preserving a common approach and a common strategy towards Russia, Stockholm and Helsinki disagree on tactics: if the project &#8220;Northern Dimension&#8221; is supported by Finland and is aimed at the gradual democratization of Russia and rapprochement with the West, the project &#8220;Eastern Partnership&#8221;, which is backed by Sweden, in fact recognizes that Russia is unlikely to be part of the Western world in the foreseeable future, and aims to establish control over the newly independent states established on the ruins of the Soviet Union.</p>
<p>Political upheaval and civil war in the Ukraine in this sense are not the starting point of the crisis in relations between Russia and the North European countries, but is a new stage of ideological confrontation, which was indicated in the middle of the 2000s. The aforementioned Swedish politician does not hide it as well. According to Carl Bildt, Russia in the 1990s demonstrated commitment to Western values, but with the coming of Vladimir Putin to power Moscow faced tough opposition to the Western policy. Former Minister of Foreign Affairs of Sweden believes that the contradiction between Russia and the West is of a fundamental ideological character: &#8220;The new anti-Western and antidecadent line of Putin is built on deeply conservative orthodox ideas»[3].</p>
<p>It must be noted that the offensive Western policy towards Russia, combined with tough rhetoric of certain Western politicians have almost fully revived the political atmosphere of the &#8220;cold war&#8221;, and the media of the West has begun to carefully sculpt an &#8220;enemy image&#8221; from Russia. How long will the new &#8220;cold war&#8221; be, and how long will be the economic sanctions against Russia? This raises the third question: what is the position of countries on this issue? In particular, what do leaders and leading politicians of the North European countries think about it?</p>
<p>Many years of mutually beneficial cooperation have taught many to conclude that the North of Europe is quite a well-off region and Russia&#8217;s relations with the countries of the region seem to be promising and mutually beneficial. And, in fact, there were no open conflicts in the North of Europe with the participation of Russia, except for those systematic violations of the rights of Russians living in the Baltic states, and they mostly boil down to two main problems: failure of Latvia and Estonia to grant citizenship to all residents, who were born there and lived at the time of the declaration of independence of these countries, as well as the denial of the right of these people, and especially ― their children ― to receive education in their native language. In 2010, Russian initiative was to settle the dispute between Russia and Norway regarding the section of the Barents Sea between two countries. Thus, all potential conflicts in the region have been minimized.</p>
<p>However, it did not prevent the Norwegian oil company Statoil from withdrawing from the joint project of developing the Arctic shelf with Russia; Norway declared that its sanctions and EU sanctions against Russia wouls be cancelled only when Russia changed its policy in Ukraine. Explaining the position of the state, Norwegian Foreign Minister Børge Brende recalled that the sanctions against Moscow were introduced after the annexation of the Crimea, as well as other &#8220;violations of the international law in the eastern regions of Ukraine[4].</p>
<p>It should be noted that Norway not being a member of the EU, was free on the question of participation in the sanctions, as well as on the issue of the degree of its rigidity and duration. For example, Turkey, which, together with Norway being a member of the North Atlantic Alliance, decided not to join the sanctions at all, because it saw it as a threat to its national interests in the Black Sea region.</p>
<p>The fact that Norway did not simply join the sanctions, but chose their toughest variant, signifies either a serious crisis in bilateral relations, or that the foreign policy of Norway on the question of sanctions is completely subordinated to politics of Washington or Brussels. This situation has opened another unpleasant situation for Russia&#8217;s foreign policy: the signing of a bilateral agreement between Moscow and Oslo on the delimitation of the disputed waters of the Barents Sea in 2010 and reciprocal steps by President Medvedev had absolutely no effect on improving the climate of bilateral relations. Nevertheless, even in Norway one can hear louder voices of opposition to the current position of the country with regard to Russia. Thus, ex-Minister of Foreign Affairs Jonas Gahr Støre recalled &#8220;the millennial experience of a peaceful neighborhood&#8221; with Russia.[5].</p>
<p>Thus, the events of the Ukrainian crisis has shown that the most irreconcilable and active critics of Russia&#8217;s actions are the North European countries, namely Sweden, Norway and Denmark. Acuity of their position is not inferior to the positions of the United States and Canada, and on the degree of hardness it’s stronger that one of France and Germany. On the contrary, Finland and Iceland at the outset showed much more balanced position, based on considerations of economic pragmatism dominated the political arguments.</p>
<p>Finland&#8217;s position from the beginning tended to a compromise, and Prime Minister Alexander Stubb has repeatedly spoken out against imposal, extension and tightening of the sanctions, as the importance of Russia for the Finnish economy is too huge[6]. It can be explained by the fact that among all North European countries, Finland faces the greatest losses from the sanctions regime, as well as the impact from Moscow responses, which imposed a total ban on exports of beef, pork, vegetables and fruit, meat, poultry, fish, cheese, milk and dairy products to Russia.</p>
<p>Denmark and the Danish Board of Agriculture and the Economy also warned on the serious impact of Russian counter-sanctions on its economy. According to the National Institute of Statistics of Denmark, exports to Russia in 2013 amounted to 2.14 billion USD, of which 891 million USD accounted for agricultural exports. At the same time, the share of Russia in the exports of Denmark does not exceed 1.9%, which allows the country&#8217;s leaders to insist on the continuation of anti-Russian sanctions. This, in particular, was declared by Prime Minister Helle Thorning-Schmidt[7].</p>
<p>According to the polls carried out in March 2014 by Taloustutkimus, the majority of Finnish society (60%) is foreign to anti-Russian sentiment, and Russia is not perceived as a threat. Finnish President Sauli Niinistë agrees with the opinion of the Finnish society: &#8220;We are neighbours. Unlike other neighbours of Russia, we are not members of NATO. Our relations with Russia are based on bilateral contacts&#8221;[8]. The position of Finland is not opportunistic, but consistent and is based on the mood of the majority of Finnish society, which has been recently shown by the events, when the Finnish leadership voted against the supply of arms of Kiev authorities<sup><sup>[9]</sup></sup>.</p>
<p>Against the balanced and moderate position of Finland Sweden is continuing to demonstrate hardness against Moscow. Swedish Foreign Minister Margot Wallström said that Russia poses a serious threat to the security of Europe, however, along with the pressure on Russia one should continue political dialogue as well[10]. The announcement of Ambassador of Sweden in Russia Veronika Bard Bringus was in similar mode, when she did not exclude the possibility of exit of Swedish companies from the Russian market[11]. The main argument of the Ambassador was the situation with the Swedish concern <em>Oriflame</em>, which was accused by Russian tax authorities of deliberately understating the company&#8217;s revenues for the reduction of tax payments to the Russian budget. After losing the lawsuit in the Russian arbitration court, the company announced its intention to appeal to the international investment arbitration.</p>
<p>It should be noted that the current crisis in Russian-Swedish relations is not accidential. Stockholm has long been regarded Russia as a threat to its security, and therefore critically perceives any Russian actions of political or economic nature, aimed at strengthening the security of Russia in the Baltic Sea, whether it’s laying of the pipeline &#8220;Nord Stream&#8221; or the development of the military infrastructure of the Baltiysk and Kronstadt.</p>
<p>The story of unsuccessful search for &#8220;Russian submarine&#8221; in Swedish territorial waters in October 2014 recalled a similar story from &#8220;cold war&#8221;, when in 1981, a Soviet damaged submarine was discovered close to the Swedish naval base at Karlskrona. Stockholm reacted to Russia&#8217;s actions to ensure security of Abkhazia and South Osetia with obvious disapproval, accusing Moscow of violating the territorial integrity of Georgia. A similar position was taken by the Swedish Ministry of Foreign Affairs in Crimean issue.</p>
<p>Playing the &#8220;Russian card&#8221; and the spread of the thesis of the &#8220;Russian threat&#8221; was the brand style for a number of leading Baltic politicians. The toughest position on the Russian question among the Baltic States has traditionally been shown by President of Lithuania Dalia Grybauskaite. In her opinion, three Baltic countries faced &#8220;Russian threat&#8221; and they should be ready to respond to it during three days at least, until they get assistance from NATO members[12]. However, a different position was shown by Latvian President Andris Berzins, who does not support the imposal of sanctions and calls for their soonest cancellation. His views are shared by Foreign Minister of Latvia Edgar Rinkevich and Ventspils Mayor Aivars Lembergs.</p>
<p>Some political consequences of the deterioration of relations of North European and Baltic countries with Russia within the framework of the Ukrainian crisis followed shortly. In particular, it was reflected with newly resumed talks on accession of Sweden and Finland into NATO, the North European countries and the Baltic States published their plans to deepen cooperation in defense and security. So, the ongoing projects within the North European defense cooperation (Nordic Defence Cooperation ― NORDEFCO) were joined by the Baltic States ― Latvia, Lithuania and Estonia[13].</p>
<p>Minister of Foreign Affairs of Sweden, Margot Wallström was the initiator and inspirer of the plan; she declared that military cooperation between the North European countries and the Baltic countries would decrease defense expenses and improve cooperation on border security. Russia replied immediately by performing tactical flight exercises in the Barents Sea, which were attended by the crews of fighter-interceptor MiG-31 and tactical bomber Sukhoi Su-24M of Central Military District[14].</p>
<p>Thus, Russia&#8217;s relations with the countries of Northern Europe are developing in an unfavorable scenario; however, there is still some potential for a gradual improvement in case of easing policy by the majority of the North European countries in respect of Russia. In this situation, the most pressing question is what position will prevail: the policy of deepening confrontation or a pragmatic and balanced policy aimed at overcoming the sanctions crisis. It seems no one can state the way of further development of relations between Russia and the North European countries, as Brussels and Washington both have a strong impact on the foreign policy of the North European countries. We can only hope for traditional Scandinavian sanity, willingness of all parties to move towards each other and take into account the legitimate interests of Russia.</p>
<p>The list of bibliography:</p>
<p>1.         Dogovor o druzhbe, sotrudnichestve i vzaimnoy pomoshi mezhdu Sojuzom Sovetskikh Socialisticheskikh Respublik i Finljandskoy Respublikoy. URL: http://www.heninen.net/sopimus/1948_e.htm</p>
<p>2.         V Danii opasajutsja posledstviy rossijskikh sankciy URL: http://russian.rt.com/article/44314</p>
<p>3.         Karl Bil&#8217;dt. Putin povel sebja kak Saddam URL: http://www.bbc.co.uk/russian/multimedia/2014/07/140708_v_bildt_hard_talk_int</p>
<p>4.         Litva pugaet Pribaltiku «rossiyskoy ugrozoj». URL: http://www.stoletie.ru/lenta/litva_pugajet_pribaltiku_rossijskoj_ugrozoj_423.htm</p>
<p>5.         MID Norvegii: tol&#8217;ko izmenenie politiki RF v otnoshenyi Ukrainy privedet k snjatiu sankciy. URL: http://versii.com/news/320114/</p>
<p>6.         Nad Barencevym morem proleteli 40 istrebiteley URL: http://www.stoletie.ru/lenta/nad_barencevym_morem_proleteli_40_istrebitelej_555.htm</p>
<p>7.         Norvegiya dolzhna prodolzhat&#8217; politiku dobrososedstva s RF. URL: http://www.norge.ru/news/2015/02/14/26538.html</p>
<p>8.         Nosovich, Aleksandr. Baltijskiy kontrast: Finljandiya otkazalas&#8217; otvorachivat&#8217;sa ot Rossyi. URL: http://www.rubaltic.ru/article/politika-i-obshchestvo/baltiyskiy-kontrast-finlyandiya-otkazalas-otvorachivatsya-ot-rossii/</p>
<p>9.         Posol Shvecyi: v RF sozdajutsja prepjatstviya dlja raboty shvedskihk companiy URL: http://1prime.ru/state_regulation/20150306/804132680.html</p>
<p>10.       Pravoslavie ― glavnaya ugroza dlya Zapadnoy civilizacii: mnenya. URL: http://www.iarex.ru/interviews/47573.html</p>
<p>11.       Prem&#8217;er Finljandiyi: Ukraine ne nuzhna voennay pomoshh&#8217; URL: http://vz.ru/news/2015/2/4/727740.html</p>
<p>12.       Strany Severnoy Evropy I Baltiki dogovorilis&#8217; ukrepit&#8217; voennye svjazi. URL: http://vzgliad.ru/news/2014/11/30/717796.html</p>
<p>13.       Shadrina, Tat&#8217;jana. Finljandijaotkazalas&#8217; otsankcij k Rossii URL: http://www.rg.ru/2014/08/14/finlyandiya-site.html.</p>
<p>14.       Wallström, Margot. Rysslandettallvarligt hot mot Europasfred. // SvenskaDagbladet, 6 mars. URL: http://www.svd.se/opinion/brannpunkt/ryssland-ett-allvarligt-hot-mot-europas-fred_4388101.svd</p>
<p>&nbsp;</p>
<p>[1] Договор о дружбе, сотрудничестве и взаимной помощи между Союзом Советских Социалистических Республик и Финляндской Республикой / <a href="http://en.wikipedia.org/wiki/Finno-Soviet_Treaty_of_1948">Agreement of Friendship, Cooperation, and Mutual Assistance</a> with the Soviet Union. URL: http://www.heninen.net/sopimus/1948_e.htm</p>
<p>[2] http://www.bbc.co.uk/russian/multimedia/2014/07/140708_v_bildt_hard_talk_int</p>
<p>[3] Православие – главная угроза для Западной цивилизации: мнения. / Orthodoxy is main threat to Western civilization . opinions / URL: http://www.iarex.ru/interviews/47573.html</p>
<p>[4]МИД Норвегии: только изменение политики РФ в отношении Украины приведет к снятию санкций. URL: <a href="http://versii.com/news/320114/">http://versii.com/news/320114/</a> / MFA Norway: only changes of Russia’s policy in respect of Ukraine will lead to cancellation of sanctions</p>
<p>[5] Норвегия должна продолжать политику добрососедства с РФ. URL<sup>: </sup><a href="http://www.norge.ru/news/2015/02/14/26538.html">http://www.norge.ru/news/2015/02/14/26538.html</a>. / Norway must continue policy of neighbourliness with Russia.</p>
<p>[6]http://www.rg.ru/2014/08/14/finlyandiya-site.html</p>
<p>[7]<a href="http://russian.rt.com/article/44314">http://russian.rt.com/article/44314</a></p>
<p>[8] Носович, Александр. Балтийский контраст: Финляндия отказалась отворачиваться от России. URL: <a href="http://www.rubaltic.ru/article/politika-i-obshchestvo/baltiyskiy-kontrast-finlyandiya-otkazalas-otvorachivatsya-ot-rossii/">http://www.rubaltic.ru/article/politika-i-obshchestvo/baltiyskiy-kontrast-finlyandiya-otkazalas-otvorachivatsya-ot-rossii/</a> / Nosovich Alexander. Baltic contrast: Finland refused to turn back from Russia</p>
<p>[9]Премьер Финляндии: Украине не нужна военная помощь URL: <a href="http://vz.ru/news/2015/2/4/727740.html%20/">http://vz.ru/news/2015/2/4/727740.html /</a> PM of Finland: Ukraine does not need military aid</p>
<p>[10]Wallström, Margot. Rysslandettallvarligt hot mot Europasfred. // SvenskaDagbladet, 6 mars URL:http://www.svd.se/opinion/brannpunkt/ryssland-ett-allvarligt-hot-mot-europas-fred_4388101.svd</p>
<p>[11]Посол Швеции: в РФ создаются препятствия для работы шведских компаний <a href="URL:http://1prime.ru/state_regulation/20150306/804132680.html%20/">URL:http://1prime.ru/state_regulation/20150306/804132680.html /</a> Ambassador of Sweden: Russia imposes difficulties for activity of Swedish companies</p>
<p>[12] Литва пугает Прибалтику «российской угрозой». URL: <a href="http://www.stoletie.ru/lenta/litva_pugajet_pribaltiku_rossijskoj_ugrozoj_423.htm%20/">http://www.stoletie.ru/lenta/litva_pugajet_pribaltiku_rossijskoj_ugrozoj_423.htm /</a> Lithuania threatens Baltics by “Russian threat”</p>
<p>[13]Страны Северной Европы и Балтики договорились укрепить военные связи. <a href="URL:http://vzgliad.ru/news/2014/11/30/717796.html%20/">URL:http://vzgliad.ru/news/2014/11/30/717796.html /</a> The North European countries and Baltics agreed on strengthening military cooperation</p>
<p>&nbsp;</p>
<p>[14]URL:<a href="http://www.stoletie.ru/lenta/nad_barencevym_morem_proleteli_40_istrebitelej_555.htm">http://www.stoletie.ru/lenta/nad_barencevym_morem_proleteli_40_istrebitelej_555.htm</a></p>
<p>&nbsp;</p>
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		<title>Baltic partnership: bridges become more endurable</title>
		<link>http://en.abfund.org/?p=10</link>
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		<pubDate>Wed, 28 Jan 2015 15:50:38 +0000</pubDate>
		<dc:creator><![CDATA[Admin]]></dc:creator>
				<category><![CDATA[№1 (9) 2013]]></category>
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		<category><![CDATA[Lithuania]]></category>
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		<description><![CDATA[This time I would like to begin with an announcement: on April 5-6 St. Petersburg will host a conference on environmental protection of the Baltic Sea. It is a remarkable event through which Russia as rotating president in the Council of the Baltic Sea States (CBSS) attracts international public attention to a complex of environmental [&#8230;]]]></description>
				<content:encoded><![CDATA[<p>This time I would like to begin with an announcement: on April 5-6 St. Petersburg will host a conference on environmental protection of the Baltic Sea. It is a remarkable event through which Russia as rotating president in the Council of the Baltic Sea States (CBSS) attracts international public attention to a complex of environmental problems in the region. Russia took over the presidency in the summer of 2012.</p>
<p>At present the mechanism of the CBSS which unites eleven countries of the region and the European Commission operates better than a Swiss watch. It is well-oiled and partners are quick on the uptake in most issues. Russian Foreign Minister Sergei Lavrov provided most exact description of the understanding in an exclusive interview with the Amber Bridge. He said in 20 years of activities the Council of the Baltic Sea States fully justified its initial idea, developed into a full-fledge cooperation forum, and demonstrated an ability to upgrade.</p>
<p>It is easy to understand why environment is on the agenda. The problem is a kind of a wellbeing camertone and is vital for all Baltic littoral countries. Statistics cause concern of most people in the unique region who attentively follow the situation in the sea. The last world war dumped a lot of &#8220;surprises&#8221; in the Baltic Sea which threaten it with major environmental catastrophes. The talk is about hundreds of thousands of tons of shells and mines buried on the seabed, but periodically washed ashore. There are also bombs with toxic agents. If their hulls are destroyed they can kill fauna and flora on a major scale.</p>
<p>Scientists have already discovered mutant fish in the Baltic Sea and explain the growing numbers by a possible leak in shells with toxic agents. Experts said the problem was discussed rather than handled for a long time. Complex joint effort was taken during the construction of the Russian-German Nord Stream underwater gas pipeline. Russia and other countries possess technologies that can efficiently defuse the deadly cargo on the Baltic seabed.</p>
<p>Now back to the April conference in St. Petersburg. There is no doubt it will be a landmark in the laborious but urgent joint work of scientists and scholars of Northern Europe. If we turn back several pages of the latest history we shall see that when the CBSS was founded in 1992 few people believed the institution was viable. If Germany, Denmark, Norway, Finland and other western countries initially treated Russia as an equal and valuable partner, some neighbors in the east of Europe continued to display increased caution towards it.</p>
<p>But time always puts everything in place. &#8220;Seabed sediments&#8221; were gradually washed out of politics while the work of the CBSS becomes more substantial and productive with years. The substantive portfolio of vital solutions for the region is constantly augmented. Joint efforts of regional leaders promote efficient cooperation in economy, science, environment, healthcare, culture, and in the fight against organized crime&#8230;</p>
<p>I lived in Lithuania for thirty years and worked as a correspondent of a central newspaper. I still have many Lithuanian friends there. They often visit me in Moscow and I often go to Vilnius. They love their country and are upset by mistakes in the home and foreign policy while I feel all developments in Russia with my heart. It is only logical as each of us is a patriot of his country. But we are also patriots of our unique region. The world is a tiny place while the Baltic Sea coast is a small golden dune on its surface.</p>
<p>Naturally, partnership among Baltic Sea countries presupposes a broader cooperation level and integration in resolving common regional problems. That is taking place. The flow of time convinces us there is no alternative to partnership. All CBSS members are sure of it.</p>
<p>&nbsp;</p>
<p>Alexey Morgun,</p>
<p>Editor-in-Chief, Amber Bridge</p>
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		<title>Cooperation has no alternative</title>
		<link>http://en.abfund.org/?p=23</link>
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		<pubDate>Wed, 28 Jan 2015 15:45:15 +0000</pubDate>
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				<category><![CDATA[№1 (9) 2013]]></category>
		<category><![CDATA[Lithuania]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Russia]]></category>

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		<description><![CDATA[Exclusive interview with Lithuanian prime minister ALGIRDAS BUTKEVICIUS Lithuanian Prime Minister Algirdas Butkevicius (sixteenth head of government in 21 years of national independence) has been for long overshadowed by such bright Social-Democratic leaders as Brazauskas, Kirkilas, and Jursenas. Observers believe the convincing victory of Social-Democrats under Butkevicius leadership to the Saeima last autumn was predetermined [&#8230;]]]></description>
				<content:encoded><![CDATA[<p><strong>Exclusive interview with Lithuanian prime minister</strong><strong> ALGIRDAS BUTKEVICIUS</strong></p>
<p>Lithuanian Prime Minister Algirdas Butkevicius (sixteenth head of government in 21 years of national independence) has been for long overshadowed by such bright Social-Democratic leaders as Brazauskas, Kirkilas, and Jursenas. Observers believe the convincing victory of Social-Democrats under Butkevicius leadership to the Saeima last autumn was predetermined by the election program of the party rather than by the charisma of its leader.</p>
<p>The Social-Democrats listed energy reform, the fight against unemployment and mass emigration, and elimination of the gap between the rich and the poor as their home policy priorities. The first decision of the new government fulfilled its election promise and raised the minimum wage to 1000 lits (close to 300 euro). It pledged to better consult society on all key issues and promote public consensus.</p>
<p>Butkevicius numerously said that when the taskforce discussing energy sector reform (with a new nuclear power plant or without it) provides conclusions they will be definitely submitted for public discussion. There will no longer be non-transparent decisions characteristic of the Conservative government.</p>
<p>In a brief time as the prime minister Butkevicius approved himself as an experienced and prudent politician. So far he succeeded to reconcile contradictions in the ruling coalition and softly but resolutely resist the attempts of President Dalia Grybauskaite to push her decisions through.</p>
<p>Lithuanian voters were attracted by election promises of the current government which offered a &#8220;reset&#8221; in relations with Russia. The prime minister numerously said Lithuania will promote mutual trust and build up cooperation based on future rather than the past. Opposition claims that new authorities turn their back on the West and betray their main strategic partner, the United States, by looking at the East were rebuked by Butkevicius who said the country should not turn its back either on Russia or the USA. We asked the head of government how Lithuania plans to build up relations with neighbors.</p>
<p>Mr. Butkevicius, The government program envisages and you also numerously stressed the necessity to &#8220;reset&#8221; relations with Russia. What should politicians do to thaw bilateral relations with neighbor s?</p>
<p>First of all, I have to say it bluntly that I am a supporter of constructive dialogue. I hope for the same position of the Russian side. I stand for enhanced mutually beneficial cooperation with Russia, specifically in economic relations. Trade turnover between our countries is big at present, but it should continue to grow. Favorable business conditions and the initiative of entrepreneurs from both sides are necessary for that.</p>
<p>The comprehensive agreements between the European Union and Russia which are being designed at present have to give a new impetus to bilateral cooperation. Political, economic, and cultural relations between the two countries shall be based on mutual respect and understanding.</p>
<p>Lithuanian relations with Poland and Latvia have not been smooth of late. You have already paid official visits to the countries. Have you agreed with the Latvians on energy issues (construction of a nuclear power plant and a liquefied gas terminal) and with the Poles on problems r elated to national minorities?</p>
<p>Relations between Lithuania and neighboring Latvia and Poland are very close and productive. There are numerous big and strategic projects in trade and investments which confirm it. We are united by the commitments in the framework of the European Union and NATO and we jointly fulfill them. We are members of one family. Naturally, there may be different opinions on various issues, but we always listen to the arguments of the other party. I was convinced in it again during my first</p>
<p>foreign trips to Riga, Tallinn, and Warsaw. Together with the prime ministers of Estonia and Latvia we reiterated our resolute intention to develop cooperation of the Baltic troika and more intensively promote the Baltic trademark which has already been recognized in the world.</p>
<p>We are united by common interests in the energy sphere, including energy independence and efficiency and the common internal market in the EU context. Latvia and Estonia continue to declare their interest in the construction of the Vysaginas nuclear power plant. They are currently waiting for Lithuania to complete the feasibility study of the project.</p>
<p>Polish Prime Minister Donald Tusk said relations between Lithuania and Poland are good. Poland would be glad to maintain such relations with other countries, but they should be the best with Lithuania. We shall join effort to achieve them. The position was confirmed by Polish President Bronislaw Komorowski who visited Vilnius on February 16 to celebrate the day of Lithuanian Independence together with us. Our concrete projects have shaped out already: the agreement has been signed to build LitPolLink energy bridge and we shall jointly apply to the European Commission for financing the gas bridge between Lithuania and Poland. Both countries will unite efforts in the implementation of the Eastern Partnership program of the European Union.</p>
<p>As for national minorities, the problems should be resolved by each country at home. They are resolvable. We have nothing to conceal from close neighbors and we shall not reject fruitful experience and advice.</p>
<p>Will there be a similar meeting with Russian Prime Minister Dmitry Medvedev in the near future? Which steps are being made to implement your idea of closer cooperation at the diplomatic level?</p>
<p>I accepted the invitation of Russian Prime Minister Dmitry Medvedev to participate in the conference of heads of government of the Baltic Sea countries which is to be held in St. Petersburg this spring (in the framework of the Russian presidency in the CBSS &#8211; ed.). It will be my first meeting with the chairman of the Russian government. No doubt one meeting and one talk are not enough. We have to expand opportunities for consistent and fruitful cooperation.</p>
<p>R e p r e s e n t a &#8211; tives of the rightwing forces, mostly Conservatives, blame authorities for readiness &#8220;to cede to Moscow&#8221; in exchange for cheap gas. What would you say?</p>
<p>In a democratic society there is usually a healthy tension between the government and the opposition and discussions are underway on all issues. It is important not to lose the guideline of national interests. I would like also to stress that my government will work for solutions that are beneficial for all residents of Lithuania, but not at the expense of energy or national security. Our priorities include the drive towards increased energy independence through implementation of the provisions of the Third Energy Package of the EU (which contains proposals to liberalize the energy market, calls to unbundle vertically integrated energy companies, and regulates ownership and use of gas pipelines by handing over transportation networks to independent operators &#8211; ed.), construction of a liquefied gas terminal, increased energy efficiency due to active renovation of multi-apartment houses, as well as development of renewable energy. We shall also look for solutions that allow to decrease gas prices and consequently heating tariffs for ordinary consumers.</p>
<p>Don&#8217;t you fear bitter criticism from the rightists if the government works for rapprochement with Russia?</p>
<p>Russia is our neighbor which maintains with Lithuania not only close energy ties and historic experience, but also has a common European agenda. No party and no group of people enjoy a monopoly in relations with Russia or any other country. Lithuania is a democratic country and a member of the European Union. Decisions are adopted publicly and transparently and take into account public interest and long-tem national development prospects. I do not doubt there is a place for Russia in the strategy: friendly, economically strong, and democratic state.</p>
<p>Radicals accuse new authorities of &#8220;betraying national interests&#8221;. What would you say about it?</p>
<p>I have not heard such accusations and have nothing to comment.</p>
<p>According to official statements, the current main task of Lithuania is to win energy independence from Gazprom. Is it possible in the current situation and what did you mean by expressing hope that Gazprom would behave &#8220;like a gentleman&#8221;?</p>
<p>The national energy independence means, inter alia, the right to choose energy suppliers. There is no such possibility in the gas sector at present but it will emerge after the implementation of Third Energy Package which stipulates liberalization of the market. Gazprom will have to take into account the laws of the European Union and Lithuania and restructure the Lietuvos dujos gas distribution company which it partially owns. I hope Gazprom will behave &#8220;like a gentleman&#8221; and will carry out the necessary changes in cooperation with the government of Lithuania. Practical work to ensure energy independence is already underway. In 2014 the construction of a liquefied gas terminal in Klaipeda will be completed. It will allow gas supplies from any country of the world. It will definitely influence the pricing policy of traditional gas suppliers in favor of Lithuanian consumers.</p>
<p>Does Gazprom advance any demands which are unacceptable for Lithuania?</p>
<p>Constructive talks are currently underway however the Lithuanian position at the negotiations is clear enough: the implementation of the Third Energy Package and decreased prices for ordinary consumers.The citizens of the country opposed the construction of a new NPP at a consultative referendum. You used to be also against the agreement signed with Hitachi. Did you change your mind?</p>
<p>The new government will avoid unbalanced and hasty decisions on the Vysaginas nuclear power plant. It is clear today the plant can go on only as a regional project and we shall take all effort to make it regional in reality. I have instructed to create a taskforce to discuss the issue which is to submit its proposals in late spring.</p>
<p>The agreement with Hitachi was signed in complete secrecy. Will you stand up to the commitment and inform the public which way Lithuania should go in the sphere of energy?</p>
<p>As soon as the abovementioned taskforce provides proposals the Saeima and the public will be immediately informed.</p>
<p>The Lithuanian shale gas prospecting and production project causes many public claims as well. It turned out the agreement with the American Chevron has already been signed. What can you say about it?</p>
<p>Shale gas prospecting and production is one of the guidelines for energy security in the region. The contract with the company envisages only prospecting. The public will be informed about the progress and results of prospecting for shale gas.</p>
<p>Despite reserved official relations between Lithuania and Belarus, Lithuania and Russia businessmen and ordinary people actively cooperate. How can we simplify people-to-people contacts? What is the progress in visa-free regime in border areas?</p>
<p>As for the visa-free regime, Lithuania has invested a lot into upgraded infrastructure of Lithuanian-Russian and Lithuanian- Belarussian checkpoints and border zone. We informed Belarus about our readiness to implement the agreement reached by the governments of the Republic of Lithuania and the Republic of Belarus on border-crossing trips by residents of border areas of Lithuania and Belarus. We are waiting for a confirmation from Minsk that it is also ready to implement the agreement.</p>
<p>Some people in Lithuania are dissatisfied with the fact that Russian actors come to perform in the country, Russian movies are shown on TV and in cinema halls.</p>
<p>They view it as expansionist policy of the neighboring country. What do you think about it?</p>
<p>I believe no borders exist for the arts and the tours of Russian performers in Lithuania can be only welcomed. Genuine art always finds its listeners and viewers without any advice from authorities. I would like to hope that Lithuanian actors will also find their admirers on the immense space of Russia.</p>
<p><strong>Algirdas Butkevicius was born in 1958 in the village of Paezeriai in Padviliskis district. He graduated as engineer-economist from the Vilnius Engineering and Construction Institute, studied in the Lithuanian Governance Academy and underwent traineeship in the United States. He joined the Social-Democratic Party in 1992 and was elected its chair in 2009. From 2004 to 2008 he was finance minister and then transport and communications minister in the Social-Democratic government of Algirdas Brazauskas and then Gediminas Kirkilas.</strong></p>
<p><strong>In the 2012 parliamentary election the Social-Democrats headed by Butkevicius </strong><strong>received most of the votes. They created a coalition with the Labor Party, the Order and Justice, and the Electoral Action of Poles in Lithuania to form the constitutional majority in parliament and a coalition government. In November the Saeima approved Butkevicius as the Lithuanian prime minister. Lithuanian residents hope the new government will improve the economic situation in the country, as well as good-neighborly relations with Russia. Public opinion polls show Butkevicius is ahead of Lithuanian President Dalia Grybauskaite in popularity ratings.</strong></p>
<p>&nbsp;</p>
<p>Thank you for the interview .</p>
<p>Galina Afanasyeva,</p>
<p>for Amber Bridge</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
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		<title>A Long And Winding Road: A specific way of each Baltic country to the Eurozone</title>
		<link>http://en.abfund.org/?p=1111</link>
		<comments>http://en.abfund.org/?p=1111#comments</comments>
		<pubDate>Wed, 24 Dec 2014 18:05:15 +0000</pubDate>
		<dc:creator><![CDATA[Admin]]></dc:creator>
				<category><![CDATA[Amber Bridge. Journal of Regional Studies]]></category>
		<category><![CDATA[№3 (3) 2014]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Estonia]]></category>
		<category><![CDATA[Euro]]></category>
		<category><![CDATA[Latvia]]></category>
		<category><![CDATA[Lithuania]]></category>

		<guid isPermaLink="false">http://en.abfund.org/?p=1111</guid>
		<description><![CDATA[Olenchenko Vladimir Anatolievich, PhD in law, senior researcher, the Center for European Research of the Institute of World Economy and International Relations, of the Russian Academy of Science. Currently the topic of euro is unquestionably among the most relevant in Europe and all over the world. It is of interest to politicians and businessmen, economists [&#8230;]]]></description>
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<p><strong><span style="color: #4c4c4c;">Olenchenko Vladimir Anatolievich, </span><span style="color: #4c4c4c;">PhD in law, senior researcher, the Center for European Research of the Institute of World Economy and International Relations, of the Russian Academy of Science.</span></strong></p>
<p><em>Currently the topic of euro is unquestionably among the most relevant in Europe and all over the world. It is of interest to politicians and businessmen, economists and citizens. The article is aimed at the analysis of the causes and motives of the desire of the Baltic republics to substitute national currencies with euro. This study may help understanding, why small European countries tend more than others to the introduction of the euro. The research was based on the method of comparing various factors, affecting the state of the Baltic economies, with the expectation to identify those, that are of key importance. The research investigated the circumstances and the mechanism of the Baltic republics joining the euro zone. The study showed, that the desire of the Baltic States to join the euro zone is caused by domestic and foreign economic circumstances. The Baltic leaders wanted to strengthen their authority among the local population and at the same time to promote maximum integration of the Baltics. Simultaneously foreign capital operating in the Baltics and pursuing its goals, dictates when and in what sequence to adopt the euro in the Baltics. In general, it is obvious that the North European capital is the main lever of the Baltic economies and its interests, in particular, introduction of the euro in the Baltic States.</em></p>
<p>&nbsp;</p>
<p><strong>Introduction</strong></p>
<p>2014 was the 10<sup>th</sup> anniversary of the membership of the Baltic countries in the European Union. The date was not widely celebrated neither in the EU, nor at the national level, as the results of the Baltic decades could not be called successful. De-industrialization, mass labour emigration, high unemployment, weak investment appeal, unclear economic outlook &#8211; here are the Baltic economies today, compared with initial conditions for EU accession. Nevertheless, the Baltic leaders continue the integration process. In particular, according to the adopted decision of the European Union dd. 01.01.2015, the euro is introduced in Lithuania and thus all three Baltic republics receive the status of the members of the euro zone (Estonia &#8211; from 01.01.2011, Latvia &#8211; from 01.01.2014).</p>
<p><strong>Historical background </strong></p>
<p>In the 90s of the twentieth century the states, that formed the Soviet Union or that were a part of the socialist community, faced the choice of a new path of its development due to fundamental changes in the world order.</p>
<p>Curious phenomenon in this regard happened in the Baltics &#8211; Latvia, Lithuania, Estonia. Traditionally, they were positioned by American and European politicians and experts as an alien part of the Soviet system, in particular, their organic ties with Western Europe and the whole Western world was emphasised various times. So their singling out of the Soviet system was assumed to be comparable with the effect of overriping a fruit on the tree – you just touch it, and it will fall from its branches.</p>
<p>However, despite the fact that in the early 90s of the twentieth century, a number of key positions in the new political leadership of the Baltic republics was taken by candid russophobes, the general mood of the population was very far from being able to consider it anti-Russian. Moreover, &#8216;revolutionary&#8217; euphoria of the 90s was melting, Latvia, Lithuania, Estonia drew more attention to the fore questions of supplying population with work essentials, the maintenance of normal functioning of the state.</p>
<p>In this sense, Latvia, Lithuania and Estonia economically remained deeply integrated into the national economic relations of former Soviet republics, who had respectively serious influence on the political life of the Baltic republics. In general, on the eve of the 2000s the Baltics reflected a drift toward the observed prevalence of sentiment in favour of a preferred development of the Baltic republics within the existing historical and geographical ties, especially with Russia and Belarus.</p>
<p>It was clearly shown by foreign capital, primarily North European, that although had rushed to the Baltics, but for about 10 years had stayed in waiting position, not excluding the reversible movement of the Baltics to Russia. For example, the North European banks, which although had resources and expertise, avoided to open business on their own, preferring to acquire small share of the local capital, entering into its structure, retaining its name and acting on its behalf.</p>
<p>In this context the strategy of strengthening the retention of Latvia, Lithuania and Estonia in the area of attraction to the West, which was embodied in the fact, that the presidents of the Baltic countries were invited from the USA (Latvia &#8211; Vic Freiberg, Lithuania &#8211; Valdas Adamkus, Estonia &#8211; Henrik Ilves). During their presidential term these countries submitted applications to join the European Union. Those applications have become an indirect recognition of the fact, that the Baltic economies do not have the capacity of unsubsidized, independent and autonomous development. North European financial capital was selected as the source of borrowed funds.</p>
<p><strong>Applications for membership in the European Union </strong></p>
<p>Application of the Baltics for EU membership was submitted in the mid 90s, but they were satisfied only in the mid-2000s. It is reasonable to analyze, why it took more than 10 years. The main obstacle was that the concept of activities of the European Union did not provide its development to the east. Only in 2000, during the summit in Nice, the EU took the decision of principle possibility of its expansion to Eastern Europe and the Baltics. Another limiting circumstance was doubts of the European Commission on when and in what form (adoption in groups or individually) the EU could meet the demands, so that new members do not become a serious encumbrance to EU economy. As a result, the question of joining of the Baltics to the European Union was moved only with Jose Manuel Barroso team, who became the new leader of the European Commission. As it is known, his work as a chairman of the European Commission represented the consistent and persistent activities in the Euro-Atlantic direction of the European Union.</p>
<p>It is seen, that the entry of the Baltics to the European Union was not a decision of indigenous Baltic elite, but was introduced from outside. It is also clear, that this idea did not come from the European Union, which is conceptually and organizationally did not plan any activity in the eastern direction. In practice, the idea was implemented only by Barroso team. In other words, the above circumstances are likely to confirm, that the idea of joining the Baltics to the European Union and its practical implementation both have transatlantic origin. Officially, Latvia, Lithuania, Estonia joined the European Union on 01.05.2004.</p>
<p><strong>The role of the North European financial capital</strong></p>
<p>The first few years of membership of the Baltics in the European Union were characterized by an unprecedented surge in the growth of the national GDP, which reached 10% [1(1)]. Outside observers were inclined to treat it due to the capacity of the EU and strongly exaggerated the idea, that the development of the Baltic countries was artificially constrained by the Soviet Union and therefore the other former Soviet republics should be guided not by the Commonwealth of Independent States (CIS), but by the European Union.</p>
<p>However, analysis of the structure of GDP formation in the Baltic countries during this period showed, that its major part consisted of financial transactions of North European banks, mainly Swedish (SEB, Swedbank). Northern Europeans aggressively lent funds to people and local businesses. The primary tool was lending at small percentage (sometimes less than 2%), but for a long term (40 years). Northern European banks thus implemented created by them in the 90es of the twentieth century competitive advantages of equal participation in local credit institutions and ensuring themselves some legal benefits.</p>
<p>As noted above, the North European capital by its nature is very cautious and before joining of the Baltic countries to the European Union it did not believe in many business activities. The new status of the Baltic countries was perceived by the North European capital as political and economical guarantee of further investments to the Baltics.</p>
<p>At the same time, high rates of GDP growth were perceived by Baltic population and leadership as real national economic recovery. The Baltics took initiatives for the entire European Union and almost considered themselves as equal to the founders of the organization.</p>
<p><strong>Reference points for the accelerated introduction of the euro</strong></p>
<p>It is significant, that almost immediately after joining the EU Latvia (national currency LVL) and Lithuania (LTL) appealed to the exchange rate mechanism -2 (MOK -2, Exchange rate mechanism (EKR) &#8211; 2), which is an integral part of the Economic and Monetary Union (EMU), known colloquially as the euro zone. The mechanism provides the establishment of a fixed exchange rate of the national currency to the euro, on the understanding that its market rate can fluctuate only within ± 15%. Joining the mechanism is made on the basis of an agreement between the National Bank and the ECB. The two-year participation in the mechanism of the exchange rate without revision ratio (that is, without devaluations and revaluations) serves as the basis for the application to join the euro zone [4(1)]. As for Estonia, its currency (CZK) was initially pegged to the German mark and after the introduction of the euro in the EU the fixed exchange rate of the crown was transformed into a suitable fixed exchange rate of the euro.</p>
<p>Certainly the euro, which has become a reality in the European Union since 01.01.2002, provides a number of advantages to the countries within the euro zone. First and foremost is that the use of the euro in the netting minimizes the risk of loss, usually expected when changing money from one currency to another. Given that most of the commercial and financial transactions in the European Union are accounted for the domestic market, a Member State receives a certain guarantee against such risks. That leads to a relative alignment of prices, which reduces the possibility of speculative transactions related to exchange rate differences &#8211; an activity called as arbitration of exchange. The possibility of refinancing on a national scale and at the corporate level appears due to the issuance of bonds, denominated in euros [5(1)].</p>
<p>At the same time it should be emphasized, that the outlined advantages appear under certain conditions. The starting point is that these benefits work, when countries are the members of the euro zone. Currently, there are 18 members. As of 01.01.2015 Lithuania is to join them and then their number will reach 19. For comparison, it should be noted that the total number of countries – EU members is 28. It should be taken into account, that a number of countries has introduced the use of the euro as the national currency apart from the membership the euro zone. These countries fall into several groups. So one of the countries that consider the euro as the national currency only for their own in particular, Montenegro and Kosovo. Other countries are not members of the EU, but as per the agreement with the European Central Bank, they have received the right to use the euro, such as the Vatican. Neither one, nor the other group of countries belong to the euro zone and therefore cannot enjoy the full benefits of it.</p>
<p>It implies, that the Baltic countries theoretically faced several variants of behaviour in relation to the euro. Two were described above. One more variant was the biggest integration into the European Union and then raising the question of joining the euro zone. All three countries opted for rapid joining the euro zone.</p>
<p><strong>Fiasco of Lithuanian application for the euro</strong></p>
<p>In the early 90es taking into account prevailing anti-Soviet mood Lithuania assumed the role of the leader among the Baltic republics. It put forward the ideas, that required in its view, joint implementation, and often spoke on behalf of the Baltic republics. It was partly motivated by the fact, that Lithuania was the largest in terms of population and territory in the region, and its leaders seemed to be more active and so to say perter, than their Baltic neighbours. In particular, the initiative of Lithuania to cooperate within the Baltic countries was institutionalized by establishing inter-parliamentary body, which was named the Baltic Assembly.</p>
<p>It was very difficult to make this intention economically profitable. Generally Baltic economies are of the same type, based on the provision of services in the field of transit and production of agricultural and fishing products. By virtue of this fact, they are more prone to competition than cooperation. For example, during Soviet times their mutual trade accounted for only 5% of the national trade with other Soviet republics [6(1)]. In fact, the Soviet Union leveled the competition between them and provided the Baltic republics such a division of labour among the Soviet republics, which allowed them to prosper economically, without hindering each other.</p>
<p>However, Lithuania continued to proactively take on mission of unifying the Baltic republics and tried to push Latvia and Estonia for cooperation in the economic field. Basically, it relied on the fact, that Lithuania had a nuclear power plant (NPP Ignalina), which was built by the Soviet Union as a regional plant, in good faith to fulfill its role, and the Baltic economies were in a certain extent dependent on it. Lithuania also initiated various kinds of joint activities for the preparation of the Baltic republics to join the EU.</p>
<p>After the entry of the Baltics into the European Union Lithuania continued for a while to position itself as the leader of the Baltic republics and, in particular, persistently declared joint accession to the euro zone. At the same time, as if to confirm its leadership ambitions, Lithuania separately was preparing for applying to the introduction of the euro.</p>
<p>The procedure for submission and consideration of the application usually covers a two-year period, which is as follows. The application is filed at the beginning of the calendar year &#8211; around February and it is based on economic statistics of the previous year. Five indicators are considered as key factors, which are called the Maastricht keys and which reflect the rate of inflation, state debt, comparing with the average for the euro zone. In March, the application is reviewed at the meeting of EU finance ministers. If they support it, it will be sent for approval to the European Commission and then approved by the European Union summit in summer, meaning that the country&#8217;s accession to the euro zone will occur the following January. To support the application are important indicators of the economy on the eve of the application. These indicators are formed as a result of the comparison with the previous year.</p>
<p>Therefore, a country, that intends to apply for joining the euro zone, should think about prosperous economic performance and take measures to ensure the two years prior to the planned introduction of the euro. In addition, a two-year regime of the host country of the applicant in the exchange mechanism 2 must be also observed (described above).</p>
<p>Latvia and Lithuania which joined the European Union as of 01.05.2004, joined the mechanism of the exchange rate &#8211; 2 (IOC) in summer of the same year. Estonia, known to &#8220;fix&#8221; itself even earlier to the German mark, took the obligations under which it adopted the euro. Thus, in summer 2006, the Baltic countries could have considered themselves to fulfill obligations under the exchange mechanism-2 and qualify for joining the euro zone. However, there were no other necessary grounds, since the Baltics joined the European Union in the middle of the year and that year could not have been considered as a full-fledged economic year in the European Union. This year could have been the year of comparison. In other words, the only economic performance in 2005 was the basis for comparing the performance in 2006, i.e. the earliest period of application was only 2007.</p>
<p>Lithuania took the opportunity and at the beginning of 2007 applied to join the euro zone, while other Baltic republics abstained. The Lithuanian application did not find proper understanding of the European Union, who doubted, that all economic indicators of Lithuania quite reconciled and fully complied with the Maastricht requirements. Already at the first stage of consideration &#8211; at the meeting of finance ministers &#8211; the application was rejected in a gentle manner with a proposal to revise the issue later. However, the Lithuanian leadership insisted on the consideration of the application at the European Commission and obtaining an official response. It was negative on formal grounds: indicators of Lithuania at the average rate of inflation exceeded the established figures for a few tenths.</p>
<p>It was dramatic for Lithuania. Lithuanian experts at the time conceded that in case of refusal Lithuania would be able to re-apply in 8-10 years. Its economic potential, created during Soviet times, was subject to large-scale changes as per the structure of the division of labour in the EU, where there was no need, as it turned out, in Lithuanian industrial assets. In addition, the process of de-industrialization of Lithuania took place against the growing crisis that led to the global financial and economic crisis of 2007-2009.</p>
<p>The real reason for reticence of the European Commission in granting Lithuania&#8217;s membership in the euro zone was that North European capital, personified in the EU by North European countries, which opposed the idea. Lithuania’s transition to the euro would have slowed down the lending process and narrowed the credit lending to Baltic population and business. Loans were provided in the national currency &#8211; Lithuanian LTL. Its replacing with the euro would lead to a jump in prices &#8211; usually the euro is accompanied by a rise in prices by 20-25%, which would weaken the solvency of the population and its interest in lending. In a broader sense &#8211; it would serve as a &#8220;bad&#8221; example for Latvia and Estonia, which also were developing lending mechanism.</p>
<p><strong>The global crisis of 2007-2009</strong></p>
<p>Current international assessments and studies have the practice to determine the timing of the global crisis precisely by these years and to call it financial, economic, because it has happened during this period in the United States. So it was classified by US Fed officials. Apparently it served as an indirect admission that hotbed of crisis was USA, on the other hand it stated that it is still the largest economy in the world in terms of the impact on economic processes in the world and individual countries.</p>
<p>In the current period, many experts, resorting to a retrospective analysis of the events, that preceded the global financial and economic crisis, advised the conditions of the growing crisis. At the same time, if we look at studies of the period, especially Baltic ones, the beginning of the crisis was in doubt. Doubts were set out in such a way, that households and business retain a sense of expediency not to weaken the expansion of production, but to continue to resort to borrowing and investment plans unabated. This pertains not only to the Baltics, but since the focus of this article is there, it is reasonable to ask, what guided the researchers of that time.</p>
<p>Analysis of their status showed that they somehow were associated with northern European capital, whose influence they could not deny. The most authoritative Baltic experts are both full-time or engaged analysts of Swedish banks. They are supported by economic and financial Baltic media, which in turn are controlled by North European media groups. It is necessary to take into account the fact, that with all due respect to the Baltic experts, their names and their views are not considered as global and even regional, i.e. they cannot be counted among the original and most of them base their arguments, relying on the opinion of American and Swedish experts, besides they quote them often as a basis for their findings, i.e. findings for the Baltic economies.</p>
<p>It should be taken into account, that the economic processes of the Baltic countries are traditionally characterized by a certain inertia, meaning that they occur with some delay. In particular, under the influence of incentive estimates generated by north European capital, local businesses and households continued to be filled with borrowed funds and accordingly the operations increased the GDP. From this we can firmly state, that the Baltic processes are not in the center of the world, but on the outskirts or close to the edge, if you measure the effect of concentric circles. Secondly, they copy the &#8220;world standards&#8221; and they need time for the development and implementation.</p>
<p>As a result, the crisis in the Baltics if we analyse GDP, came in 2008 – 2010 [1(2)]. It is a kind of indicator of how much and to what extent the Baltic economy delays or you can say to what extent it is influenced by North European Capital.</p>
<p><strong>Introduction of euro in Estonia </strong></p>
<p>The outbreak of the global financial and economic crisis of 2007-2009 led to several findings. The first &#8211; that the EU, that seemed unshakable to its members and outside observers, turned to be easily vulnerable to the crisis. Second &#8211; the fact that the EU as the union of the most European countries, was not ready for a crisis. There were no anti-crisis strategy, no established coordination mechanisms of member countries during the crisis. The third &#8211; that the Member States and national levels did not take proactive measures to mitigate the crisis and did not propose ways out of the crisis. In both cases the reaction took place in the spontaneous mode, which is called ad hoc.</p>
<p>However, a number of countries, particularly the North European countries, led the line for regional isolation in the European Union as a means of fencing from the crisis. In addition, the North European business took a number of preventive measures in case of deterioration of the situation in the country of investment. I mean the Baltic. In particular, the status of the North European banks changed, which converted into branches. Subtlety is that the branches were not necessarily to provide mortgage capital in contrast to full-fledged banks. New private companies were established, which bought the buildings of banks and the branches, and then branches of the banks rent it. This measure was effective for social-economic exacerbation in the country, as local authorities had nothing to nationalize the bank property, which looked only stationery. It was emphasized, that all North European banks were close to their parent banks or their parent banks were situated in Tallinn (Estonia).</p>
<p>These measures have shown, that northern european business seriously assessed the situation in the Baltic countries, allowing for the possibility of social and political actions of the process, caused by the crisis.</p>
<p>Apparently such a move prompted thoughts of persistent proposals from Baltic businessmen and a number of politicians, who called for the devaluation of national currencies. The materialization of appeals to the devaluation would mean a depreciation of the debt, obtained by local businesses and the community. While the figures appeared 20-30% devaluation, which was the same percentage fell to debt and creditors (North Europeans) and borrowers (Baltic business and households). Given the small scale of the Baltic, North European experts expected the activation of the principle of dominoes. An effective resistance could be the introduction of the euro, which the national authorities were not entitled to devalue, in addition euro would raise the amount of the debt (the debt was formed in the conversion of dollars into the local currency). Although the crisis in the euro zone experienced the incubation period (trudged public form in spring 2010), but for certain adept individuals in financial circles it had already been obvious.</p>
<p>Estonia was selected as key, that on one hand was determined by the North European capital as a springboard to the Baltics &#8211; head offices of represented companies were usually based in Tallinn (Estonia). Secondly, being the smallest and most absorbed by North European capital, economy in the Baltics, it could be easier made to meet the Maastricht parameters, comparing other Baltic economies.</p>
<p>In respect to established procedure in early 2010, Estonia applied and in the midst of the crisis in the euro zone received all necessary approvals, becoming as of 01.01.2011 a full member of the euro zone.</p>
<p><strong>Formation of conditions of joining of Latvia to the Eurozone</strong></p>
<p>The next candidate among the Baltic countries to join the euro area was Latvia. Her preference to Lithuania was due to a number of circumstances.</p>
<p>Thus, Latvian political leadership with its inherent hardness, typical for Latvians, strictly adhered to the principle of laying problems out of the crisis on the local population, which was achieved at the expense of the hard social sequestration of the budget and consistent wage cuts, reduction of which reached 40-50% of the pre-crisis level. At the same time the state firmly suppressed any attempts of national business to raise the question about the devaluation of the Latvian lat. Policy of containment and antisocial Latvian policy was full supported by international financial institutions such as the IMF and the World Bank. Their leaders believed possible to periodically visit Riga (Latvia), which repeatedly showed Latvian leaders as role models for the European countries during the crisis. Especially Latvia was often used in the debate on the crisis in the euro zone and for criticism of countries designated as the source of the crisis: Greece, Italy [6(1)].</p>
<p>At the same time Latvia faced faster and stronger than in the other Baltic countries growing moods of protest, which was becoming large-scale and resulted in open demonstrations and a clash with the police in Riga.</p>
<p>In parallel a new trend of convergence in the political and social level of the indigenous and Russian-speaking population began to develop, which culminated in the creation of a party, uniting in almost equal proportions both (party Soglasie). As one of the main slogans the united party declared the creation of a uniform civil society in Latvia. The trend developed in spite of the official line on the discrimination of Russian speakers in Latvia and the opposition to Latvians. The party won parliamentary elections of 2011 and municipal elections of 2013, culminating in the re-election as the mayor of Riga, the centre of political and social life of Latvia, the leader of Soglasie, Russian-speaking N. Ushakov.</p>
<p>To summarize the choices and processes in society, it signalled increased distance between the official authorities and the population. It seemed particularly alarming to representatives of foreign capital, especially financial Northern European. Of course, it was not about revolution, but changes could have been sudden and unpredictable. Accordingly, from any other more moderate leadership that would come to replace the current, one would expect a risk of devaluation of the debt. Probably one also considered the fact, that in the hierarchy of scales of North European presence in the Baltics, Latvia capital followed Estonia. North European capital controlled 80% of assets in the Estonian banking sector, 70 % -  in Latvia.</p>
<p>Intention to adopt the euro in these conditions, consistent with the wishes of the Latvian political leadership, which sought a way to increase its credibility, coincided with the interest of North European Capital and was supported by the IMF, World Bank, ECB.</p>
<p>However, the status indicators (see above) needed for a positive review of the potential of the Latvian application was far from the requirements. For their rapid and radical improvement Latvia decided to use foreign loans. It was organized in the form of bonds release in the amount of one billion, which was almost entirely acquired by American investors, not publicly named. Moreover, the transactions were concluded in the United States, where Latvian officials traveled for the relevant negotiations [9(1)].</p>
<p>The funds, obtained in this way by the Latvian authorities, brought the required performance for the introduction of the euro to the standards. In particular, some of these funds passed through social clauses of the state budget and increased consumer demand, stimulated the real sector and at the same time increased the level of debt repayment to Northern European capital and loan service. Improved performance for 2012 led to the submission by Latvia in 2013 the application for joining to the euro zone, which were approved by all EU authorities and as of 01.01.2014 of Latvia has got the status of a member of the euro zone.</p>
<p><strong>Promotion of Lithuania by joining to the Eurozone</strong></p>
<p>Overcoming of the global crisis of 2007-2009 by the Baltic republics occurs with appreciable difficulties. Labour emigration continues in a noticeable scale. Unemployment remains high. The market of investment proposals remains very narrow. With regard to such criteria as the restoration of the pre-crisis level of GDP, it is estimated by the profile of the EU Commissioner, that the Baltic countries may reach it by the end of the decade.</p>
<p>Accordingly, Lithuania &#8211; the last Baltic republic not covered by euro zone, has a difficult task to introduce the euro. We cannot say that Lithuania shows the worst performance among the Baltic States, but it has a number of specific features. Under these conditions it would be problematic for Lithuania to get EU approval of its potential application to join the euro zone. No improvement in sight and levers, at least required (Maastricht) economic indicators. Lithuania didn’t meet the same understanding among potential lenders, as Latvia did: over the past few years, the overall economic situation deteriorated and investors became more careful.</p>
<p>In this regard, the political leadership of Lithuania made a bet, apparently, on foreign policy activity, which apparently had to compensate the economic disadvantages of potential joining the euro zone for Lithuania. Win-Win was the maximum Lithuanian participation in anti-Russian projects.</p>
<p>The case happened during Lithuania&#8217;s Presidency in the EU, which occurred in the second half of 2013. The defining agenda was the implementation of the Eastern Partnership program, primarily designed to hold a dual EU summit in Vilnius (Lithuania): one on the Eastern Partnership, another &#8211; traditional EU summit in the second half of this year. The first expected to sign an association agreement between Ukraine and the EU, as well as the initialling of association agreements with Armenia, Moldova and Georgia.</p>
<p>Eastern Partnership Summit turned a failure in the sense that Ukraine proposed to postpone the signing of the Association Agreement, and Armenia refused to initialling. It is unlikely that these results can be regarded as favorable to Lithuania&#8217;s EU presidency as a success, despite the fact that Lithuanian officials in preparation for the Eastern Partnership summit crossed political ethics and international law in many cases [10(1)].</p>
<p>When initiating the desire of Lithuania to join the euro zone, it must be taken into account and that the European Commission of that time, which was personified by its Chairman Jose Manuel Barroso and his first deputy Ashton, was ideologically close to the Lithuanian leadership. Both adhered to outright Euro-Atlanticism in the foreign policy, virtually ignoring Europeanism as an independent ideological trend.</p>
<p>Such ideological affinity helped Lithuania to rectify the situation with the introduction of the euro. Initiated from outside destabilization of the situation in Ukraine, which led to the coup in February 2014, increased the credibility of Lithuania&#8217;s anti-Russian orientation, in particular, its activity was marked during the preparation and conduct of the Vilnius Eastern Partnership summit, which some observers interpreted as a prelude and momentum to Euromaydan in Kiev.</p>
<p>EC had reason to encourage Lithuania. Thus, in early 2014 the Lithuanian capital was visited by the Commissioner in charge of the euro, who made it clear to local leaders, that their possible application for accession to the euro zone could count on favorable consideration. Lithuanian president and prime minister hurried conversation to make public, by expressing the firm conviction that in 2015 their country becomes a member of the euro zone [11(1)].</p>
<p>Indeed, the Lithuanian application was considered without attracting widespread attention to it and &#8220;understanding&#8221; its weak performance, which were so far from matching that a special base calculation was applied, specifically beneficial for Lithuania, and the outcome document of the European Commission explicitly stated that Lithuanian indicators were obvious tend to deteriorate, which gained strength-to-date of the introduction of the euro. The authority of the European Commission headed by Jose Manuel Barroso, which expired 01.11.2014, was also taken account, as there were no doubts that the new European Commission will not allow condescending attitude to a mismatch Lithuanian performance requirements of Maastricht. These circumstances clearly indicated, that the decision on Lithuania&#8217;s accession to the euro zone from 01.01.2015 was based not on the economic considerations and not performing all the prescribed requirements of Lithuania.</p>
<p>Against this background, it is funny that a positive decision on the possibility of Lithuania to join the euro zone from 01.01.2015, was adopted by the same Commission, which rejected the Lithuanian application in 2007 with better indicators of the Lithuanian economy.</p>
<p><strong>Baltic States as an indicator of US attitude to the euro</strong></p>
<p>Getting Latvia a billion loan in the United States in the form of long-term deployment of Latvian bonds (see above) gave evidence, that major American business was interested in Latvia joining the euro zone. So money, obtained by the Latvian authorities in the United States, was sufficient to pour into the national economy in order to bring economic indicators of Latvia in accordance with the requirements of the euro zone and get an approval from the European Commission on the appropriate Latvian request. Moreover, while placing bonds in the USA, the Latvian officials did not hide their intentions with respect to the euro. If we compare these facts with the background of the time, when leading American financiers, for example, such as D. Soros offered apocalyptic scenarios for the future of the European Union, and predicted that the euro would soon disappear from the scene, it may cause some confusion. There are two explanations. Either only a part of American business retains an interest in co-existence with the dollar and the euro, and another part rejects such an alternative. Or either to take the crisis in the euro zone as a large-scale and long-term stock game on the world market, aimed at obtaining benefits from the sharp fluctuations in the exchange rate difference of the dollar and the euro. It seems reasonable to assume a combination of both.</p>
<p>One should also study the fact, that the attitude of the Baltic republics and Eastern European countries (Hungary, Czech Republic, Slovakia, Poland) to euro is diametrically opposite after the deployment of the crisis in the euro zone. Thus, when joining the European Union, various countries were competing each other for the right of the first to join the euro zone. It was not until the global financial and economic crisis of 2007-2009 and the beginning of the crisis in the euro zone (spring 2010). Then, Eastern Europe changed drastically its approach. They did not hesitate to announce publicly the decision to postpone the filing of applications for the introduction of the euro, not specifying the period of such break. Eastern European countries referred to the negative perception of the euro in their country and the difficult economic situation in Europe and the world. Slovakia, which is already a member of the euro zone, a widespread, including in the local parliament, held various debates about the feasibility of leaving the euro zone. At the same time the leaders of the Baltic republics, despite the observed and in their countries significant negative perception of the euro, steadily continued course of joining to the euro zone.</p>
<p>In particular, it should be noted, that the decision on joining of Lithuania to the region, as stated above, was of undeniably political character, and economic element was simply taken into account. The main criterion was taken unwavering loyalty of Lithuania to Euro-Atlanticism concept in its most conservative form. Lithuania is distinguished by the fact, that the Lithuanian commitment to Euro-Atlanticism has the character of active work on its promotion and especially in terms of anti-Russian contents. It should be noted, that the Lithuanian political leadership ignored public calls to hold a national referendum on the desirability of introducing the euro in Lithuania.</p>
<p>In general, some observers are inclined to see a significant part of the Euro-Atlantic component in the pursuit of the Baltic republics to participate in the activities of the euro zone in the sense that the expansion of the euro zone due to sluggish Baltic economies will undoubtedly weaken the euro zone and distorts the performance of its development, that somehow affects the authority euros, its quotations.</p>
<p><strong>The role of the euro for the further development of the Baltic economies</strong></p>
<p>Among the most obvious consequences of the introduction of the euro in the Baltic countries was the increase of prices of goods and services &#8211; an average by 20-30%. It has become real in Estonia and Latvia, and soon it will be felt by the population of Lithuania. If you wonder about the potential positive impact of the euro on the positive development of the economy, the euro supporters emphasize that the euro can save a significant part of the financial costs of turnover of goods and services in trade and economic relations in the European Union. This thesis is not disputed and is the result not only of theoretical calculations, but also long-term practice of EU activities.</p>
<p>However, the majority of the supporters of the euro forget the fact that saving effect begins to acquire practical importance only under certain scale of trade and economic operations &#8211; when it comes to the functioning of big capital and its relations also with big capital.</p>
<p>With regard to the Baltic, large capital is associated mainly with foreign capital, which is represented mainly by northern European capital. Therefore, it is logical to assume, that the main benefits of joining the Baltic states to the euro zone will receive foreign companies operating in the Baltic area.</p>
<p>Moreover, the inevitable price hike, that accompanies the introduction of the euro, a negative impact on competitiveness of agricultural products, which a substantial part of export of Latvia, Lithuania, Estonia. Their neighbours, also focusing on the export of similar agricultural products, will undoubtedly get price win. We can talk about Poland, the Czech Republic and Hungary.</p>
<p>Theoretically possible to consider the possibility of the euro as an instrument for the protection of force majeure in the national economy. In particular, what useful role could render the euro in a situation of confrontation between anti-Russian sanctions and other protective measures at the Russian sanctions regime with the EU. Neither the status of the euro, nor its theoretical purpose does not create the preconditions for the Baltic countries to count on him as a tool to compensate for their current difficulties, arising from active participation in the anti-Russian sanction activities.</p>
<p>One can hardly expect that the joining of the euro zone will improve the conditions of trade and economic relations with other members of the euro zone. The leading countries has used euro for more than 10 years, they have established stable relationships and the existing structure of the division of labour, they are not going to change because of the accession of the Baltic States. In other words, neither the EU nor the Baltic republics further diversify its economy in order to fit into the current in the euro zone of division of labor.</p>
<p>One may wonder on whether the euro will strengthen regional integration, with a view to strengthening cooperation between the Baltic States, which are not experts tend to  perceive as a single entity, what is a fallacy. Baltic economy, as noted above, are the same type that naturally pushes them to the centrifugal tendencies in the relations between them. In political terms, also observe the process of separation. For example. Estonia strongly focuses on their ethnic and geographic proximity to the Nordic countries and constantly raises the question of how to treat it as part of the Nordic countries, and not as the Baltic states. In this context, the euro does not have any resources other than the nominal, that would be a reason to say that the introduction of the euro could cement the unity of the notorious Baltic states, which appears only on the anti-Russian. As a general conclusion it can be stated, that the introduction of the euro in the Baltic countries cannot be considered a pulse or a tool to accelerate the development of the national capital and the advancement of the population.</p>
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		<title>THE DEVIL IS NOT SO BLACK AS HE IS PAINTED</title>
		<link>http://en.abfund.org/?p=143</link>
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		<pubDate>Thu, 18 Sep 2014 20:52:04 +0000</pubDate>
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				<category><![CDATA[№2 (10) 2013]]></category>
		<category><![CDATA[Culture]]></category>
		<category><![CDATA[Lithuania]]></category>

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		<description><![CDATA[Lithuania has a unique museum which no other country can boast. It is the museum of devils in the city of Kaunas. Today it is an affiliate of the Ciurlionis National Art Museum. The museum was launched by distinguished Lithuanian artist Antanas Zmudzinavicius who enjoyed number 13, the devil&#8217;s dozen, and always respected the characters [&#8230;]]]></description>
				<content:encoded><![CDATA[<p><strong>Lithuania has a unique museum which no other country can boast. It is the museum of devils in the city of Kaunas. Today it is an affiliate of the Ciurlionis National Art Museum.</strong></p>
<p>The museum was launched by distinguished Lithuanian artist Antanas Zmudzinavicius who enjoyed number 13, the devil&#8217;s dozen, and always respected the characters that not always were human enemies.</p>
<p>Number 13 played a specific role in the life of Zmudzinavicius. His name-day was on the 13th, he met his future wife on the 13th, and his only daughter was born on the 13th. The artist said he made friends with the devils in childhood. He collected 260 exhibits (20 devil&#8217;s dozens) and decided to display the collection to the public. Zmudzinavicius said he promised to the first devil he met in Samogitija to shelter his brothers in his home and show them to people in exchange for good health and long life. The artist lived 90 years and presented his house with the museum to the city one year before passing away in 1966. But after his death devils continued to arrive and arrive from all over the world. In 1982 the house had to be expanded to accommodate all devils.</p>
<p>Today the museum collection numbers over three thousand exhibits of various forms and colors, with horns, tails, hooves, wooden, ceramic, metallic, and even woven on carpets. They are all gifts. Some are household items, e.g. walking-sticks, door handles, glasses, plates, and openers. Others pose for musicians, dandies or politicians. The third took on the image of donkeys, dogs or pigs. Like any evil spirit they can acquire any image. The collection is constantly growing due to new and often unexpected gifts. This year which is also the 13th the museum received a clock with a devil from South Korean musicians.</p>
<p>Devils occupy a major place in both Slavic and Lithuanian folklore. The latter has over five thousand fairy tales and stories related to the important character in folk conscience. Close to 400 places are named after him. Scientists say even the main Lithuanian natural site, the famous Puntukas stone, was pushed to its current place by the devil in the Ice Age. He wanted to crash with it a nearby church under construction but dropped the stone when he heard cockerel sing and thus the divine house remained intact.</p>
<p>In contrast to Slavic ethnography, the Lithuanian one does not always depict the devil (Velnias in Lithuanian) as a bad guy who wants to harm humans and seduce them out of the right way. He helped the spirit of ancestors (veles) maintain contact with those living. Sometimes he helped the poor and did it selflessly by showing treasures and hidden wealth to them. It is related to pagan perceptions about underground spirits that keep buried treasures and protect the poor and honest people and punish greedy and brutal. With the advent of Christianity the devils were moved to a team of evil servants of Satan. However popular conscience preserved a dual attitude to them.</p>
<p><strong>In public conscience the devil was not always a bad guy who wants to harm humans and seduce them out of the right way. </strong></p>
<p>Courageous girls even married them (suffice it to recall popular Lithuanian musical Devil&#8217;s Mill) and various deals were concluded with devils. They often appeared at various male parties and liked to visit village gatherings. Girls were even warned by strict mothers: if she liked a stranger dancer at a party she had to step on his foot to check whether it is a hoof. Lithuanian devils worked hard, got tired, and fell in love. Anyway, nothing human was alien to them.</p>
<p>Lithuania was the last in Europe to adopt Christianity and had no rich traditions of religious arts and medieval sculpture. Craftsmen expressed their religious feelings as they could. They cut saints and divine protectors from wood according to established canons. But they gave rein to their imagination in depicting devils and all types of evil force. Some characters were fearful, others were funny and the third resembled outstanding personalities. Zmudzinavicius himself experienced it as his friends-art artists liked to depict him as a good devil.</p>
<p>Gradually the devils acquired yet another trait in folk art. All human vice were attributed to them, mostly smoking and alcohol consumption (they invented hebon), lasciviousness, greed, and acquisitiveness. The dark forces personified by devils in modern popular conscience are thus accentuating the bright sides of life. The more devils the brighter the light.</p>
<p>Unfortunately, as demonology experts claim, the number of devils decreased by early XXI century, their power vanished, and Satan ousted them. Their place was occupied by people who better cope with the duties of a devil . May be it is the reason why the world of non-fearful devils who lost their power and settled down in Kaunas is visited both by adults and children of different age. The museum offers various educational programs for them which tell the history of each exhibit and describe witch parties, teach dances, magic deeds and whistling in order to call a marshland or forest devil.</p>
<p><strong>Lithuanian folklore has over five thousand fairy tales and stories related to devils and close to 400 places are named after them. </strong></p>
<p>However they rarely come today. Therefore, it is important to visit the museum where devils found their last shelter and where nobody can offend them any longer .</p>
<p>Galina Afanasyeva,</p>
<p>for Amber Bridge</p>
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		<title>LITHUANIA: HEART-TO-HEART TALK IN 37 LANGUAGES&#8230;</title>
		<link>http://en.abfund.org/?p=131</link>
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		<pubDate>Wed, 17 Sep 2014 19:20:48 +0000</pubDate>
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		<description><![CDATA[The government of Social- Democrats drafted proposals and recommendations for the national minority development strategy in Lithuania in 2015-2021 which aims at creating harmonic society and promoting integration of national minorities and preserving their identity. A lawbill on the spelling of names and surnames has been drafted which allows to spell them in official documents [&#8230;]]]></description>
				<content:encoded><![CDATA[<p><strong>The government of Social- Democrats drafted proposals and recommendations for the national minority development strategy in Lithuania in 2015-2021 which aims at creating harmonic society and promoting integration of national minorities and preserving their identity. A lawbill on the spelling of names and surnames has been drafted which allows to spell them in official documents on the Latin basis by non-Lithuanian letters. The next issue is the spelling of localities in several languages in places of compact residence of minorities as is recommended by framework convention of the Council of Europe ratified by Lithuania.</strong></p>
<p>A big part of Lithuanian society views the concessions to ethnic minorities, first and foremost the Poles, as a threat to the very existence of the state. Rallies were staged in the country under the motto &#8220;No to Polonization of Vilnius Region!&#8221;, &#8220;Protect the land of ancestors, the state language, and integrity of the land!&#8221;. But experts insist there is no threat to the Lithuanian language as there is no problem of integrating national minorities into Lithuanian society. Young people from non-Lithuanian families experience no communication problems and successfully enter local institutes. After joining the European home Lithuanian citizens have to tolerantly comprehend the processes undergoing in the EU.</p>
<p><strong>Language as economic factor</strong></p>
<p>The education, science and culture committee of Lithuania and the European information bureau in Lithuanian Saeima have recently initiated a discussion on whether the European Union pays sufficient attention to the implementation of the multilingualism policy. Much of the discussion directly relates to national minorities in Lithuania, as well as to millions of other Europeans whose native language does not correspond to the state language of their countries of residence. Experts say such people comprise a majority in modern Europe.</p>
<p>The discussion was started by Agne Kazlauskaite, language and translation coordinator of the Lithuanian mission to the European Commission. &#8220;Multilingualism is the wealth of Europe,&#8221; she said adding that yet in 1958 the founding documents of the European Union stressed the importance of preserving various languages and cultures on its territory. Since then all important EU documents have been translated into all official languages of EU member-countries (23 at present and Croatian is to become the 24th) and billions of euro are allocated to advocate multilingualism. Kazlauskaite said besides official languages EU countries speak over 60 regional and national minority languages. A special European charter has been designed to regulate their preservation and use (Lithuania has not inked it so far). It gives grounds to state that multilingualism is an integral part of the EU legal system while the right to speak the native language is the basic freedom of modern Europeans. Kazlauskaite said the aim of the European multilingualism policy is to preserve the current language wealth and use it for efficient de velopment.</p>
<p>It has been calculated that EU enterprises annually lose up to 11 percent of profit simply because they cannot properly agree with potential partners. The vital task today is to make as many as possible EU citizens speak their native and one-two other languages since childhood. To advocate the idea the European Language Day has been widely celebrated on September 26 since 2001. There are so many important and interesting events that celebrations usually last for a week. To intensify foreign language studies by various Europeans &#8211; students, teachers, scientists, professionals in various spheres, and senior citizens international programs Socrates, Erasmus, Leonardo Da Vinci, and others have been designed and successfully operate. Kazlauskaite said the language sector of the European economy which is not always visible to outside observers accounts for 8.4 billion euro. Oral and written translation of all EU speeches and documents into 23 official languages costs a lot! Although the European Commission plans this summer to begin introducing machine translation the demand for skilled interpreters keeps growing.</p>
<p>Discussion participants who already had experience in dealing with machine translation said its efficiency for Roman languages reaches 89-90 percent while for Lithuanian language it is 65 percent so far. Kazlauskaite recalled that each spring various countries, including Lithuania, hold competitions for 17- year old beginning translators who fluently speak two or more languages. Success in such a contest offers the shortest way to a prestigious employment in EU institutions.</p>
<p>Director of the Lithuanian Language Institute Iolanta Zaborskaite calculated that two euro are allocated for translation each year per every EU citizen. It is clear the total result is considerable. There were calls to stop translating EU documents in all official languages and save money by translating them into three-four most popular languages &#8211; English, German, French, and Spanish, for example. &#8220;Genuine democracy cannot be cheap&#8221;, supporters of true European integration objected. &#8220;It is specifically important for a relatively small number of Lithuanianspeakers. Besides, we have a strong argument as Lithuanian language is the oldest of all living languages in modern Europe which is an attractive trademark for its preservation and use&#8221;, said Zaborskaite.</p>
<p><strong>Europe in search of treasure </strong></p>
<p>Senior research fellow of the Institute of Social Research Julija Moskvina and Chairwoman of the State Language Commission Daiva Vaisniene presented at the discussion the first stage of the project Language Treasures of Europe which in 2009-2012 was held in 19 countries by the British Council jointly with other European partners and national institutes of culture. The project mostly aimed at researching local language policies and practices in order to reveal &#8220;language treasures&#8221; buried in each European country. The state of all languages in a determined area was studied &#8211; both official, foreign, regional, national minority and immigrant. Researchers believe the obtained result should encourage politicians, scientists, and public leaders who formulate and implement the European multilingualism policy to actively cooperate with each other along the guideline and promote benevolent and viable cultural and language exchanges in schools, universities, and society in general.</p>
<p><strong>Experts say Lithuania should study Polish, Russian, Belarussian, or Latvian as the first foreign language rather than English.</strong></p>
<p>Conclusions of scientists made on the basis of the results of the first stage of the Language Treasures of Europe project look unexpected at first sight. For example, although all European Union countries focus on the studies of English as the first (and often obligatory) foreign language and it absolutely dominates in this capacity the European Commission recommends to gradually sidetrack from the practice. <strong>Experts say languages of close neighbors should be studied as the first foreign language and English should come second.</strong> It means in Germany the first foreign language should be French, Polish or Czech, in Lithuania &#8211; Polish, Russian, Belarussian, and Latvian.</p>
<p>The European Commission insists that for preserving and developing European multilingualism it is extremely important to support educational establishments of all levels &#8211; from kindergartens to universities where they speak national minority languages. It is also necessary to stop dubbing foreign movies and TV shows, there should be captions instead so that spectators can hear the original language.</p>
<p>Lithuanian Education and Science Minister Dainius Pavalkis expressed caution regarding the recommendations and called not to interpret them literally as &#8220;such laws can make us recognize the Polish language as the second official like Greeks have actually to do regarding the Turkish language.&#8221; The minister explained why not all European recommendations should be followed: &#8220;Relations between countries are a very sensitive issue.&#8221; For interaction within EU and in order to avoid mistakes Pavalkis called to use English as lingua franca because &#8220;the most active and educated residents of Lithuania are ready for that.&#8221;</p>
<p><strong>Socio-linguistic map of lithuania</strong></p>
<p>How is multilingualism developing in Lithuania? The question was answered during the discussion by Professor of Russian philology desk of Vilnius University Ala Lichaceva and her colleague, lecturer at the Polish Studies Center of the University Kinga Geben who have recently completed a special research called Socio- Linguistic Map of Lithuania: Cities and Towns.</p>
<p>Is the traditional multilingual situation changing in various regions of Lithuania due to massive emigration and considerable decrease in population? How are the multinational composition of population in various regions and their languages interlaced? Does multinational Lithuania remain multilingual? Which languages do they speak in our cities? And what are language preferences of Lithuanian residents depending on their nationality, age, and education? The researchers tried to provide exact answers and under the leadership of Vilnius University Professor Meilute Ramoniene summed up the data of the Cities and Languages project carried out in 2007-2009 in Vilnius, Klaipeda, and Kaunas and compared them with fresh results of the Socio-Linguistic Map of Lithuania project held in 2010-2012. The latter project polled 2660 respondents in 67 cities and towns (with a population above 3000). The total number of respondents in both projects was 4697.</p>
<p><strong>What do the results of the project show ?</strong></p>
<p>First of all, they showed that representatives of 154 nationalities live in Lithuania today. It is natural that big cities are mostly multilingual &#8211; Vilnius and Klaipeda. But there are also relatively multilingual regions. In Jurbarkas, Kalvarija , Silute, Seduva they mostly speak Lithuanian. Eisiskes, Nememcine, Salcinikai and other southeastern towns mostly speak Polish. Visaginas, Ignalina, and Zarasai speak Russian. In general the language repertoire of Lithuania is broad enough and continues to expand. Schoolchildren named 37 languages when asked which language they speak at home.</p>
<p>Naturally, the Lithuanian language occupies the strongest positions. It is native for 81.22 percent of respondents and practically all those polled said it was a language which they know most of all. Among foreign languages 94.57 percent said they speak Russian, 51.97 percent &#8211; English, 34.96 percent &#8211; Polish, 21.67 percent &#8211; German, and 5.26 percent &#8211; French. Good knowledge of Russian and Polish depends on the nationality of respondents most of who live in big cities and in the southeast of the country. French is spoken where it is possible to study it in school. Young Lithuanians mostly speak English, German or French, older people &#8211; Russian and Polish. All respondents clearly demonstrated that native language is the most beautiful for representatives of all nationalities. The Lithuanian language sounds better for residents of small towns, while Russian, French and English are most attractive for residents of big cities.</p>
<p>The most necessary language for Lithuania was naturally Lithuanian. It was named by 65.7 percent of respondents. The second necessary language was English (52.69%). Russian was the third (21.42%) followed by German (3.66%), Polish (1.64%), and French (1.58%). Priorities directly depend on the age of respondents: young people are loyal to English and the elderly prefer Lithuanian, Russian, and Polish.</p>
<p><strong>In general the language repertoire of Lithuania is broad enough and continues to expand. Schoolchildren named 37 languages when asked which language they speak at home.</strong></p>
<p>Dialects complement linguistic variety in Lithuania. Their preservation and use is very important for residents of homogenous ethnic regions &#8211; northern Samogitija, northern and central Aukstaitija, southern Dzukija, and western Suvalkija, and less important for ethnically motley southeast of Lithuania. Lichacheva and Geben arrived to the following conclusions. Firstly, territorial and social multilingualism is clear in Lithuania as even in one and the same family people often speak various languages or dialects. Secondly, major cities in the country begin to resemble megacities of the world where multilingualism is common in business, culture, and higher education. Thirdly, the evident expansion of the English language poses no threat to the official Lithuanian language as its positions are very strong in the country .</p>
<p>At the same time experts believe the increasing number of studied foreign languages and migration-triggered changes in the ethnic palette of Lithuania should strengthen linguistic variety in the country and public tolerance to it. Therefore, to promote the policy of multilingualism it is specifically important to encourage the preservation and spread of native languages of all strata of society, promote positive spoken forms of residents and use the existing linguistic situation to design methods and ways of stimulating multilingualism.</p>
<p>Tatyana Yasinskaya,</p>
<p>for Amber Bridge</p>
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		<title>The Knight of Her Majesty… the Book</title>
		<link>http://en.abfund.org/?p=44</link>
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		<pubDate>Wed, 30 Jul 2014 14:51:37 +0000</pubDate>
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				<category><![CDATA[№1 (9) 2013]]></category>
		<category><![CDATA[Culture]]></category>
		<category><![CDATA[Lithuania]]></category>

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		<description><![CDATA[I once asked distinguished Lithuanian journalist, writer and expert in history Vilius Kavaliauskas who of the Russian workers of culture merit to have a Vilnius street named after them. He did not hesitate to name Leo Vladimirov. The Lithuanian scientific community has recently marked the centenary of the birth of Leo Vladimirov (1912-1999), a scholar, [&#8230;]]]></description>
				<content:encoded><![CDATA[<p><strong>I once asked distinguished Lithuanian journalist, writer and expert in history Vilius Kavaliauskas who of the Russian workers of culture merit to have a Vilnius street named after them. He did not hesitate to name Leo Vladimirov.</strong></p>
<p>The Lithuanian scientific community has recently marked the centenary of the birth of Leo Vladimirov (1912-1999), a scholar, historian and book expert whose effort helped return 20 thousand rare and valuable book collections to the library of the Vilnius University. They used to belong to it, but were withdrawn after the closure of the university in 1832. The Vilnius University and the library prepared an exhibition of the rare restituted publications which will be open up to the middle of this year. Thanks to Professor Vladimirov the most valuable for Lithuanians book &#8211; Catechism by Martynas Mazvydas &#8211; returned back home. The first book in the Lithuanian language was published in Konigsberg in 1547 and besides the basics of religion comprised also the Lithuanian alphabet. Thus it laid the basis for Lithuanian script and for the formation of national conscience. .</p>
<p>Only the restitution of lost treasures would be sufficient for the inclusion of Vladimirov into the list of personalities who greatly influenced the cultural development of the country. He was also the founder of a new guideline in library work. He initiated the creation of a library and scientific information desk in the Vilnius University which trained librarians while all institutes in Lithuania got a course of information basics and prepared a concept of computerized system of scientific and technical information. Today it will hardly surprise anyone. But Leo Vladimirov introduced the new course over 40 years ago as if he foresaw the advent of the era of computers with their major possibilities. The foundation he created (Vladimirov quit the desk at the age of 78 in 1990) was used by the Vilnius University to launch a year later a faculty of communications which united the bibliography, information systems, and communications theory desks.</p>
<p>He is the author of scientific works about printing pioneers &#8211; Francis Skaryna who published the book Apostle in Vilno in 1525 according to the sign on the front page, and Ivan Fedorov, as well as about the role of Vilno (as Vilnius was called in the Middle Age) in the emergence of book printing in Eastern Europe.</p>
<p>He said his main work was the General Book History. Its first part that covered a period from the ancient world to the XVII century initially came out in the Lithuanian and then (in 1988) in the Russian language. The second part has never come out as publishers changed priorities. In preparations for the birth centenary of Vladimirov the Vilnius University jointly with its library published a beautiful catalogue of restituted books – Vetera reducta. The proceeds are to be used for the publication of the second part of the book by the professor .</p>
<p>A brilliant intellectual and erudite who was awarded medals and other decorations by the United Nations, Vatican, the Lithuanian Gediminas Order III degree, the Belarussian Francis Skaryna medal, and the Red Star military order, Vladimirov enjoyed love and respect of the people in Lithuania who call him selfless patriot of the country.</p>
<p><strong>At first there was the Book</strong></p>
<p>Speaking about his teacher the academic secretary of the Lithuanian Academy of Sciences, Domas Kaunas, was confused whether Vladimirov was a Russian, Lithuanian, or a citizen of the world. He called him &#8220;a European&#8221;. In reality Vladimirov was a third-generation citizen of Lithuania but always called himself a representative and heir of the Russian culture. That becomes clear from the role of books in his life.</p>
<p>His grandfather Ivan Vladimirov graduated from a medical college and was invited to work as a doctor in a small Lithuanian town of Telsai. He founded the first hospital in the province and was awarded the title of honorable citizen for that. His family preserved the traditions of Russian intelligentsia of the time: they read books out loud in the evenings, both classical and new ones. The home library had five thousand books. There was a cult of Leo Tolstoy with who Ivan Vladimirov corresponded. It was he who insisted that his first grandson be called Leo. As the First World War broke out the grandfather was enlisted into the army and served as a colonel in command of a division field hospital. As the German troops advanced his family left the native place and resettled to Ukraine from where they came back home in 1920. Ivan Vladimirov was the first to return. He was shocked to see that the library was burnt down by the Germans. The most valued relic &#8211; a letter from Leo Tolstoy &#8211; was also destroyed. Ivan Vladimirov died in 1921 after all the hardships he experienced, as well as typhoid at the front.</p>
<p>Children and grandchildren of Ivan Vladimirov returned back to a ruined home. Everything was looted. Leo&#8217;s father Ivan, a graduate from the St. Petersburg Technological Institute was an engineer by profession. Together with his cousin he invented and patented a substance to clean steam boilers from lime deposits. When the family came back to Lithuania he could not find employment. His wife Stefanija Daujotaite, a descendant of the ancient Lithuanian Daujotaite family, could not resume her medical practice either. She was the first woman from Lithuania who received higher medical education first in Switzerland and then in Tartu University where she qualified as a dentist. Her dentist&#8217;s office was also looted.</p>
<p>The Vladimirovs did not surrender on the brink of misery. They moved to Siauliai and in 1926 opened there a commercial library-shop with subscriptions and also signed a deal with Kaunas publishers where they received all the latest publications. The library had a bookbinding and restoration workshop. By the &#8217;40s the business began to yield modest proceeds. Leo Vladimirov recalled that since the age of 12 he enjoyed helping the mother with compiling the catalogue. At that time he studied in a German boarding school in Silute. It was a deliberate choice as the only Russian school was far away in Kaunas while the German one won was famous for the quality of education. The parents reasonably believed the knowledge of yet another language would be good for the son who spoke Russian, Lithuanian, and Polish. Besides, it was important that it was a boarding school where children were fed and looked after for a modest pay. Coming back home on Saturdays and Sundays and later for holidays as a student of the Anglo-German desk of the humanitarian faculty of the Kaunas University Vladimirov worked in the home library-shop, delivered books, accepted orders, and registered new book arrivals. However he did not knew at the time that library would become his life-work.</p>
<p>Vladimirov met his future wife Irina Reingard, the daughter of a Russian Navy officer and captain second rank, in Kaunas University. Upon graduation he was already married but could not find employment by profession and began his career in an insurance company.</p>
<p><strong>Deliberate choice</strong></p>
<p>When World War Two broke out Ivan Vladimirov with sons Leo and Andrei joined the retreating Red Army to fight the Nazis. They were in Belarus and in one town saw children rescuing books from a burning school and handing them out to Red Army soldiers. One of them gave a book to Leo Vladimirov. It was the second volume of War and Peace by Leo Tolstoy.</p>
<p>The book became a mascot for him and he learned many of its parts by memory. Leo Vladimirov fought in the war in the 16th Lithuanian Rifle Division. He was wounded several times and suffered concussions but survived and returned back home in the rank of a captain. On his way back home via liberated Belarus he presented the book to the first school he saw on his way. He joined the Communist Party at the front. It was a difficult but deliberate choice. He was sure it was the omnipotent political force that routed Nazis who he considered criminals destroying everything valued by a person educated by the ideas and behests of great Russian humanists.</p>
<p>In the XX century the fates of Russian people deprived of historic Motherland interlaced into curious patterns. While Leo fought in the Red Army his wife Irina together with small daughter Natasha found refuge from the war in the house of her father Fedor Reingard, a convinced monarchist who hated the Soviet power. His name went down in big letters into the history of pre-war Lithuania.</p>
<p>The noble Reingard family settled down in Lithuania in the early 18th century in the time of Rzeczpospolita near the town of Ukmerge where the they owned spacious land. All male representatives of the family were professional military men. They were Russian Germans loyal to Russia and the emperor. Fedor Reingard, a graduate from the Navy Academy in St. Petersburg, was no exception.</p>
<p>His life offers a script for an exciting novel about time and people. He fought in the Russian-Japanese war and was taken prisoner in Port Arthur although, according to peace treaty terms, he could have avoided captivity as an officer had he sworn to never fight against the Japanese. However he decided to share the fate of ordinary sailors. Fedor Reingard described his adventures in memoirs Short Life &#8211; Much Experience. Impressions of a Young Officer about War and Captivity which are valuable for Navy historians. He later served in the Baltic and Northern fleets.</p>
<p>A convinced monarchist he rejected the Bolshevik revolution, quit the command of a battleship and resigned. He said he witnessed &#8220;a complete collapse of the country in which I do not want to participate&#8221; He was insulted by the new rules in the Navy, senseless deaths of sailors and outrageous reprisals against officers. He wrote in his memoirs: &#8220;The Russian fleet participated in numerous battles and I saw many ships sink, but I do not remember a single case when an officer would rescue himself before all sailors were safe. The revolutionaries failed to stain the honor of Navy officers.&#8221;</p>
<p>He was naturally arrested for his convictions and had to be executed, but sailors who admired their commander saved him. He took his family to Ukraine from where he proceeded to Crimea together with the Volunteer Army of the White Guards. When Crimea fell to the Red Army he organized evacuation of the military and their families to Turkey aboard the Kronstadt transport ship.</p>
<p>In Turkey he made a boat to earn a living by fishing and transportation. In 1922 the Reingards returned to Lithuania and settled in Kaunas. Their natives land near Ukmerge was nationalized by the time. As an experienced professional Fedor was recruited into the Lithuanian army in the rank of lieutenant-colonel. He lectured Navy skills in Kaunas Technical School and later founded a joint-stock company engaged in cargo sea transportation. It was the first merchant marine in Lithuania which had two vessels. In the summer of 1940 the Soviet troops occupied Lithuania and Fedor Reingard was arrested and placed in custody in the 9th Kaunas fort where he again was waiting for execution. The offensive of German troops saved him and he found himself at large. The German occupation authorities proposed to him to head a Kaunas factory if he adopts German citizenship, but he refused. Educated in the best traditions of Russian army officers he remained honest and decent to himself in any situation. He did not understand and rejected both the Soviet power and Nazi order .</p>
<p>In the summer of 1944 the Soviet army liberated Lithuania and Fedor Reingard realized he would be definitely executed this time. He left the country alone (the family refused to leave) and died of a heart attack in 1947 in Bavaria. According to his will, he was buried at an Orthodox cemetery. He described the horrors of the civil war and the tragic turns of his life in memoirs. The manuscript was brought to Lithuania by a Lithuanian captain and a part of the book is kept in the Maritime Museum in Klaipeda. In 2000 some of the chapters were translated into the Lithuanian language. They were published under the title Navyman, Officer, Condemned Man.</p>
<p>Granddaughter Natalya of Fedor Reingard was born on the eve of the war and recollected the war life in the house of her granddad by the maternity line:</p>
<p>— I was very little at the time. When the war broke out the father went to Russia to fight the Germans. He participated in the Kursk and Oryol battles in the 16th Lithuanian Rifle Division and liberated Klaipeda region where he was several times wounded. But we did not know anything about him and lived with the granddad and grandma in a spacious house near Kaunas which the granddad built. We had a picturesque big garden planted by the granddad. Fedor Fedorovich was a strict man, but also a reasonable house master and a do-all man. I did not know what huger was during the war as the fruit and vegetable gardens fed us and not only us. The granddad lived on the upper floor and pretended not to interfere into female affairs. The mother and grandma sheltered several Jewish families in the basement. There were also Soviet soldiers who hid in the house from time to time. One of them, a Georgian, loved to play with me and said I resembled his sister. Many years later I received a present from Georgia: a silver spoon with To Natasha inscription. I also remember how together with the grandma we went through the fields to a POW camp. The grandma gave me a basket with bread. I came close to the barbed wire and put pieces of bread into stretched out hands. Naturally, there was not enough for all.</p>
<p>— As far as I understand, there were deep political contradictions in the family. Did they impede the life of the family?</p>
<p>— The granddad by maternity line was a convinced monarchist. The old-school grandma was from St. Petersburg where she received education and lived according to her outlooks. All her numerous brothers and sisters died in the Civil war between White Guards and the Red Army. The mother was not excited by the Soviet power, to put it mildly. The father joined the Communist Party during the war and responded to all mother&#8217;s remarks: &#8220;I made a deliberate decision and have no right to reject it.&#8221; In all other aspects the parents understood each other well and refrained from fanning conflicts because of personal convictions which every person has the right to have.</p>
<p><strong>Affection turned into profession</strong></p>
<p>After the war Leo Vladimirov worked in the republican planning committee which opened major career prospects for him. However one telephone call from the director of the Vilnius University who invited him to head the library of the institution changed everything. He immediately quit the well-paid job and headed the ineligible business. There were close to 30 confused staff who did not know what to begin with in a building with broken ceilings and ruined book stock by the Germans. The new director focused on training top quality librarians and bibliographers for the republic. Upon his initiative the university launched first a desk and in several years a department of librarians, the first in the USSR. Vladimirov compiled a training plan, gathered a team of lecturers, and himself lectured several courses in theory and history of library organization.</p>
<p>His main task was to restore and replenish library stock. The fate of the library of the Vilnius University which was closed by the tsar in 1832 after the 1830 Polish uprising was miserable. Most valuable books were transferred to educational establishments in Moscow, Petersburg, Kiev, Odessa. Various circumstances brought many books to Poland and Germany. Vladimirov wanted most of all to return to Vilnius the publications that belonged to the university and were kept in the Soviet Union. It was necessary to compile a preliminary list of withdrawn books for that and determine search directions. He made titanic effort and used his charm and diplomatic skills to fulfill his plans and convince those in power in Vilnius and Moscow to help.</p>
<p>Then Lithuanian Communist leader Antanas Sneckus supported the effort and the valuable Catechism by Martynas Mazvydas printed in 1547 was exchanged and returned from Odessa University to Lithuania. In the &#8217;50s of the last century the family did not practically see Vladimirov as he constantly traveled to find books from Lithuania and have them returned back. It is only natural that no book keeper would voluntarily part with his stock. Vladimirov was often barred from libraries as their directors knew it was sufficient for him to just have a look at the cover page to determine the origin of the book. Thanks to his effort the Lenin library in Moscow returned such rare publications as Catechism by Mikalojus Dauksa (printed in 1595) and the only surviving copy of Francis Skaryna&#8217;s Apostle printed in Vilnius in 1525. Under Vladimirov the university book stock increased by one million printed publications. He was the first librarian who launched exchange with European countries without a single ruble from the budget.</p>
<p><strong>A lesson to America</strong></p>
<p>In 1964 the United Nations announced a contest to hire the director of its new library in New York. There were 18 contenders from the United States, Canada, Japan, Hungary, and other countries. The chances of Vladimirov, a Russian from Lithuania and a Communist, were slim. The requirements were strict. However Vladimirov won not only because he was fluent in six languages but mostly due to his superior professional qualities. Professional circles in the world were well aware of his noble cause of returning lost treasures back home and called him &#8220;book catcher from Vilnius&#8221;.</p>
<p>He worked as the director of the UN library in New York from 1964 to 1970. He began with computerizing (!) the stock and replacing manual information processing by mathematical. Even in America not everyone understood at the time the necessity of using computers for search purposes. Vladimirov was convinced electronic library search had to provide access to all those wishing not only to the source of information (references to books and magazines) but directly to the information. Many library-goers complained that it took too much time to find a reference while librarians had to sort several thousand cards a day. Besides, affiliates of the library were scattered around the world and each of them had its own book registration system. Vladimirov developed the New York library into a guiding center of all UN libraries with a single computerized information system.</p>
<p>After his innovations the biggest in the world Library of the US Congress got an electronic catalogue and thus became accessible for everyone. In New York Vladimirov wrote a book about pioneer printer Francis Skaryna and held an exhibition in the library devoted to the outstanding personality of Belarussian culture. He prepared essays on the history of books and libraries in Lithuania from the 15th century up to 1917 which comprised the basis of his scientific thesis. He also considered it to be his duty to develop cultural ties with Lithuanian emigrants and constantly lectured in various American universities about cultural life in Lithuania.</p>
<p>Back in Lithuania he found out that the post of the director of the university library was occupied. Vladimirov was offered a similar post in Moscow in the Foreign Literature Library, as well as in Minsk. But he preferred to stay in Vilnius where for many years he headed the university desk of library organization and scientific information. He modestly called himself &#8220;only a librarian&#8221; but could foresee the possibilities and horizons provided by computer technologies.</p>
<p>His creative legacy comprises close to 400 works in various languages and fundamental works about pioneer printers Francis Skaryna and Ivan Fedorov. In 1988 his monumental work General Book History came out. Only the first volume was printed and he worked on the second one up to the end of his life. His heirs have the manuscript but unfortunately cannot have it published because of financial problems. Several Moscow publishing houses initially agreed however later postponed the publication for unclear reasons.</p>
<p><strong>He was not afraid of anything</strong></p>
<p>Natalya Vladimirova recalled that her father was a fearless man and always said the truth and advocated his opinion. He told his children: &#8220;Do not be ever afraid of anything. Let others be afraid and think you have some backup&#8221;.</p>
<p>She remembers that the father spent all the time at his working desk and children were strictly prohibited from interfering. He was a taciturn, but joyful and witty man. If the mother complained about naughty children and jokingly suggested to lash her madcap son Yuri he always responded: &#8220;I cannot do it today. I am kind today&#8221;. In general he entrusted the mother with upbringing of two daughters and the son. There was a deep spiritual relationship and full mutual understanding between the couple.</p>
<p>Sometimes he teased the wife by reading Mayakovsky verses which she disliked. When he saw she was angry he switched to Pushkin. But he was very attentive to her. When his wife was hospitalized he every day told her about a new episode of Santa Barbara soap opera which was aired on TV at that time. The mother passed away five years before the father died in 1999. He could not cope with the less. It seemed to the children he continued to live with his spouse and she was always present in his undertakings and work.</p>
<p>It is inspiring that Leo&#8217;s grandchildren continued his cause. They grew up in international families with a mixture of Lithuanian, Russian, and Jewish blood. Natalya&#8217;s daughter Nina works in the Russian literature department of the Martynas Mazvidas Library. Other grandchildren are software engineers and experts in information which is also close to the grandfather. Under his leadership over two dozen most talented students defended their theses. At a seminar devoted to Leo Vladimirov one of his students and the head of the rare book department of the university library Ina Kazuro admitted sadly there are no people of Vladimirov&#8217;s scope, true patriots of Lithuania in the modern history of the country. It remains to wait and see. . .</p>
<p>Galina Afanasyeva,</p>
<p>for Amber Bridge</p>
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		<title>EASTERN BALTIC SEA UNDER VOLTAGE</title>
		<link>http://en.abfund.org/?p=29</link>
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		<pubDate>Mon, 28 Jul 2014 15:26:26 +0000</pubDate>
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				<category><![CDATA[№1 (9) 2013]]></category>
		<category><![CDATA[Energy]]></category>
		<category><![CDATA[Estonia]]></category>
		<category><![CDATA[Latvia]]></category>
		<category><![CDATA[Lithuania]]></category>

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		<description><![CDATA[The energy sector of the eastern coast of the Baltic Sea offers a mirror that reflects problems and achievements in power engineering in the European Union in general. Those capable of forecasting the need in that or another type of energy and supplying it to consumers at optimal prices reap the fruit of their effort today. [&#8230;]]]></description>
				<content:encoded><![CDATA[<p>The energy sector of the eastern coast of the Baltic Sea offers a mirror that reflects problems and achievements in power engineering in the European Union in general. Those capable of forecasting the need in that or another type of energy and supplying it to consumers at optimal prices reap the fruit of their effort today.</p>
<p>The energy situation in three post-Soviet Baltic countries differs from each other. Latvia has fully exhausted the resources of the major Daugava River in the region as nothing can be added to the existing cascade of hydropower plants there. Estonia generates power at Narva hydropower plant and heat plants and also receives electricity from Finland. Experts call for the construction of a liquefied gas terminal. Lithuania shut down the Sovietbuilt nuclear power plant and there is talk about the construction of a new one. It seems Lithuania lags behind the cherished dream of energy independence most of all.</p>
<p>How can the goal be achieved?</p>
<p><strong>Green, but unprofitable</strong></p>
<p>&#8220;Green&#8221; energy and co-generation (combined production of electricity and heat) are the most promising types of energy. It is disappointing that the &#8220;green&#8221; energy support system, say in Latvia, is branded as &#8220;political business&#8221;.</p>
<p>The country remembers the recent story of the construction of small hydropower plants which &#8220;accidentally&#8221; got into the hands of the wives of high-ranking state officials. Today any production of bio energy is also linked in Latvia to businessmen who are close to authorities. One cannot but agree with Economy Minister Daniels Pavluts who called for reforms and transparent energy management system.</p>
<p>The economy ministry submitted to the government its initiatives aimed at introducing new transparent and efficient standards of support to renewable sources of energy and cogeneration. The EU works to increase the share of renewable energy in the total power end-use to decrease reliance on fossil fuel. Latvia has pledged to achieve 40% of renewable energy in the total balance by 2020. &#8220;I am convinced it is an important goal and we have to support alternative energy producers. However economic growth possibilities and improved wellbeing of people cannot be sacrificed for the sake of statistical indicators. We cannot allow Latvia to preserve inefficient and nontransparent system under the cover of movement towards the conditional EU goal. The system has already created a new elite of green speculators at the expense of the taxpayer,&#8221; the economy minister said.</p>
<p>The obligatory purchase principle is currently in force in Latvia to support &#8220;green&#8221; energy producers: Latvenergo utility has to pay for renewable energy and co-generation much more than the market price. The difference is paid by all end-users, i.e. by every resident of the country.</p>
<p>What is to be done in the situation?</p>
<p>Naturally, cost efficiency of production has to be improved and the policy of endless subsidies has to be gradually abandoned. Lithuania and Denmark guarantee support to electricity producers for ten years, Hungary &#8211; 8, Estonia provides its current 7-year discounted tariff to the plants operating with biomass and hydro energy. There is no other country in the EU besides Latvia that provides unlimited support to renew able energy.</p>
<p>&#8220;I hope that in 2020 when we assess the implementation of the National development plan we shall state that the dream about green, economically feasible and competitive Latvia has come true and was no disappointment,&#8221; said optimistic Daniels Pavluts.</p>
<p><strong> Vysaginas sword</strong></p>
<p>There is also atomic power besides alternative energy sources. The construction of the Vysaginas NPP is on the Lithuanian agenda. Initially it was planned to engage neighboring countries in the construction but Poland and Estonia delicately refused. The Latvian position remains unclear.</p>
<p>Visaginas is said to be very lucrative for Latvia, however nobody has provided any convincing evidence. Politicians and their close businessmen claim the co-ownership of the plant will provide cheap electricity to Latvian consumers. However nobody explains how it is possible to buy electricity below market prices. There is no answer how the used nuclear fuel will be disposed of. Who and where will keep it? The hypothetic Latvian billion euro suggested for investment into Vysaginas NPP can be used for other guidelines.</p>
<p>&#8220;Latvia has to invest a billion euro not into Lithuanian economy and the construction of Vysaginas NPP, but into its own economy,&#8221; said President of the gas company Itera Latvija Juris Savickis. Although he represents competing industry he supports not only the construction of Vysaginas NPP but also the nuclear power plants in Belarus and Kaliningrad enclave of Russia. But he insists Latvia has to limit itself by bids for partial assignments in the Vysaginas projec which will be fully controlled by Lithuania and the strategic partner &#8211; the Japanese Hitachi Corporation.</p>
<p>The nuclear project in Vysaginas is not just a power plant. It is a major and profitable project for Lithuania which will push the ailing economy from the deadlock. &#8221; I know the neighbors and have no doubt that most orders for the NPP will remain in Lithuania and that Lithuanians will win the tenders. Everything which Lithuania is capable of producing for the NPP will be made in the country. Naturally, Lithuanians cannot make the turbine while uranium will be supplied by Americans who cooperate with Hitachi,&#8221; Savickis said. Who will control the whole project? Lithuanians and Hitachi. However Vilnius is interested in getting the Latvian billion euro. . .</p>
<p>What can Latvia build with the billion? For example, a big gas storage in Dobele and its own liquefied gas terminal. It is an expensive project but it will be owned by Latvia. The billion can be invested into &#8220;green&#8221; power. Besides power engineering there are related industries which need investments.</p>
<p>It is also important that Lithuanians did not support the NPP project at a consultative referendum held together with parliamentary election. The NPP was backed by 34.09 percent of voters while 62.68 were against.</p>
<p><strong>Gas puzzle</strong></p>
<p>Baltic countries have no commercial gas reserves and buy the fuel in Russia. In seven months of 2012 Latvia imported natural gas worth 400 million dollars which is a 24.5 percent increase against the same period in 2011, the central statistics service of the country said.</p>
<p>Gas to Latvia is imported by the Latvijas gāze Company which pumps it into the Incukalns storage and then delivers it to Latvian, Estonian, Russian, and Lithuanian consumers. Gas to Latvia is supplied by Gazprom and Itera Latvija which is a part of the international Itera Group. In 2011 the supplies were worth over 200 million dollars or 52.2 percent above the 2011 figure. Profit exceeded 16 million dollars and was 60.9 percent above previous indicators, according to the financial statement of the company.</p>
<p>Lithuanian Energy Minister Jaroslav Neverovic said his country wants to ensure competitive gas prices at talks with Gazprom. Key to the aim is the construction of a liquefied gas terminal. Lithuania wants to build it in Klaipeda in order to supply also Latvia and Estonia. Latvian experts believe it is more profitable to build the terminal in Latvia as it already has developed infrastructure and an underground storage in Incukalns. There is also a good site for a new storage on the border with Lithuania. According to research, the storage can decrease Baltic reliance on Gazprom from 100% to 59%.</p>
<p>There are alternative points of view in the dispute about the liquefied gas terminal. Thus, the Booz&amp;amp;Company consultancy believes it is more profitable to build it in Estonia or Finland rather than in Lithuania or Latvia.</p>
<p><strong>Shale gas </strong></p>
<p>The basic technology of shale gas production was borrowed by the Americans from Nazi Germany which had no oil and had to learn how to produce synthetic petrol from coal.</p>
<p>In Europe shale gas resources in-place are estimated between 19.4 and 91.4 trillion cubic meters. Extractable reserves are estimated at 15 trillion cubic meters. The U.S. Energy Information Administration puts the figure at 22.6 trillion.</p>
<p>The main shale gas deposits are located in northern Germany, France, Great Britain, Norway, Sweden, Poland, Ukraine, and Baltic countries while extractable reserves of the shale gas, according to the estimates of the U.S. administration, are accumulated in Poland (6.6 trillion cubic meters), France (6.4), Norway (2.9), Ukraine (1.5), Sweden (1.4), Denmark (0.8), and Great Britain (0.7 trillion cubic meters).</p>
<p>Main shale gas, gas and coalbed methane basins in Europe.</p>
<p>The estimates made over 40 countries prospect for shale gas in Europe close to consumption areas which minimizes transportation costs. They include Shell, Chevron, Exxon Mobil, Conoco Phillips, OMV, Halliburton and other giants. Poland, Hungary, Sweden, Spain, France, and England are experiencing a genuine shale gas boom triggered by the hope to repeat American shale gas revolution.</p>
<p>However there are skeptical voices as well.</p>
<p>Head of the British energy regulator Office of Gas and Electricity Markets Alister Buchanan said shale gas production was unlikely to begin in Europe earlier than 2025 and production volume can reach 15 billion cubic meters by 2030. BP estimated total European production of all nontraditional gas (shale, coalbed methane, etc) at 50 billion cubic meters by 2030. Therefore, imported gas will continue to play a major role in supplies for a long time. BP estimated it will account for 75 percent of gas consumption in the EU by 2030. Over a half (nearly 60%) will be supplied by pipelines.</p>
<p>Latvian scientists are in general skeptical about shale gas production in the country. However some politicians promise &#8220;to liberate&#8221; Europe from Russian natural gas at the expense of Latvian shale gas.</p>
<p>Latvian geologist Lyudmila Kartunova said Latvia is rich in all elements of the Mendeleev table. However, the entrails, like in most European countries, differ in structure from North America. It might be cheaper to fly to the Moon for some natural resources than produce them at home.</p>
<p><strong>No sensations</strong></p>
<p>Latvia plans to have a half of renewable energy in its balance by 2030. &#8220;At present Latvia produces first-generation biofuel from rape and grain. Production will continue for some time however the products do not satisfy durability criteria. Transition to second or even third generation of biofuel is expected by 2030. In 2017 Latvia may get a refinery to produce biofuel from wood,&#8221; said State Secretary of the Latvian economy ministry Juris Putse.</p>
<p>Properly purified rape seed oil used to produce biofuel is also suitable for food consumption although it depends on personal taste. Unfortunately, over a half of all fields in Latvia continue to grow the beautiful but very harmful plant for agriculture.</p>
<p>What do Baltic countries have to do to ensure energy independence? Anyway they shall not expect sensational solutions.</p>
<p>For example, Latvenergo plans to reconstruct the cascade of Daugava hydroelectric power plants by 2021 and replace all 21 turbines to increase their capacity. By now eight out of ten turbines of the Plavinas hydropower plant and four out of seven turbines of Keguma plant have been reconstructed. Investments exceeded 200 million dollars but will generously repay.</p>
<p>Prospects to reduce prices are offered by the planned construction of three nuclear power plants which is too many for the small region.</p>
<p>Wind turbines are promising on the sea coast.</p>
<p>What else? There are forests and marshes, wood and peat. However firewood would hardly keep the region warm.</p>
<p>&nbsp;</p>
<p>Valery Zaitsev,</p>
<p>Valery Gorbov,</p>
<p>for Amber Bridge</p>
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