December 2016 | Lithuanian Embassy Newsletter 1

NEW LITHUANIAN CABINET SWORN IN AMID

GROWING SOCIAL AND DEFENSE CONCERNS

The new cabinet led by a young and charismatic Prime Minister Saulius Skvernelis has been sworn into office following the surprise election victory of his Far-mers and Green Union Party (LFGU) earlier in October.

The new government secured a confidence vote in the parliament on 13 December, with the backing of 86 lawmakers (out of 141), three no votes and 40 absten-tions, as defense concerns and social issues topped the agenda in the eurozone country that is also a member of the NATO military alliance.

The 46-year-old prime minister, who formerly ser-ved as police chief and interior minister, leads a coali-tion of his LFGU party and the junior Social Democrats after scoring a landslide victory in October, promising his predominately rural voters to invest more in the rgions, rein in the alcohol consumption, and approve a child subsidy plan, among other things.

His cabinet has also vowed to battle social inequality and stop emigration to more prosperous Western Euro-pean nations.

“We want our social inequality index to reach the EU average,” said Skvernelis while addressing the parlia-ment, noting that Lithuania was third or fourth worst within the EU in this respect.

The emigration from Lithuania – a lot of it to Ireland and Britain – emerged as a major campaign issue in the election after the country’s population declined from 3.5m in 2001 to 2.9m in 2015 amid concerns of even further reductions.

While Skvernelis led the LFGU list into the election, he has not joined the party. Many of his ministers are not party members either. The analysts therefore raise questions if the executive-legislative cooperation will remain smooth and efficient in the long run.

Meanwhile, the Conservatives and the Liberals who remain in opposition have insisted that Skvernelis lacks a strategy to encourage much-needed investment in the newest eurozone member. Lithuania has switched to the euro since 1 January 2015.

“The lack of ambition poses the threat that the Lithuanian economy will fall into the middle-income trap,” said conservative ex-premier Andrius Kubilius.

In economic theory, the middle-income trap refers to a situation in which a country, having exhausted its competitive advantage coming from its natural resources and cheap labor force, fails to move into new, higher-value-added areas of economic activity and thus catch up with the higher-income nations.

Lithuania reached 75% of the EU average in GDP per capita terms in 2015 and seeks to be among the richest ten in the next ten years.

Skvernelis has dismissed these accusations as biased and also vowed to meet NATO’s two-percent-of-GDP funding target by 2018, to ensure NATO’s full support in the face of growing Russian aggressiveness in the region.

Source: presstv.ir Photo © Delfi.lt

LITHUANIA PASSES 2017 BUDGET,

BOOSTING DEFENSE SPENDING

Lithuania’s parliament voted on 22 December to postpone the goal of a balanced budget in 2017, in part

NEWSLETTER DECEMBER 2016

December 2016 | Lithuanian Embassy Newsletter 2

to boost defense spending amid tensions with neigh-boring Russia.

Lawmakers approved a budget which envisages a 25% increase in defense spending to EUR 723.5m, or 1.8% of GDP. Since 2014, when Russia illegally annexed the Crimean Peninsula of Ukraine, Lithuania has incre-ased its defense spending by about a third every year.

The NATO member state will increase defense spen-ding to 2% of GDP in 2018, to meet the defense allian-ce’s target, Prime Minister Saulius Skvernelis told Reuters.

Lithuania’s government revenues in 2017 are expec-ted to reach EUR 12.35bn and total expenditures EUR 12.63bn, resulting in a deficit of 0.7% of GDP.

Next year’s projected deficit will be higher than this year’s expected shortfall of 0.6% of GDP, partly because of damage to exports due to uncertainty over Britain’s decision to leave the European Union, the Finance Mi-nistry said.

“I hope that we will reach a balanced budget until 2020,” Skvernelis said to the lawmakers.

Lithuania’s central bank, however, expressed con-cerns about possible repercussions from the govern-ment decision to drop its previous goal of balancing finances in 2017.

“We think that the postponement of earlier goals might have a negative impact on evaluation of country’s economy and its economic policy,” the central bank’s governor Vitas Vasiliauskas said in a note to the parlia-ment.

Lithuania is set to borrow about EUR 3.2bn next year, of which 1.75bn will be raised in foreign markets.

Source: Reuters

THE NEW GOVERNMENT WILL SEEK TO

ENCOURAGE PUBLIC-PRIVATE PARTNERSHIPS

Improving public sector efficiency and cutting red tape feature among the key priorities of the newly in-stalled Lithuanian cabinet.

Public-Private Partnership (PPP) is singled out as a key instrument to reach these goals. The Government plans to integrate PPP schemes more deeply into its long-term investment plans at both state and municipal levels.

The PPP environment in Lithuania has enjoyed strong support under the previous two administrations. To this date, three PFI type pilot projects and over 40 concessions, mainly in the central heating and leisure sectors, have already been signed. There are strong

signs that this PPP framework will be continued by the new cabinet.

The current pipeline is largely dominated by Trans-port projects, with at least EUR 300m of investment expected into Lithuanian airports and A14 National Highway reconstruction projects. It is believed that the adoption of the new concession law will help contribute to a greater PPP activity in the future.

Lithuania, like many countries in the region, faces a growing demand for public infrastructure and services. Hence, many Central and Eastern European govern-ments are using PPP schemes to stimulate their econo-my and deliver the investments that are needed to close the infrastructure gap.

Source: Invest Lithuania

LITHUANIAN BUSINESS DELEGATION

ATTENDS IE29BF BUSINESS FORUM

A seven-member business delegation from Lithua-nia attended the 3rd edition of India-Europe 29 Busi-ness Forum in New Delhi on 8-9 December.

Lithuanian companies representing such sectors as wholesale trade in fuel oil and other petroleum pro-ducts, manufacturing of faucets and related goods, and development and maintenance of printing equipment, met with their Indian counterparts at a two-day event organized jointly by MEA and FICCI.

The trade potentials between India and its 29 partners in Central, Northern and Southeastern Europe are “vastly under-explored,” said Gen. V.K.Singh, Mini-ster of State for External Affairs, Government of India, at the inaugural session.

Indeed, Indo-Lithuanian trade has shown steady growth over the last two years, expanding up to EUR 100m in 2015 and crossing the EUR 100m benchmark already in October this year.

Lithuanian companies have found new attractive markets in Indian agriculture, chemicals, and (traditio-nally) sophisticated laser machines. Meanwhile, Indian ventures actively export fish, machinery and footwear to Lithuania.

The delegation, led by Mr. Gediminas Citukas, Presi-dent of India-Baltic Chamber of Commerce (IBCC), also met with the Lithuanian Embassy members and discussed business opportunities in India.

December 2016 | Lithuanian Embassy Newsletter 3

India-Europe 29 Business Forum is a signature trade and investment promotion event by the Ministry of External Affairs, Government of India, and Fede-ration of Indian Chambers of Commerce and Industries (FICCI).

It aims at facilitating business contacts between India and 29 countries covered by MEA’s Central Europe Division.

Source: Embassy of Lithuania

LITHUANIA EUROPEAN LEADER

FOR 4G COVERAGE

New analysis on 4G coverage around the world has ranked Lithuania first in Europe and third globally for 4G internet coverage.

The OpenSignal project, which measures access to services provided by mobile operates, found that 84.73% of Lithuania has access to 4G internet coverage, the highest level in Europe.

According to data from the project, the Netherlands and Norway rank second and third in Europe, with coverage of 84.1% and 82.42% respectively.

In terms of the other Baltic states, Estonia ranked seventh in Europe, with 4G coverage available across 75.11% of the country.

Globally, only South Korea (with 95.71% 4G cove-rage) and Japan (with 92.03%) ranked ahead of Lithua-nia in terms of 4G coverage. Lithuania came in third, well ahead of its regional neighbors. Estonia was the only other country from the region to make the global top twenty, ranking in the 18th place.

Source: Invest Lithuania

SURVEY: WHAT DO LITHUANIANS EAT?

As most European countries enter their festive sea-son marked by Christmas illuminations and countless private and corporate Christmas dinners, Lithuania’s largest retail chain Maxima has published its survey of Eating Habits by Lithuanians, the largest Lithuanian online daily Delfi.lt reports.

The survey is based on opinion polls conducted among Maxima’s customers and the retail chain’s actual sales over the last three years. It shows that eating habits in Lithuania are gradually changing, with people moving towards healthier food.

True, fresh fruits and vegetables Lithuanians eat mostly during the weekdays. Weekends are still satura-ted with time-honored calories-rich food.

So what is the daily diet of a statistical Lithuanian? First, a true Lithuanian cannot imagine his or her

day without a breakfast. 95% of all respondents admit-ted they have breakfast on a daily basis, with 87% fixing their breakfast at home. Eggs (58%), cheese (52%) and traditional “black” rye bread (47%) are the key com-ponents of a Lithuanian morning meal. 62% start their day with a cup of freshly brewed coffee and only 31% choose to have tea.

Second, the lunch still largely depends on home-made food, although the pattern is changing quickly. Almost half of the respondents said they carry their lunch-boxes to the office from home and only 25% prefer to lunch out. 48% said soups and vegetables are their primary choice. Interestingly, during the week-ends Lithuanians prefer to have their daytime meals at home, with 48% indicating this was their regular rou-tine. Here, the diet becomes heavier, with roasted pork (29%), Lithuanian traditional meat-and-potato dump-lings cepelinai (18%) and various avatars of potato (17%) dominating the weekend menu.

Third, 96% of the respondents admitted they do have dinners, mostly at home. But the variety of dinner food is shifting towards lighter and easy-to-digest products, such as veg salad (28%), curd, dahi and other dairy products (16%). The weekend dinner menu is defined by pancakes (25%), meat products (18%), curd (15%) and soups and stews of all kinds (12%). 10% said their dinner is hard to imagine without the queen of Lithuanian cuisine, potato.

The good news is that Lithuanians are increasingly aware of what and how much they eat. Thus, 15% try to limit their daily intake of food, 9% use less or no sugar, 8% try to consume as much of fresh water as possible. 61% has stated they plan to review their eating habits in the near future.

The survey sample included 503 respondents from different parts of Lithuania.

See full unabridged article here (in Lithuanian) Source: Delfi.lt

December 2016 | Lithuanian Embassy Newsletter 4

UNIQUE CHRISTMAS TREE

DECORARED WITH 50,000 LIGHTBULBS

OPENS FESTIVE SEASON IN LITHUANIA

A unique and gigantic Christmas tree was inaugura-ted in the capital city of Vilnius on 26 November, kick-ing off a chain of similar events throughout the country during December.

The Christmas tree, installed on the Cathedral Squa-re, the main public ground of the city, represents a 27-meter-tall and 50-meter-wide (at the bottom) construc-tion carrying a net of 50,000 lightbulbs over it.

The view generated by this design and especially its illumination is so spectacular that The Guardian, the UK’s one of the largest dailies, has nominated it as “the world’s most beautiful.”

It has also been mentioned among the world’s “most breathtaking, inspiring Christmas trees of 2016” by the US online news aggregator The Huffington Post.

The Christmas tree in Vilnius exudes so much light that it can be easily spotted from the air by anyone flying in or out of the city.

Christmas trees have also been installed in the other cities like Kaunas, Klaipėda, and Šiauliai. The Christ-mas tree of Šiauliai, by the way, was elected as the nation’s second most beautiful Christmas tree this year.

Šiauliai Klaipėda

Kaunas Panevėžys

Source: Bored Panda, Delfi.lt Photos © Delfi.lt

TRADITIONAL CHRISTMAS TREE

ILLUMINATED AT THE EMBASSY

Keeping up in tune with the rest of the country, Lithuanian Embassy in New Delhi inaugurated its Christmas tree on 17 December.

The event was honored by Santa Claus who arrived with his loyal aid Snow White. All kids, representing mainly Lithuanian, Latvian and Indian communities, received their much-awaited gifts from Santa.

The ceremony has been organized since 2013, with its 4th edition coming this year. To Santa’s joy and satisfaction, the number of participants has been growing steadily. Thus, if the Embassy’s first Christmas party in 2013 had less than 10 kids present, this year it was attended by almost 20 juniors.

The Embassy takes this opportunity to thank its friends and collaborators for being with us during the year and wishes all the best in 2017.

Source: Embassy of Lithuania

THE EMBASSY EXTENDS ITS MOST SINCERE

SEASON’S GREETINGS TO THE READERS OF

THE NEWSLETTER!

SEE YOU IN 2017!