THE VOICE OF INTERNATIONAL LITHUANIA
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Lithuanian President Dalia Grybauskaitė with the
Ambassador of Iceland, Elin Flygenring.
The Icelandic government failed to convince its own citizens in the elections this weekend, and the conservative opposition claimed poll win as voters returned parties that ruled over 2008 financial collapse back to power.
But the present Icelandic government has, nevertheless, something important to teach the eurozone, according to an Icelandic economics professor.
While droves of businesses have had to close its doors in Euro cities like Rome and Athens, the business community in Reykjavik avoided mass death. But it could have gone differently, says economics professor Thórólfur Matthíasson at the University of Iceland.
He has called the crisis that hit Iceland in 2008, the perfect storm. A financial sector ten times larger than Iceland's GDP collapsed. The Icelandic krona lost over half the value. Inflation rose far and fast.
Up to 90 percent of Icelandic companies were in danger of getting bankrupt, but many of them could point to future, long term opportunities. The solution Iceland chose, and Matthíasson participated in, was to facilitate the corporate debts.
Both government, banks and individuals went into talks about impairment. The result was win-win, says Matthíasson.
Banks got customers who could handle their debts. Businesses avoided extensive closures. Icelanders avoided unemployment and social deprivation.
- The banks could have pushed for bankruptcy in many companies, but have instead really done their very best to look for common sense in the matter, says the economics professor.
Lithuanian President Dalia Grybauskaitė with the Ambassador of Iceland, Elin Flygenring.
The Icelandic government failed to convince its own citizens in the elections this weekend, and the conservative opposition claimed poll win as voters returned parties that ruled over 2008 financial collapse back to power.
But the present Icelandic government has, nevertheless, something important to teach the eurozone, according to an Icelandic economics professor.
While droves of businesses have had to close its doors in Euro cities like Rome and Athens, the business community in Reykjavik avoided mass death. But it could have gone differently, says economics professor Thórólfur Matthíasson at the University of Iceland.
He has called the crisis that hit Iceland in 2008, the perfect storm. A financial sector ten times larger than Iceland's GDP collapsed. The Icelandic krona lost over half the value. Inflation rose far and fast.
Up to 90 percent of Icelandic companies were in danger of getting bankrupt, but many of them could point to future, long term opportunities. The solution Iceland chose, and Matthíasson participated in, was to facilitate the corporate debts.
Both government, banks and individuals went into talks about impairment. The result was win-win, says Matthíasson.
Banks got customers who could handle their debts. Businesses avoided extensive closures. Icelanders avoided unemployment and social deprivation.
- The banks could have pushed for bankruptcy in many companies, but have instead really done their very best to look for common sense in the matter, says the economics professor.
- Firms are left with the maximum debt burden they can bear, but without getting any gift of money from the banks, he maintains.
Something similar was done for a number of individuals and families who were in danger of bankruptcy, often with debts of 110 percent of the value of their properties written down.
- It has helped those who bought when house prices were at their highest, says Matthíasson.
- In this way we avoided that a bad situation became even worse. It is the Icelandic way, he says and believes many European governments and creditors would do well to study this direction of choice.
But there are still many families who are struggling under a heavy debt burden, and Icelanders are tired of the harsh emergency. Saturday voters punished governing parties in everything choice.
While several European countries still are struggling with recession, Iceland is again growing. Matthíasson is optimistic on the economy's behalf.
- We work a lot more than the average Norwegians and Danes, but by working more, we have managed to keep up the standard of living. And we should not forget that unemployment is at 4-5 percent, which is far below what is the case elsewhere, says the economics professor.
- The conditions are there, the question is whether we have the sense to do the right thing out of it, he says and thinks bad management could cost much.
Iceland, five years after the crisis continue strict capital controls, which puts severe limitations on industry opportunities abroad.
There is no normalization in sight as long as capital controls are there. And there's no good plan for how it will be removed, according Matthíasson and think it's going to stay like that for years.
- If we do not enter currency cooperation with others, it will take us a very long time. All in all, this will be a project of 20 to 30 years. We may not have as strict capital controls at the end of the period, but the first ten years certainly, he says.
For the past five years, a fierce war of words and policies has been fought in America and other economically challenged countries around the world.
On one side were economists and politicians who wanted to increase government spending to offset weakness in the private sector. This "stimulus" spending, economists like Paul Krugman argued, would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.
On the other side were economists and politicians who wanted to cut spending to reduce deficits and "restore confidence."
Government stimulus, these folks argued, would only increase debt loads, which were already alarmingly high. If governments did not cut spending, countries would soon cross a deadly debt-to-GDP threshold, after which economic growth would be permanently impaired. The countries would also be beset by hyper-inflation, as bond investors suddenly freaked out and demanded higher interest rates. Once government spending was cut, this theory went, deficits would shrink and "confidence" would return.
This debate has not just been academic.
Those in favor of economic stimulus won a brief victory in the depths of the financial crisis, with countries like the U.S. implementing stimulus packages. But the so-called "Austerians" fought back. And in the past several years, government policies in Europe and the U.S. have been shaped by the belief that governments had to cut spending or risk collapsing under the weight of staggering debts.
Over the course of this debate, evidence has gradually piled up that, however well-intentioned they might be, the "Austerians" were wrong. Japan, for example, has continued to increase its debt-to-GDP ratio well beyond the supposed collapse threshold, and its interest rates have remained stubbornly low. More notably, in Europe, countries that embraced (or were forced to adopt) austerity, like the U.K. and Greece, have endured multiple recessions (and, in the case of Greece, a depression). Moreover, because smaller economies produced less tax revenue, the countries' deficits also remained strikingly high.
So the empirical evidence increasingly favored the Nobel-prize winning Paul Krugman and the other economists and politicians arguing that governments could continue to spend aggressively until economic health was restored.
The economy of Lithuania is expected to reach $57.3 billion by 2018. Economic growth of the country declined in the wake of economic crisis, but recovered impressively due to factors such as government stimulus packages and export growth. Slow growth rate was mainly caused by service sectors as construction, real estate, and financial intermediaries witnessing low productivity against increasing labor costs.
Lithuania is lagging behind Europe’s leading economies in terms of economy size and per capita income.
The study reveals that Lithuania is extremely dependent on trade with other European countries. Hence, change in the external demand may affect the economic situation.
Secondly, the population in Lithuania has been constantly decreasing over the last decade, as young people are emigrating to other countries for jobs and better livelihoods.
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SMALL IS THIS LAND,
But great is its truths. To be. To survive. To testify by itself to the abundance and variety of the world’s nations, to the value of man’s life in freedom in his homeland.
PAINFUL IS THIS LAND,
Each blade of grass here sprouts from a drop of blood or a tear.
TOILFUL IS THIS LAND,
In the sandy soil of a hillock it grows both grain and graves marked with crosses.
BRAVE IS THIS LAND,
It went from uprising to uprising, from exile to exile, from deportation to deportation. A great number of its people were laid to rest in the permafrost of Siberia, some of their bones were flown back to their native soil, the survivors lost their health in slave labour, but returned home.
BEAUTIFUL IS THIS LAND,
Over each hillock, over each forest and over each lake it looks the same and different. It is just like our folk song: Though over the Nemunas river it seems to be sung in a different manner, it is nevertheless filled with the same longing and poignant emotion.
Justinas Marcinkevičius
Justin Marcinkevičius Važatkiemio in his native village in 1986.
Photo: Romuald Rakausko.
Marcinkevičius was born in 1930 in Važatkiemis, Prienai district. In 1954 he graduated from Vilnius University History and Philology faculty with a degree in Lithuanian language and Literature. He joined the Communist party in 1957. He worked for a number of years as vice-chairman of the board of the official Union of Lithuanian Writers. He died in Vilnius on the 16th of February 2011.
Having grown up during the post-war period, Marcinkevičius evokes in his poetry a romanticized version of childhood spent in the Lithuanian countryside, of first love, of man's relationship with nature. In his poetry specific and solid peasant thinking is combined with a mind seeking to draw broad general conclusions, and the tradition of Lithuanian poetry singing the Earth's praises with contemporary modes of poetic thought. As a poet, he has sought to grasp the essence of national experience and give it fresh artistic expression. In his lyrical verse Marcinkevičius strives to comprehend the real meaning of what is going on inside man and society and moves the reader with his ardent lyrical confessions.
For most his life Justinas Marcinkevičius lived and wrote during the complex times of Soviet totalitarianism. He defended the cultural self-awareness of his nation. The poet brought back humanistic idea in describing a man, continued on the romantic and lyric poetry tradition, valued the aesthetic side of literature, as opposed to the heroic and propagandistic style of socialist realism. Marcinkevičius wrote poems in a romantic and modern style. Justinas Marcinkevičius is regarded as one of the most prominent members of Sąjūdis.
Canadian economist Arthur DeFehr, who has a business in Lithuania, offers the experience of Manitoba province in his native Canada as an example to follow. When it faced depopulation, the prairie province started importing foreigners it needed to revive the economy. The results more than met expectations – unemployment started shrinking and remained below the national average even during the downturn.
DeFehr, who has a degree from Harvard School of Economics and a wealth of international experience, knows what he is talking about. He was a godfather of the initiative aimed at attracting immigration to Manitoba. Over a decade ago, he became a member of the Trilateral Commission, has been in the World Economics Forum for many years, and has been developing a furniture business for almost five decades.
“If you're concerned about depopulation, you must think what to do,” DeFehr tells 15min. “People are moving to the city, so maybe Vilnius could keep its population. But if people continue to emigrate, both Vilnius and Kaunas will start shrinking. Social problems will surface – nothing new happening, universities shrinking... A country that has lost almost one third of its population over twenty years is facing a disaster in another 10 or 20 years. Lithuania will no longer be interesting enough for people to want to live here, it will become a place for pensioners.”
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Until recently, Vilnius was often called Europe's best kept secret. Very few knew that here lies one of the world's best-preserved cultural treasures, namely Eastern Europe’s largest and most attractive old town. Few knew that Vilnius is considered the world's most Italian city outside Italy and the world’ most Baroque city north of the Alps. This is now changing rapidly. The world population has become aware of both the city and the country and the number of travelers here is the sharp increase.
Vilnius is the city Lonely Planet colourfully calls "eccentric and soulful," and one that offers the best overall hotel prices in all of Europe. According to Hotels.com's Hotel Price Index, Vilnius in Lithuania has an average per-night hotel price of $80, putting accommodations costs within reach of budget travelers. Sweeten the pot with a favorable exchange rate, quirky attractions, and Eastern Europe's largest old town, and you've got an intriguing and affordable destination.
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By JULIE TURKEWITZ, NEW YORK TIMES
Tanya Aldag slips into a closet-size room in her home in suburban Maryland. The door clicks shut. Here, surrounded by thousands of black and white prints, she goes tumbling back to Soviet-era Lithuania.
“It’s like you’re going deep into the water,” she said. “It can be hard to go there.”
Ms. Aldag, 64, is the widow of Vitas Luckus, once a prince — perhaps even a king — of the Soviet photography scene. From the 1960s to the mid-1980s, he traveled throughout the Soviet bloc, capturing peasants, performers, partiers and policemen, as well as a generation of grippingly attractive young artists. He scurried across sloping rooftops (Slide 15), camera swinging from his neck. He worked obsessively, with little care for what others thought. The secret police were a constant presence in his life, burgling his home and beating him in bathrooms and cafes.
In January 2013 compared with January 2012, industrial production decreased by 1.3% in the euro area (EA17) and by 1.7% in the EU27, according to estimates released by Eurostat, the statistical office of the European Union. Based on these estimates, Lithuania is among the countries with the highest growth of industrial production in the EU.
Among those countries for which data are available, industrial production fell in eleven and rose in seven EU member states. The largest decreases were registered in Sweden (-5.9%), Finland (-5.4%), Greece and Spain (-5%), with the highest increases in Bulgaria and Lithuania (8% each) as well as Estonia (5.5%).
In January 2013 compared with January 2012, production of durable consumer goods fell by 5.5% in the euro area and by 4.3% in the EU27. Intermediate goods production dropped by 3.1% and 3.4%, respectively. Capital goods production decreased by 2.6% in both zones. Production of energy increased by 0.9% in the euro area and remained stable in the EU27. Production of non-durable consumer goods rose by 3.1% and 2.2%, respectively.
Estonian E.L.L. Real Estate property development and management group that is majority-owned by Estonian businessman Toomas Annus plans to develop four office centres in Vilnius with a total leasable area of 44,000 sq.m at a cost of EUR 44 million euros, writes Äripäev with reference to news2biz LITHUANIA.
First in line is the smallest project of the four, a 4,300 sq.m, 7-storey, class A building very close to Vilnius' central business district. E.L.L. has already hired Lithuanian Baltic Engineers consultancy to design the technical project and find architects.
The building will be located next to a residential multi-unit house developed by E.L.L. earlier, and overlooking E.L.L.'s biggest project in Lithuania to date, the 65,000 sq.m Panorama shopping and business centre.
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