Even prior to Russia’s invasion of Crimea, energy security was a hot buzzword in Europe. But while many of the continent’s leaders frequently called for reduced dependence on Russia and greater diversification of energy supplies, practical progress on the issue was slow. The Ukraine crisis, however, has brought new momentum for a concerted push towards energy security. Talk of an “energy union” now surfaces high on the political agenda in Brussels, along with proposals for several infrastructure projects to connect Europe’s disjointed energy networks and build away bottlenecks. Read more
By Mike Collier of bne in Riga
With the Russian military heading westwards in a move similar to the ”invited annexation” that saw Estonia, Latvia and Lithuania lose their independence in 1940, it’s hardly surprising the Baltic states are watching events in Ukraine’s Crimea warily. Upcoming elections and a controversial parade to honour soldiers who fought alongside the Nazis will create plenty of flashpoints in these countries with large ethnic Russian minorities. Read more
Rumours have been rife in Vilnius for months that PKO BP, Poland’s state-owned bank, the country’s biggest, is preparing an entry into Lithuania’s banking sector.
Should we take the rumours seriously? Read more
A mixed picture for the prospects of an economic recovery emerging Europe, according to Monday’s forecast from the European Bank of Reconstruction and Development.
The EBRD found that the more advanced countries of central Europe will probably do a bit better than expected next year, while the rest of the post-communist region is sputtering. Read more
Chevron, the US oil major, has decided to pull out at the final stage of a tender for shale gas exploration and production rights in Lithuania, in what is a big blow to the country’s efforts to reduce its dependence on energy imports from Russia,
The decision was hardly a surprise. But it may prompt Lithuania to revise new regulations that contributed to Chevron’s decision. Read more
Onishchenko: he say no
Yet another conflict is brewing between Russia and one of its post-Soviet neighbours.
On Monday Russia’s consumer protection agency announced it had halted dairy imports from Lithuania, citing excessive quantities of yeast and mould in certain Lithuanian dairy products after weeks of holding up Lithuanian transport trucks for longer than normal periods at border control. Read more
The European Commission has upped the stakes in its ongoing face-off with Vladimir Putin’s Russia. On Wednesday it told Russian border guards to stop “punitive” searches of cars and lorries crossing the Lithuanian border. An EU customs official said that if Russia did not give a satisfactory answer, the EU would go to the World Trade Organisation. Read more
Shale gas and oil have more than usual appeal for Lithuania, where the government is eager to reduce its dependence on imports from Russia.
But a combination of environmental protests and government plans to hike royalties to the highest level in the world are creating daunting obstacles to investment. Chevron, the US oil major, could be the first to baulk at the new barriers. Read more
When your neighbours’ aviation businesses are struggling to survive, you would, probably, postpone the launch of a new carrier in your own country. But Lithuania has proved that it is ready to take a risk. Newly established commercial carrier Air Lituanica has started operations with flights between Vilnius and Brussels. Read more
Time to loosen those belts, as the European Commission let a host of CEE countries out from under its excessive deficit procedures – evidence that Brussels is keen on boosting growth.
Hungary, Romania and Latvia were allowed to exit the EU’s excessive deficit procedure, which they had been put into for running deficits above the permitted threshold of 3 per cent of GDP. More mixed news from Poland, which gained an extra two years to bring its deficit into line with requirements. Read more
Most clients of the failed bank, Ukio Bankas, Lithuanian sixth-largest lender by assets, received some good news this week – they can access their bank accounts once more.
It was the latest development in the rapid rescue of the operations of Ukio by Siauliu Bankas, the country’s seventh-largest bank, and a clear sign that Lithuanian banking has been stabilised after the upheaval. Read more
Lithuania’s central bank is moving quickly to clear up the country’s latest banking collapse after Ukio Bankas, the country’s sixth-largest lender by assets, was declared insolvent and had its licence terminated.
It is seeking buyers for Ukio’s operations, after its activities were suspended and an interim administrator appointed. Siauliu Bankas, one of Lithuania’s ten biggest banks, is the main contender to take over the assets, rights, transactions and liabilities. Read more
Economic growth of 3 per cent in the eurozone? It sounds like a statistical error at a time when the common currency area is braced for a 0.4 per cent drop. But Estonia is set to record a 3 per cent expansion in 2012, nearly double the government’s forecast at the start of the year. And officials expect another 3 per cent in 2013.
Much of this is a rebound from the extra-severe shock that passed through Estonia and the other two Baltic states of Latvia and Lithuania in 2009 when Estonian GDP dropped by a cumulative 18 per cent. Read more
Nuclear power has long held the possibility of energy independence for central Europe, freeing it from its heavy reliance on imports of Russian natural gas. But a series of political and corporate decision across the region in the last few days leaves the future of atomic power murkier than ever. Read more
Bulgaria (and France) may have moratoriums on it, lawyers may make a mint on it, Gazprom chiefs may curse it, and wells may cost three times the US price to get at it – but shale gas development in central and eastern Europe is “inevitable” in the next decade.
So says KPMG in a recent report – highlighting Poland, Romania, Ukraine, and to a lesser extent, Lithuania, Hungary and Bulgaria – as the main countries set to benefit from what the professional services firm says are the “fantastic opportunities, lying beneath peoples’ feet.” Read more
The mood turned sour again on European markets on Monday, as fresh worries about Greece rattled investors’ nerves. But that didn’t stop Lithuania getting a one-year bond auction away at a pretty impressive yield, on the day the country said its economy grew by a healthy 4.3 per cent last year.
Nevertheless, a glance behind the headline figures suggests that even where things look cheerful, investors should be cautious. Read more
These are desperate times and central banks all over the world are turning to extraordinary measures to pump liquidity into ailing banking systems. Lithuania’s central bank is no exception. On Tuesday it sent a clear signal to its banks that it is ready to act if needed. Read more
The Czech economy contracted in the third quarter, falling by 0.1 per cent compared to the second as all elements of demand slowed, according to the central bank. This was the Republic’s first contraction since 2009. A recession, technically two consecutive quarters of GDP contraction, could be just around the corner.
Beyondbrics has taken a look at how its neighbours are faring – and how much they all depend on exports to the EU. The prognosis is not great. Read more
Another European bank in need of a rescue. This time it’s a small bank in a small country but the Lithuanian government’s surprise decision to take control of Bank Snoras will have officials elsewhere redoubling checks on their own institutions.
Vilnius insisted on Thursday its banks were safe after the state’s takeover on Wednesday of Lithuania’s fifth-largest bank by assets. The authorities acted after finding an alleged hole of 1bn litas ($392m) in the bank’s balance sheet. Read more