THE VOICE OF INTERNATIONAL LITHUANIA
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Dividends should be taxed only in the country where the income is earned
29-04-2011
The European Commission is running a consultation regarding taxation problems, when dividends are distributed across different countries. We have submitted our answers to the Commission, proposing to tax dividends only in the country where the income is earned.
The real estate tax is based on emotions
19-04-2011
LFMI's President R. Vainienė read a commentary on the Lithuanian Radio regarding the arguments for the real estate tax. There are no logical arguments to support the tax, there are only emotional arguments, and they are not a good basis for the tax.
Financial sector tax – it's just another tax and it will not help to prevent crisis
18-04-2011
The European Commission is running a consultation regarding the initiative to introduce a new tax for the financial sector. In our opinion, the tax is not grounded, it would reduce the EU's competitiveness in the financial sector, would promote the outflow of capital to other regions and would not reduce excessive risk taking. The most appropriate way to solve the problem of excessively risky behaviour is to end the support from the taxpayers' pockets, so the responsibility for risky behaviour would fall on the shoulders of the financial institutions.
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01-04-2011
For the last few years we have been repeatedly showing the vices and negative effects of the progressive taxation, repeating them again in our analysis regarding the amendments to the Law of Personal Income Tax in which we proposed to not approve this project.
LFMI Policy Analyst K. Leontjeva published a commentary on progressive taxation in the daily Lietuvos žinios “Envy + Pride = progressive taxation.”
The introduction of voluntary common consolidated corporate tax base would increase the risk of it becoming mandatory, and would not help to achieve the set goals
18-04-2011
Even though the current EC proposal to apply the common consolidated corporate tax base (CCCTB) voluntarily might look appealing to business, however, the creation of this system would be a first step towards the mandatory application of CCCTB to all firms. The tax base described in the proposal would increase the existing tax base in Lithuania, thus if CCCTB would become mandatory it is possible that the tax burden for Lithuanian firms would increase. Lithuania would lose the possibility to use a more transparent and simple corporate tax base as competitive advantage.
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12-04-2011
We carried out a review of the use of EU structural funds in Lithuania and we concluded that even though Lithuania is one of the countries that absorb EU funds at the quickest pace, the set schedule is still not kept. It is necessary to think right now about the redistribution of EU funds in order to not only absorb them in time, but to get the maximum effect.
We suggest to simplify the accounting and administration of taxes on income from labour
07-04-2011
As the Parliament is getting ready to consider the guidelines for the reform of social insurance and pension system, among which is the aim to improve the administration of social security (Sodra), LFMI proposes to simplify the accounting and administration of taxes on income from labour (paying and declaring of the tax) by making the bases of income taxes uniform. LFMI suggests doing that together with the government’s plan to give the administration of social insurance payments to the State Tax Inspectorate.
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It is necessary to gradually leave the system of state social insurance pensions and to move towards accumulation for pensions
13-04-2011
We propose to leave the system of state social insurance pensions and to step by step move towards the accumulation for pensions. Individuals who would fail to accumulate funds would receive state support after carrying out the means test. We also gave comments and suggestions regarding the different parts of the Project regarding the financing of the State Social Insurance Fund and the improvement of its administration and regarding the improvement of the system of pension accumulation.
We presented our position on April 28 at the Liberals Movement fraction’s meeting regarding the pensions reform.
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Regulative burden
The question regarding the sanctions for executives must be reconsidered
19-04-2011
We have repeatedly warned the members of the Parliament regarding the new provisions in the Law of Competition that lay down personal responsibility for executives of firms who break this law. The prohibition to work in executive position for 3-5 years is too severe a punishment for a person who violated the law.
Control "Additives Free": good enforcement of the law instead of new requirements
08-04-2011
We propose to remove the requirement that all food products that display information by the producer that the product is "Additives free" or similar on the package must have laboratory tests that confirm this information. If in a specific case the said marking is misleading, and has the appearance of false advertising, the responsible institution should perform an investigation according to established order on every specific case regarding breaches of advertising regulations.
The daily Lietuvos žinios has published LFMI President R. Vainienė's commentary on this topic, "How the control of "Additives Free" should look like."
Shadow economy: the causes are clear yet the fight is unsuccessful
11-04-2011
What causes the shadow and how to fight it? Are the measures that the government is proposing, such as cash registers and restrictions on the use of cash a good way to fight it? What is the scope of the shadow economy in other European countries? What can we judge from the first two months of the year about the success of government's plan to draw one billion litas from the shadow economy? LFMI's Policy Analyst Vytautas Žukauskas has published an article on these topics in the weekly Veidas.
In addition to that, on April 20 we participated in the hearings "The effectiveness of the Governmental measures to fight the shadow economy during the first quarter of the year 2011, and their possible impact on the income for the budget".
Why the shadowy Albinas will not go to the bank?
05-04-2011
LFMI president R. Vainienė read a commentary on the Lithuanian Radio regarding the new ways the government is trying to fight the shadow economy. This time the government has decided to restrict the use of cash. Is that an appropriate measure? Or maybe the shadow is simply laughing at a fight like this?
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What measures would help to further a decrease in unemployment and encourage the creation of new jobs?
29-04-2011
Replying to the government‘s consultation we propose to not fake a fight against unemployment, but to take urgent steps – to improve the business environment, to create the preconditions for growth of the economy, to reduce the negative view of the entrepreneurship, and the mentality that is hostile to business, to lighten the procedures of forming and discontinuing a work agreement, to discard the protection of special groups, to increase the flexibility of regulation regarding the negotiation of the working time and to create more possibilities to negotiate the working time individually or at the company level, to reduce the unemployment benefits and other guarantees that are extended to the registered unemployed, to reduce the minimum wage. All of these measures are not „anti-crisis“ and are not aimed at only fighting the consequences of the existing unemployment or to temporary ease the situation in the labour market. The aim of all those measures is not only a reduction of unemployment, but also a sustainable long-term economic growth.
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It is necessary to continue and not to halt the reform of the railway sector
19-04-2011
The Parliament proposes to remove the Law on the Railway Sector Reform from its agenda and so essentially change the direction of the railway sector, on which the agreement was reached in 2004, when the Law of Railway Sector Reform was passed. The draft law contains no strong arguments to prove the necessity to eliminate the above mentioned Law of Railway Reform. We propose to not approve the bill.
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The electricity market lacks competition and freedom of choice
29-04-2011
As the new version of a draft of the law on electric energy reached the Parliament, we provided our comments and proposals regarding the issuance of permits to develop energy production capacity, the connection of new consumers to distribution network, the direct lines, and competition in the electricity sector.
Changes to the Laws on Heating Utilities and Competition will not solve the existing problems, creating the new ones instead
12-04-2011
The prohibition for maintenance companies (or persons) to have any connections with the providers of heating or the companies that produce the equipment of heating or service the equipment will be very hard to implement in smaller cities. The new regulation may reduce the efficiency and raise the costs of maintenance services.
The changes to the Law on Competition will not improve the supervisory mechanism and will increase the administrative burden for companies, meanwhile the definition of dominant position in the draft is discriminatory towards the companies that service building's heating and hot water system and towards the subjects, who administer the objects of common usage.
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Vytautas Žukauskas: Whose income would be increased by progressive taxation?
29-04-2011
Kaetana Leontjeva. The Royal wedding - through the social glasses
29-04-2011
Vytautas Žukauskas: The fight with the shadow in a scheme
20-04-2011

The president of Lithuania, Dalia Grybauskaite,
and president of the United States of America, Barack Obama.
USA's president, Barack Obama, visits Europe this week. Ireland, England, France and Poland are on his programmer on this trip to Europe, the 9th as U.S. president.
Obama's weeklong tour is all about tending to old friends in the Western alliance and securing their help with daunting challenges, from the political upheaval in the Mideast and North Africa to the protracted war in Afghanistan.
A priority for the president and his allies will be to more clearly define the West's role in promoting stability and democracy in the Arab world without being overly meddlesome and within tight financial limitations.
A highlight of Obama's opening stop in Ireland will be a pilgrimage to the hamlet of Moneygall, where Obama will explore his Irish roots. Fulmouth Kearney, who immigrated to the United States in 1850 at the age of 19, is the third great-grandfather of Obama on his white, Kansas-born mother's side. Obama, whose father was born in Kenya, will connect in Moneygall with distant relatives from the Irish branch of his family tree.
After his one day in Ireland, he will spend two in England, where he and first lady Michelle Obama will be treated to all the pomp and pageantry that the monarchy can muster for the president's first European state visit. The Obamas even get a Buckingham Palace sleepover.
Heather Conley, director of the Europe programme at the private Centre for Strategic and International Studies, said Obama's stop in Britain could help "put the 'special' back into the U.S.-U.K. special relationship."
In private, Obama and British Prime Minister David Cameron will plunge into the details of a host of international challenges on which the U.S. and Britain have worked together: Afghanistan, Libya, counterterrorism, the global economy and more.
Both leaders then scoot to a French summit of the Group of Eight industrialized nations, where the president hopes to build on momentum from his speech days ago about how best to promote stability and democracy in the Middle East.
Obama has called on the World Bank and International Monetary Fund to present the G-8 with an ambitious plan to help Egypt and Tunisia, in particular, recover from the disruptions caused by their democratic revolutions and prepare for elections later this year.
During his two-day stay in Deauville, France, Obama will take time for one-on-one meetings on the side of the G-8 with several world leaders, including Russian President Dmitry Medvedev and Japanese Prime Minister Naoto Kan.
Poland and Central Europe
Obama's visit to Poland is emblematic of a growing front in the administration's engagement in Europe, as the U.S. expands its economic and security relationship with Central European nations.
Obama will focus on energy cooperation, including shale gas development, when he visits NATO partner Poland for the first time, a US diplomat said last week in Warsaw.
"Energy is a pillar of Polish-American relations and it is sure to be the subject of discussions when President Obama visits Warsaw," US ambassador Lee Feinstein told delegates to a shale gas conference. Global fuel giants are exploring Poland's shale gas deposits, which a recent US study pegged as having a potential 5.3 trillion cubic metres of natural gas which could last some 300 years.
The U.S. has become a global leader in the production of natural gas extracted from shale, boosting its energy security, driving down prices and making it an exporter. Poland hopes it could reap similar benefits. However, experts insist that with exploration in the very early stages, it is too soon to gauge commercial viability.
Obama – Grybauskaite
In April 2010, Barack Obama and his Russian counterpart Dmitry Medvedev signed a new arms reduction treaty in Prague, primarily with regards to the Eastern European missile defence system that had been planned by the Bush administration,
After the signing, President Obama invited the presidents of Lithuania, Latvia, Estonia, and Romania, as well as the prime ministers of Poland, Czech Republic, Bulgaria, Croatia, Hungary, Slovakia and Slovenia to attend a dinner with him in Prague.
Lithuanian President Dalia Grybauskaite openly disagreed with Obama on the new reduction plan, claiming it harmed Lithuanian security, and in perhaps the most shocking move refused to take part in the dinner in Prague. Grybauskaite was the only invited president who refused to meet with Obama.
Since becoming Lithuania's president in 2009, Grybauskaite has wasted no time defining her leadership. "Yes, you have to be a strict and loud partner if you want to be heard in the conversation," she told The Associated Press in an interview this winter.
"Lithuania is not used to a straightforward, terse, forceful way of making statements. I admit using this style in pushing NATO defense plans for the Baltic States," she said, referring to U.S. cables released by WikiLeaks earlier this year, showing that NATO in January 2010 privately decided to expand a NATO defense plan for Poland to also cover Estonia, Latvia and Lithuania.
"I am afraid that if I had chosen a different tone, Lithuania and its neighbours would be still waiting another six years for these," she said to the Associated Press, giving herself credit for USA’s and NATO’s new strategy as revealed by WikiLeaks.
President Obama has invited the same state leaders for a dinner by the end of this week, now in Poland, and we understand that this time President Grybauskaite has accepted the invitation.
It still remains to see how President Grybauskaite’s ‘reflections’ vs. the Obama administration in 2010 and NATO now in 2011 are being treated and responded to by the said parties. We can only hope they are not given too much weight and that the relationships with Lithuania have not been harmed. Her acceptance of this year's invitation from Obama, and the absence of new provocative statements, suggest that she has adopted a more conciliatory and diplomatic style and line.
The right to disagree and discuss any topic should always remain free and open, but I think our president would be better off by following more recognized protocol procedures when such delicate issues are to be discussed at the highest international level.
To have a best possible relationship with the U.S. and the Obama administration is important for Lithuania, and one can only hope that his visit to Europe and Poland will come to represent a positive step towards improved dialogue and cooperation also between Lithuania and the United States.
Aage Myhre, Editor-In-Chief
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In a meeting in Bydgoszcz , Poland, last week, the foreign ministers of France, Germany and Poland agreed to an ambitious programme that includes pushing for tougher sanctions against Belarus, and for the European Union to establish its own civil and military planning headquarters independent of NATO.
The Foreign Ministers Alain Juppé of France, Guido Westerwelle of Germany and Radek Sikorski of Poland interspersed bonhomie with frank talk, showing how much relations have improved among the countries, after a past based on enmity and distrust.
The ministers said a European should be the next managing director of the International Monetary Fund after the resignation of Dominique Strauss-Kahn.
They also agreed that President Barack Obama’s speech delivered on Thursday on the Israeli-Palestinian conflict showed a link between changes sweeping the Middle East and a resolution to that intractable problem.
“The United States cannot do it alone,” Mr. Juppé said. “Europe must help.”
Mr. Westerwelle said: “The peace process affects what is happening in the Middle East. And what is happening in the Middle East affects the peace process.”
In another meeting, now in Klainingrad, Mr. Sikorski and Mr. Westerwelle for the first time held a trilateral meeting with their Russian counterpart, Sergei Lavrov. The meeting in Kaliningrad was part of an effort by the three countries to work together over political, security, energy and visa issues, and was viewed as a significant improvement in relations between Germany, Poland and Russia.
The Weimar Triangle
The meeting in Bydgoszcz was held under the umbrella of the Weimar Triangle, named after the city of Weimar, a jewel of a cultural center in southeastern Germany. The group was set up 20 years ago at the initiative of the German government to foster a deep reconciliation with Poland akin to what France and Germany did after 1945.
Poland, set to take over the six-month rotating European Union presidency in June, is showing more self-confidence, evident in its influential voice regarding Russia, Ukraine and Belarus.
Mr. Sikorski and Mr. Westerwelle called unacceptable the recent crackdown and trials of opposition leaders in Belarus who held peaceful protests in December against the fraudulent presidential elections. Mr. Sikorski said Poland, France and Germany would press their E.U. partners in Brussels on Monday to impose tougher sanctions against the Belarussian leadership.
At the same time they would support as much as possible independent, democratic movements and organizations.
Poland already provides financial assistance to Belarussians studying in Poland because their political activities prevent their doing so at home. And Poland finances Belsat, the independent television station that is based in Warsaw and broadcasts news and current affairs into Belarus.
The three ministers also agreed that the European Union should have its own civil and military planning headquarters. When the idea was first presented by Germany, France, Belgium and Luxembourg in 2003, when all four countries opposed the U.S.-led invasion of Iraq, it was staunchly rejected, not only by the United States but also by Poland and other East European countries.
Opponents of the idea said at the time that an E.U. planning headquarters would be a competitor to NATO and eventually would lead to the loosening of the trans-Atlantic alliance. Now, however, Poland increasingly sees Europe in need of a stronger security and defense policy, with its own civil and military planning headquarters, as the United States expects it to pull its weight in defense and security matters.
Meeting in Kaliningrad
Mr. Sikorski and Mr. Westerwelle travelled to the Russian exclave of Kaliningrad after the Bydgoszcz meeting, where for the first time they would hold a trilateral meeting with their Russian counterpart, Sergei Lavrov. The meeting in Kaliningrad was part of an effort by the three countries to work together over political, security, energy and visa issues, and was viewed as a significant improvement in relations between Germany, Poland and Russia.
Russia is seeking assurances from NATO that any missile defense system the military alliance deploys in Europe will not be directed against the country.
“We do not want any missiles aimed at Russia, and we want some kind of written guarantees from NATO that the missiles will not threaten Russia,” Lavrov, said after the talks.
“This is about cooperation, not confrontation, about discussing concrete projects,” Mr. Westerwelle told hundreds of students at Kant University who had gathered to question the three officials.
Russia has in the past threatened to place missiles in Kaliningrad — a small area with a population of nearly one million that is sandwiched between two European Union countries, Poland and Lithuania — in response to NATO’s plans to deploy part of its missile shield in Eastern Europe.
Shift in U.S. strategy
President Obama, who is to visit Poland next week, intends to deploy Patriot missiles there, but not the original missile shield system that the administration of President George W. Bush had promised to do. The Bush administration’s plans to place parts of the missile defense system in Poland and the Czech Republic, which were once part of the Soviet military alliance, led to a sharp deterioration of relations between Washington and Moscow. The Russian prime minister, Vladimir V. Putin of Russia, has said that such deployments would undermine Russia’s security.
Mr. Obama’s decision to shift strategy was not only because of the costs and the need to modify the scope of any missile defense system that would provide a much broader security umbrella over Europe. The administration said it also wanted to “reset” its relations with Russia.
During Saturday’s discussions, the ministers agreed that their meeting could evolve into something more permanent — like the Weimar Triangle, which the French, German and Polish foreign ministers set up 20 years ago after the reunification of Germany. The Weimar Triangle helped to lead to reconciliation between Poland and Germany, ending decades of enmity and distrust.
Mr. Lavrov acknowledged that Russia could not ignore Poland’s new role on the Continent, now that it is a member of the European Union and it is scheduled to take over the rotating EU presidency the 1st of July.
The three officials also discussed Belarus. Poland and Germany, with support from France, want European foreign ministers to impose more sanctions against Belarus. The sanctions, already imposed on the top leadership, could be extended to some enterprise managers. At the same time, Poland and Germany intend to strengthen their ties to civil society and the democratic opposition.
Russia, however, said it opposed more sanctions. “This will only lead to further isolation,” Mr. Lavrov said. “That will do nothing to help the way towards direction.”
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New collaboration constellations are forming in our today’s Europe. The potential new alliance between France, Germany, Poland and Russia is an example of that.
This new approach, between countries that previously were relatively far apart, as well as the so-called G-8 and G-20 alliances between the world’s richest countries are examples of how we seem to be moving into a new World Order. Also in good old Europe we are now beginning to develop entirely new constellations.
Typical of such constellations is that the largest and richest countries take initiatives to secure their own positions and welfare, while smaller countries often have to put up with playing second fiddle.
What the three Baltic States now face is that being members of the EU is not enough. The economic crisis, and partly also questions on defence and security, have led to new forms of cooperation, as the aforementioned , and our small nations far north in Europe are not invited to become active participants.
It is therefore my opinion that a tight collaboration with the other Nordic countries is the way to go. Together we are large and powerful enough to be heard, and our common identity and cultural background is a good basis for cooperation.
In the 13th century, an alliance of Northern European towns called the Hanseatic League created what historian Fernand Braudel called a “common civilization created by trading.” Today’s expanded list of Hansa states share Germanic and Scandinavian cultural roots. Germany and the Scandinavian countries have found their niches by selling high-value goods to developed nations, as well as to burgeoning markets in Russia, China, and India.
Widely admired for their generous welfare systems, Denmark, Finland, Norway, Sweden and Germany have liberalized their economies in recent years. They account for six of the top eight countries on the Legatum Prosperity Index and boast some of the world’s highest savings rates (25 percent or more), as well as impressive levels of employment, education, and technological innovation.
“In strategies that we are developing for the next twenty years emphasize that it is important for the Baltic States to become more harmonized and catch up with Scandinavian countries. Integration with Nordic countries is an important objective,” said Andrius Kubilius, Lithuania’s prime minister, in a meeting in Tallinn a few days ago..
I think he is right.
Aage Myhre, Editor-in-Chief
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Dear VilNews,
We have recently discovered your internet journal and are extremely impressed by it. It is sad that our own, Lithuanian press does not have standards that you do!
We are very happy to have an informative, objective and intelligent source of news from Lithuania.
We are a community initiative, the non-profit organization based in New York.
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The Embassy of the United States of America announced the official opening of the Office of the U.S. Secret Service in Estonia on Friday, May 20.
The Secret Service office will work closely with its law enforcement partners within the criminal investigative infrastructure in the Baltic nations of Estonia, Latvia and Lithuania.
Estonia was selected as the site for the new Secret Service office due to both the investigative nexus it provides in combating cyber and financial crimes, as well as the opportunity it provides the agency in the fulfillment of its protective duties within the region.
Tallinn will also serve as a prime location from which to engage counterparts in Russia and throughout the Nordic region.
Estonian Minister of Justice Mr. Kristen Michal, U.S. Ambassador to Estonia Michael C. Polt, and visiting U.S. Secret Service Assistant Director A.T. Smith will attend the event.
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The "Look to Norway" speech by U.S. President Franklin D. Roosevelt was given during the handover ceremony of the Royal Norwegian Navy ship HNoM King Haakon VII at the Washington Navy Yard on 16 September 1942. In the speech the President said: "If there is anyone who still wonders why this war is being fought, let him look to Norway. If there is anyone who has any delusions that this war could have been averted, let him look to Norway; and if there is anyone who doubts the democratic will to win, again I say, let him look to Norway."
The speech served as an important source of inspiration to Norwegians fighting the German occupation of Norway and the rest of Europe as well as for the resistance fighters of other small countries during World War II. |
By Tanushree Poddar, Deccan Chronicle, South India

St. Anne’s Church in Vilnius.
Photo: www.travel.lt
When Napoleon saw this church, he wanted to carry it away with him on the palm of his hand and gift it to his sweetheart, Josephine,” our guide informed us with a twinkle in her eyes. “Thankfully, he could not fulfill his wishes and the church still remains in Vilnius.” I was not surprised.
I would have liked to carry the stunning church home, too. St. Anne’s church evokes covetousness in all breasts. It is so beautiful. Vilnius, the capital of Lithuania, is an artist’s dream. With its emerald forests, cobalt lakes, cerise spires and pine scented air, it is a romantic paradise. Apart from lovely landscape, it has some of the most beautiful churches I have ever seen.
Read more at:
http://www.deccanchronicle.com/tabloid/sunday-chronicle/travel/romantic-paradise-187
The Deccan Chronicle is a daily newspaper published through the Andhra Pradesh, Karnataka, and Tamil Nadu states of India. It is published in English, and is the largest circulation English-language newspaper in the south of India. The newspaper's name derives from the originating place Deccan regions of India.
VilNews e-magazine is published in Vilnius, Lithuania. Editor-in-Chief: Mr. Aage Myhre. Inquires to the editors: editor@VilNews.com.
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