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Address by H.E. President Valdas Adamkus of the Republic of Lithuania at the American Chamber of Commerce " Effects of Lithuania's Integration into the European Union"

2002.11.26

The ultimate goal of Lithuania is full integration into the mainstream of the Old Continent. To achieve this goal, Lithuania has to join the common market, the common infrastructure network and must base its activities on social and environmental standards that are used now throughout Europe. In all these matters, we have worked actively with the EU countries and with the rest of the world.

This year is truly exceptional for Lithuania. We are closing the decade of building a free and democratic country, restructuring our economy, and integrating our nation back to the Western community.

Very clearly the invitations to membership in the EU and NATO will mark the beginning of a new process: that of sharing our resources and our accomplishments with the rest of the Euro-Atlantic family.

We, therefore, have placed such a great emphasis on the European and transatlantic solidarity. Lithuania will need your help to adjust more quickly to the standards and norms prevailing in the Euro-Atlantic area, but on the other hand, we are also ready to contribute our share and to assume our responsibilities.

Today Lithuania is a stable democracy having a sustainable market economy. Our GDP has been steadily growing for the last seven years. Foreign investments, too, have increased and reached $3 billion. Meanwhile, inflation has been gradually going down and has barely exceeded 2 percent per year since 1998.

I am sure that most of you have seen the report issued by Goldman Sachs in which they evaluated Lithuania’s economic performance in the year 2001, calling Lithuania the ballastic Baltic, and saying that “Lithuania is bucking the global gloom with very impressive economic performance, built around fiscal rectitude and a well-functioning currency board. We think it will continue to do so.”

Lithuania’s national economy is already able to withstand the pressure of competitive market forces. Lately, our exports to Western markets have been growing, the import flows from the West are also on an upward trend.

It is encouraging that the pattern of Lithuania’s export markets has changed. In 1996, exports of Lithuania to the EU was only thirty three percent (33%), while to the CIS (Commonwealth of Independent States) – forty five percent (45%). Today, just 5 years later, the export direction has changed drastically. Our exports to EU grew to forty eight percent (48%) and to the CIS countries dropped to twenty percent (20%). The United Kingdom, Latvia, Germany and Russia are the major export partners of Lithuania. Exports to the U.S. are still only 3.8 percent of our total export volume.

Two important lessons can be drawn from our transition experience. First, that hard and consistent work can do almost the impossible. From the ruins of totalitarianism, Lithuania has emerged as a modern country, democratic and economically sustainable, and although much remains to be done, we are confident that the way we have chosen is the right road.

The second lesson is that any help from outside can contribute significantly to the success of ongoing reforms. Here today is the right place and occasion to express this, because the United States has been one of the most enthusiastic supporters of Lithuania’s democratization. I have in mind not only the active political support that my country received from Washington, but also the growing U.S. economic involvement in Lithuania. During this decade, direct foreign investment from U.S. increased to two hundred million dollars. Our bilateral trade has grown more than five times and reached a quarter of a billion dollars. And even more significant than that is the support that our schools and universities, along with various public institutions, have received directly from the American people and non-governmental organizations.

These contributions, has strengthened not only the political will of Lithuania, but also our economic and administrative capability to contribute to the Euro-Atlantic security.

On the other hand, the United States has also gained economic benefits from transformations in Central and Eastern Europe. Many U.S. companies are now operating profitability in Lithuania. The American markets are beginning to import high-quality Lithuanian products. For example, Lithuania is now the fourth-largest exporter of cheese to the United States.

Generally, Lithuania’s experience of cooperation with American companies has been positive. And we do desire and look forward to a growing presence of respectable American companies in Lithuania. As part of the EU enlargement process, Lithuania will soon join the European single market. We expect to remain cost competitive. For example, wages in Lithuania, are below the EU average, while the quality of our labor force is as good as in all parts of the Union. I see our entry into the EU as a great opportunity for the businessmen from both the United States and Lithuania.

The Central and Eastern region is critical to the future of Europe. It has suffered during the 50 years of oppression and is now lagging in social and economic terms behind the rest of Europe. Closing this gap and bringing Central and Eastern Europe back to normal is a very important task today. Frankly that is the only way to assure Europe’s prosperity and stability.

Now I would like to discuss briefly with you three important issues facing us during our integration process.

First, energy.

The future of nuclear energy is widely debated not only in Lithuania, but also in the entire world. The experience of many European countries and the United States has proved that nuclear power plants are a reliable source of energy, able to satisfy the demands of a rapidly growing economy. Today the United States, France, Japan and other countries discuss possible development of more cost effective nuclear reactors of the fourth generation.

This is a future prospect that Lithuania has to take into account.

We must stress that shutting down the existing reactors of the Ignalina Nuclear Power Plant does not preclude us from building in the future a modern nuclear power plant satisfying all technical and safety requirements and standards. Already now we have to consider and analyze all possible options of a new nuclear power plant and determine whether it would be feasible to build a new reactor. I would like to invite you also to join in this discussion.

Second, agriculture. Tough negotiations on the Common Agricultural Policy stand before every aspiring member into the EU. We expect that all farmers of the enlarged Union will be ensured equal conditions for fair competition.

Third, infrastructure.

Lithuania can be a truly promising North-East centre of logistics in the EU. Two main axes can be singled out here. First, in the North-South direction connecting the eastern part of the Baltic Sea. Second, in the West-East direction, which could become a large-capacity multi-modal logistic centre after extending the European gauge railway up to Kaunas.

The future of the infrastructure of our region is much more than an issue of local concern. It will largely determine not only the progress of our own country and that of our neighbours, but also the free movement of people in the future territory of the enlarged European Union. The condition of our roads, pipelines and airports will have an impact on the European Union's trade with the East, consequently, on the overall development of the European economy.

We will, therefore, using the support from regional and international funds, seek that Lithuania becomes a link connecting Central, Northern and Eastern Europe.

Ladies and gentlemen,

During the first stage of our national development we have created a functioning democratic political system. Our next task is to expand and reinforce it. We have to continue to strengthen our state fundamentally and to firm up a stable democratic order that would unequivocally respect and protect human rights and freedoms. This must be accomplished to ensure that our nation remains secure and independent.

The next phase calls for elimination of the economic backwardness of the country and creation of a modern economy based on advanced technologies. That is an ambitious goal. Yet, I am confident that we will achieve it.

Enlargement is not new to the European Union. All challenges were successfully addressed in the past. Today’s Euro-integration must also be successful, and it will be if the government officials and the business people, like you, work together to ensure the well-being of Lithuania.












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