News

Fitch Ratings revised down its credit outlooks for Bulgaria, Latvia, Lithuania and the Czech Republic from positive to stable as Europe’s economic-growth prospects deteriorate amid a sovereign debt crisis.

“Strong economic and financial linkages mean that countries in central and eastern Europe are being adversely affected by downward revisions to economic-growth prospects and heightened financial stress in the eurozone,” Ed Parker, Managing Director in the EMEA Sovereign group at Fitch in London, said today in a statement.

Eastern Europe’s export-led recovery from its worst slump since the end of communism is in jeopardy from the threat of a new recession in the U.S. and Europe’s sovereign debt crisis. The region depends on export demand from euro-area nations to drive its growth and about three-quarters of its banks are owned by foreign, mainly west European lenders.

Economic growth in the 12 former communist countries that are now part of the 27-member European Union will reach 3 percent this year, according to a World Bank report published Nov. 16.

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In 2012, Lithuania will fall over backwards to attain the aim of not exceeding the budget deficit of 3%. This is what the ruling coalition says, yet, the experts claim that such ambitious aims will make Lithuania tighten belts even more.

Last week, the leaders of the European Union agreed that a member-state's budget deficit should not exceed 3% in the future, while the structural deficit should not go over 0.5%, writes LETA/ELTA, referring to Lietuvos rytas.

The new agreement stipulates that the member-states which fail that will face sanctions. However, the parliaments of the non-eurozone member-states will have yet to agree on the plan. Even though Lithuania is not a member of the eurozone, it wants to fully comply with the requirements. In order to do that, introduction of new taxes and benefit freezing is being considered. While Europe is looking for a way to cut the structural deficit, Lithuania wants to excel itself and have a surplus. It is forecasted that Lithuania's next year budget defic it will stand at 5.8% of gross domestic product (GDP). The ruling coalition wants the budget deficit not to exceed 3% from as early as next year.

 
Mikhail D. Prokhorov

MOSCOW — Amid a crescendo of complaints from Russians fed up with the country’s tightly controlled political system, two prominent figures — a billionaire industrialist and the recently ousted finance minister — sought to fill a void in the opposition leadership on Monday.

The billionaire, Mikhail D. Prokhorov, who owns shares in a major gold mining company and an array of other ventures in Russia as well as the New Jersey Nets basketball franchise in the United States, said he will run for president, challenging Prime Minister Vladimir V. Putin.

“I made a decision, probably the most serious decision in my life: I am going to the presidential election,” Mr. Prohkorov said at a news conference. He has barely appeared in public since mid-September, when he was dramatically removed as the head of a pro-business party, Just Cause, after clashing with Kremlin political strategists.

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“Rumours made about Swedbank are falsea and absurd. All banking operations are functioning. We urge people not to fall victim to rumours and assess them critically,” said Swedbank in a tweeted statement made Sunday evening.

The reason for such a statement was the fact that long queues of people formed outside Swedbank ATMs after rumours started to circle in social networks that the bank was having problems.

Some ATMs ran out of money as a result.

According to one Latvian entrepreneur, there are rumours that the whole management of Swedbank Latvia has been arrested while other claims said that the bank was having problems in Estonia.

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Lithuania flies the flag

Who comes first worldwide in delivering high speed internet to consumers? Well you can forget the USA and the UK. Step forward Lithuania in the No 1 spot, with a speed of 31.89 mbps, an awesome 99.6 per cent of the figure advertised.

In second place as far as keeping promises is Sweden, with 26.23 mbps, 85 per cent of the figure claimed.

The USA is in 33rd position with 12.20 mbps, which is 93.6 per cent of the figure claimed. The UK is in 38th position with 11.04mbps, which is 72.6 per cent of the figure advertised.

At speed rank 66 is crisis country Greece with 6mbps, 44.4 per cent of the figure claimed.

"Service providers loudly promote their download speeds," says the Wall Street Journal. " But it's tough for consumers to know just how high-speed that Internet access really is."
Government regulators in several countries are now discovering that providers' performance often fail to match their claims: meaning more time spent waiting for video to buffer, photos to load, and online games to continue. 

"We found that people were making decisions based on advertised speeds, which bore little resemblance to actual speeds," says Ian Macrae, director of the broadband-testing project for the U.K. Office of Communications. 

In the past three years, says the WSJ, U.S. and U.K. regulators have been testing broadband lines and publishing their findings, running actual and advertised speeds side by side. The European Commission has now also signed on signed on with the same British firm SamKnows.
The FCC's August figures showed most companies in the US delivering 89% of advertised speed. 

Steven Bauer, a computer scientist at the Massachusetts Institute of Technology, warns however: Stray too far from your wireless router, or too close to a microwave, and the signal could degrade. "All of those issues were affecting early versions of speed tests," he says. "The FCC is really careful to control for all of those effects." 

The FCC and SamKnows have met with Internet providers and academics to design a methodology that will hold up to scrutiny.
SamKnows, started by Sam Crawford in 2003 whilst at university as part of his computer sciences degree, is now advertising for 10,000 volunteers across 30 countries. Check it out at: www.samknows.com

 
Demonstrators march in Moscow / AP

MOSCOW, Russia -- Shortly after seven on Tuesday evening, at the protest against the government of Prime Minister Vladimir Putin on Moscow's central Triumfal'naya Square, about a mile north of the Kremlin, protesters chanted, "Down with Putin!" "Putin Get Out!" "Russia Without Putin!" and, most ominously in a country where the only real leader is a strong leader, "Putin is a Coward!"

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Lithuania cracks down on beggars and almsgivers

ASSOCIATED PRESS: A coin tossed into a beggar's hat in Vilnius can be costly charity.

Lithuania's capital recently introduced a ban on panhandling that not only punishes those who beg but those who give, with fines of up to 2,000 litas ($770).

Outraged rights groups say the ban spells misery for the needy in one of Europe's poorest countries, as winter kicks in and economic turmoil spreads across the continent. Like other European Union nations, Lithuania has been implementing severe welfare cuts that promise to hit the homeless hard.

"Begging is a human right," said Linas Kukuraitis, director of the Lithuanian chapter of Catholic charity group Caritas. "It was there long before cities emerged. There have always been those who begged and those who helped them."

But Vilnius Mayor Arturas Zuokas says the ban will help beggars to find more sustainable ways to make a living.
"Giving money to people on the street is wrong," Zuokas said. "By doing this we doom them to stay there forever."
The ordinance took effect last week, but local police in Vilnius are not issuing fines just yet. Instead they are handing out cards to beggars with addresses and phone numbers of charities and homeless shelters. Stricter enforcement is expected to begin in January.

The mayor himself rode his bicycle on the cobblestone streets of the medieval city center on Sunday, looking for violators of the ban. Zuokas made a splash on YouTube earlier this year by riding an armored personnel carrier over a luxury car as a publicity stunt for his crackdown on illegal parking.

"You are doing the wrong thing by giving them money," Zuokas told a Polish tourist who dropped coins in an old man's hat. "If you really want to help them, it is better to give food or give to charity."

He said there are plenty of homeless shelters for the poor in Vilnius, "but they stay on the streets because it is a kind of business."

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Twenty years post Soviet
Confidence in democracy and capitalism wanes...

Two decades after the Soviet Union’s collapse, Russians, Ukrainians, and Lithuanians are unhappy with the direction of their countries and disillusioned with the state of their politics. Enthusiasm for democracy and capitalism has waned considerably over the past 20 years, and most believe the changes that have taken place since 1991 have had a negative impact on public morality, law and order, and standards of living.
There is a widespread perception that political and business elites have enjoyed the spoils of the last two decades, while average citizens have been left behind. Still, people in these three former Soviet republics have not turned their backs on democratic values; indeed, they embrace key features of democracy, such as a fair judiciary and free media. However, they do not believe their countries have fully developed these institutions.

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Transaero Airlines will operate its flights to Vilnius Airport with Boeing 737-500 aircrafts.

More and more people fly between Russia and Lithuania, and now there will be more seats and new flights.

New Russian flights from Vilnius to Domodedovo Airport are scheduled four times a week – on Mondays, Thursdays, Saturdays and Sundays. The flight duration to Moscow is 1 hour 40 min.

Initially Transaero Airlines will operate its flights to Vilnius Airport with Boeing 737-500 aircrafts providing passengers with a choice of three classes: Business class, Premium Economy and Tourist Economy.

Transaero Airlines is the first and currently the largest private carrier in Russia. Transaero’s fleet consists of 73 aircrafts. According to the German Jet Airliner Crash Data Evaluation Center (JACDEC), the company ranked in the top 10 safest carriers among the world's 60 largest airlines. Transaero serves 116 routes in Russia, Europe, Asia, Africa and America.

Bloomberg
Lithuania may have to raise the level of public debt to repay depositors of Bankas Snoras

DnB economist Jekaterina Rojaka:
Lithuania may need 1 billion euros ($1.33 billion) next year to make up for funds used to clean up after the collapse of Snoras, Lithuania’s fifth-largest bank by assets.

Lithuania may have to raise the level of public debt to repay depositors of Bankas Snoras AB, exacerbating an increase in financing costs caused by Europe’s sovereign-debt crisis.

The Baltic nation may need 1 billion euros ($1.33 billion) next year to make up for funds used to clean up after the collapse of Snoras, Lithuania’s fifth-largest bank by assets, said DnB Bank AB economist Jekaterina Rojaka. State debt may surge to 40 percent of economic output from 33.3 percent at the end of October at an “unfavorable time” as the crisis roils financial markets, she said.

“The pressure in the near-term is very strong because the government will be left with no reserves to refinance maturing debt,” Rojaka said. “The first half isn’t looking very cheerful for Lithuania.”

Lithuania, which experienced the world’s second-deepest recession in 2009 after Latvia, aims to cut the budget deficit to 2.8 percent of gross domestic product next year from 9.5 percent in 2009 as it looks to switch to the euro in 2014.

Read more: http://www.businessweek.com/news/2011-12-01/lithuania-borrowing-costs-to-surge-as-snoras-payments-boost-debt.html

 
Lithuania sets up representation in Silicon Valley, and has already attracted one Valley company, US Levanta Scientific, to establish a new R&D unit in the Sunrise Valley in Vilnius. Levanta’s customer list includes impressive names like NASA, The Department of the Navy, Massachusetts Institute of Technology, Harvard College, and the Smithsonian Institute.

Lithuania has set up a representation in the Silicon Valley, located in Northern California, in the United States, to raise the country’s awareness among the companies operating in the world’s best known agglomeration of technology businesses and to encourage their investment in Lithuania.

INVEST LITHUANIA has signed a partnership agreement with Noah Mamet & Associates, a strategic consultancy firm, which will be in charge of organising the representation activities, such as presentations, business meetings, events and marketing campaigns.

"Our goal is to target as many US companies as possible in order to attract their attention towards the potential of high technology business development in Lithuania," said Mantas Nocius, Managing Director of INVEST LITHUANIA, commenting on the decision to set up a representation in the Silicon Valley.

One of the latest investment projects announced in Lithuania involves the Silicon Valley as the US company, Levanta Scientific, is to establish a new research and development unit in the Sunrise Valley, based in the capital city Vilnius, through its subsidiary based in the Silicon Valley. The project, valued LTL 16.2 million (EUR 4.7 million), will offer more than 80 jobs.

“These trends point to the fact that Lithuania attracts investment to both manufacturing and service sectors. It means that the country is capable of offering proper conditions and enough of competent specialists for various businesses,” said Rimantas Žylius, Minister of Economy.
www.ukmin.lt

A total of 20 investment projects during the first nine months of 2011 with the overall project value at LTL 366 million (EUR 106 million) and more than 2,500 new jobs due to be offered have been confirmed, by signing letters of intent, by the Ministry of Economy and INVEST LITHUANIA.

The deals include five manufacturing projects, and another fifteen are in the service sectors.

The largest manufacturing projects will be carried out by Danspin, the Danish producer of carpet yarn, which invests LTL 41.4 million (EUR 11.9 million) into a new factory in Raseiniai, and Homegroup, the British manufacturer of furniture, which will allocate LTL 18.6 million (EUR 5.4 million) to expand its facility in Klaipėda. The latter deal is the largest in terms of a number of new jobs which is planned to reach 1,100.

The list of the largest service project is led by Call Credit, the UK’s company which is setting an LTL 52.7 million (EUR 15.3 million) customer service centre in Vilnius, and Western Union which is expanding its existing service centre by investing LTL 39 million (EUR 11.3 million). They are followed by GFK Austria which plans to open a representative office by allocating LTL 37.3 million (EUR 10.8 million). The two projects will create 200 new jobs each.

“These trends point to the fact that Lithuania attracts investment to both manufacturing and service sectors. It means that the country is capable of offering proper conditions and enough of competent specialists for various businesses. It is important that some of the projects are planned in smaller cities which usually receive less foreign investment and the creation of new jobs is therefore particularly important there,” said Rimantas Žylius, Minister of Economy.

All five manufacturing projects announced this year are to be implemented in towns and cities other than Vilnius, while smaller cities also attracted two of the service-related projects.

The two latest confirmed projects include a LTL 16.2 million (EUR 4.7 million) investment into a new scientific research laboratory by a US-based company, Levanta Scientific, in Vilnius and a LTL 12 million (EUR 3.5 million) project by a budget carrier Ryanair aimed to establish an aircraft maintenance centre in Kaunas. The projects are to introduce up to 80 and 60 of new jobs accordingly.

“Lithuania records a growing flow of investment into research and development of manufacturing. Also, foreign investors encourage demand for certain professions. For instance, the Ryanair’s new maintenance centre will surely prompt more people to opt for careers as aviation technicians,” said Mantas Nocius, General Manager of INVEST LITHUANIA.

According to Statistics Lithuania, the total accumulated foreign direct investment (FDI) during the first six months of this year amounts LTL 1.411 billion (EUR 408.7 million). The analysis made by the Ministry of Economy suggests that in one year this amount of FDI can contribute to lowering the unemployment rate by almost one percentage point and adding almost LTL 1 billion (EUR 289.6 million) to the country’s gross domestic product.

Lithuania's remarkable recovery

VILNIUS
Photo: European Commission

BY ANDERS ÅSLUND
BRUSSELS - This year, Lithuania is one of the fastest growing economies in Europe with an annualized growth rate of 6.6 percent during the first half of the year. This high growth is driven by an exports surge of no less than 38 percent.

This is an incredible achievement after a vicious financial crisis. Remember that Lithuania’s GDP slumped by 14.7 percent in 2009. The explanation is rigorous government policy. Lithuania’s attainment is often ignored or belittled because its neighbors Estonia and Latvia have carried out similar miracles, but they are all true heroes, and Lithuania’s cure looks remarkable also among this tough competition.

As the bankruptcy of the American investment bank Lehman Brothers in September 2008 caused a global liquidity freeze for half a year, the countries that were hit the hardest were small, open countries without guaranteed access to swap credits from major central banks. In other words, the Baltic countries.

Read more:
http://euobserver.com/7/114419

Lithuanian Company Among Five Most Innovative in Europe

www.biocentras.lt

Biocentras, a Vilnius-based producer of biotechnology products, entered the shortlist of final five in the European competition aimed at selecting most innovative biotechnology companies. Apart from the Lithuanian firm, the EuropaBio’s top five included German, Belgian and two Dutch pharmaceutical companies.

Lithuania second in EU by economic growth

The Lithuanian economy expanded by 7.2 percent in the third quarter of the year compared to the respective period in 2010, the European Union’s statistics office Eurostat said. Among the 27 member of the EU, Lithuania is second only to Estonia which posted a 7.9 percent increase in its gross domestic product over the period.