An exclusive Fair Observer interview with former Lithuanian Prime Minister Gediminas Kirkilas.

Lithuania is one of the smallest countries in Europe. A diverse nation in terms of its ethnic make-up, Lithuania has a population of around 2.9 million people.

After two occupations by Soviet forces in 1940 and 1944, and a Nazi invasion in 1941, Lithuania eventually declared independence in 1990 and joined the European Union (EU) in 2004. Lithuania does not make international headlines as often as its neighbors, but is strategically positioned as an eastern NATO member and is considered a free country by Freedom House. The country became a NATO member during the second post-Cold War round of enlargement in 2004, and has a thriving economy with plans to adopt the euro in early 2015.

In an exclusive interview with Fair Observer, the former Lithuanian prime minister, Gediminas Kirkilas, talks about the prospects of democracy and economic progress in Lithuania, the country’s relations with Moscow following the eruption of an EU-Russia standoff over Ukraine and the most pressing issues in the Middle East.

Kourosh Ziabari: Has Lithuania been able to successfully cope with the problem of inflation? During the mid-2000s, the country suffered from the impacts of the worldwide economic recession and, in 2008, the inflation rate rose to about 11%. However, in recent years, inflation decreased dramatically, standing at about 1.2% in 2013. Was the high inflation rate one of the reasons why Lithuania hasn’t been able to join the euro zone yet? Can you confirm the plans to adopt the euro in 2015?

Gediminas Kirkilas: Yes, we have successfully managed inflation and, yes, it is now for sure that Lithuania will adopt the euro in January 2015. We fulfill all the Maastricht criteria, including the inflation rate. The year 2008 was the only time inflation reached above 10%. However, this was a trend in the whole Baltic region at the time, with Latvia reaching 15.3% and Estonia 10.6%. The three Baltic countries were the fastest growing economies in Europe before the economic and financial crisis — so, naturally, it hit us the hardest.

I believe it was not inflation rate that damaged Lithuania’s first attempt to join the euro zone in 2006. Yes, we had inflation just 1% higher than it was supposed to be but, in practice, the other EU member states were able to adopt the euro under similar circumstances. However, Lithuania was supposed to be the very first among the post-communist EU members to join the euro zone — eventually, the first was Slovenia in 2007, so we were under the reading-glass.

Inflation was the major issue during the economic transition in the early 1990s but, during periods of stability, Lithuania managed to keep it moderate.

Ziabari: The president of the European Central Bank, Mario Draghi, has praised Lithuania as a role model for economic development and growth for all European nations. The country is considered as one of the fastest-growing economies in the EU. How did it overcome the staggering economic recession of 2008-09? Can Lithuania be a leading example of economic growth in the region?

Kirkilas: Of course, and Lithuania aims at economically growing not only fast, but also being socially equal. That is one of the main priorities of the current coalition government led by the Social Democrats. That was also my priority, when I was prime minister of Lithuania in 2006-08. During that period, Lithuania reached a new level of social equality and material prosperity.

It is the way Russia conducts its foreign policy through pressuring and threatening, as well as keeping its neighbors dependent on Russian energy sources. Our task is to be able to withstand it wisely and increase our energy independence.

Nevertheless, during the economic crisis, Lithuania was ruled by the center-right coalition government with a prime minister from the Conservative Party. They made a huge mistake by fighting the crisis merely with strict austerity; the target groups for drastic savings were the most socially vulnerable such as pensioners, the disabled, children or single mothers. Unfortunately, Lithuania was the only country in Europe to cut pensions. As a result, social inequality and poverty reached new heights.

Moreover, the Conservative-led government drastically cut the defense budget, which damaged Lithuania’s reputation among NATO partners. The current Russian foreign policy clearly proves that this decision was very irresponsible because it put our country in danger.

Therefore, I could not say that Lithuania could be called a role model regarding the way it handled the economic crisis. Our center-left government had to make difficult decisions immediately after coming to power in late 2012 to repair the mistakes of the former government. Today, we are also doing everything to increase the defense budget. On March 29, seven parliamentary political parties signed an agreement on reaching 2% of GDP [gross domestic product] for defense expenses before 2020.

I believe that only a model of economic growth that is job-, equality- and security-oriented can be a leading example. The goal and task of the current government is to make Lithuania more socially equal, because prosperity always goes hand-in-hand with social equality. A society with social equality can be happy because there are so much less tensions. However, society must also feel safe and secure.

Ziabari: How is Lithuania meeting its growing energy demands? Are you still following up with your previous plans for building a joint nuclear power plant with Poland, Estonia and Latvia that was said to be completed by 2016? Does the International Atomic Energy Agency have any concerns about the construction of a nuclear plant in Lithuania?

Kirkilas: Lithuania seeks energy independence from Russia. Together with Poland, we managed to put energy security at the top of the EU agenda. In November, the liquefied natural gas terminal is to open in Klaipeda, which will provide us with more energy independence. We are also working on integration into the European electricity networks through Poland, Sweden and the other Baltic States.

The plans for the nuclear power plant are currently on hold. I am pro-nuclear energy because it is clean and, I believe, can be safe. During my time as prime minister, I initiated the construction of a nuclear plant through the public-private partnership with a major Lithuanian company. However, the Conservative-led government terminated the project immediately after coming to power in late 2008. Later, they presented their own project for the nuclear plant, but it was way too expensive and Lithuanians did not approve it in the referendum. The current prime minister, Algirdas Butkevičius, who is a Social Democrat, is a careful decision-maker. He is still analyzing the situation to make up his mind on the nuclear plant.

Ziabari: On Lithuania’s dispute with Russia over the construction of a nuclear power plant in Visaginas, I read that Moscow has issued a warning, implying that if you don’t purchase their reactors, they will ruin the whole project, and that is why it agreed with Belarus to build a nuclear power plant on your border. What is your take on that? I read that you criticized the government of President Dalia Grybauskaite for lacking “strategic thinking.” Why do you think the Russians are opposed to the construction of Lithuania’s power plant, and in what ways do you think the government has mishandled the issue?

Kirkilas: It is the way Russia conducts its foreign policy through pressuring and threatening, as well as keeping its neighbors dependent on Russian energy sources. Our task is to be able to withstand it wisely and increase our energy independence.

Regarding our president, Dalia Grybauskaite, she made a few big mistakes during her first term in office regarding security and foreign policy matters. She did not foresee that the threat from Russia would soon return; blessed the decision of the former government to decrease defense expenditures; and did not invest in relations with our strategic partners — the United States and Poland. Apparently, she realized her mistakes and is now trying to repair the situation. However, her misjudgment about the security situation in the region revealed this lack of strategic thinking.

Ziabari: How have EU sanctions and punitive measures against Russia over the crisis in Ukraine affected your relations with Moscow? Has Lithuania been forced by NATO and the EU to implement the sanctions regime and cut its trade with Russia? Do you think the current standoff between Russia and the EU will persist and pose threats to the security of the Baltic states, including Lithuania?

Kirkilas: Relations with Russia are complicated. Lithuania, together with NATO and the EU, implements the sanctions regime. Bilateral trade has also suffered. Our producers and transporters of milk and meat products have experienced losses, forcing them to find new markets.

The situation in the Gaza Strip has always been very sensitive. I empathize with both the Israeli and Palestinian people.

Iran could be one of these new markets for Lithuania, especially for meat export. Just recently, the Lithuanian parliament adopted a law allowing Islamic ritual slaughter, which opens the door for more economic cooperation and cultural respect between Lithuania and Iran.

The situation in Ukraine is especially complicated and I feel terrible, knowing how difficult it must be for the Ukrainian government and people. Lithuania tries to do everything through bilateral and multilateral means of diplomacy to assist Ukraine.

Today, we need to be realistic and careful about the threat Russia poses for the three Baltic States. We are now trying to do everything to be more secure, to keep to our commitments to NATO and make our military and society ready.

Nevertheless, I still have not lost hope that one day Russia will change its behavior and eventually choose democracy and peace. President Vladimir Putin needs to understand that the only way the Russian people can be prosperous and happy is when Russia re-joins the community of democratic countries. I am an optimist and realist.

Ziabari: A number of European countries largely depend on Russia for their natural gas supplies. The president of a Lithuanian think-tank recently said that Lithuania is completely dependent on Russia for gas, and the EU-US sanctions may cause serious energy troubles for those European states that import Russian gas. How is Lithuania going to address this concern? Do you have other alternatives to replace Russian gas?

Kirkilas: As I have already said, we are working on it. We are seeking to become energy independent from Russia through the liquefied natural gas terminal, electricity networks with Sweden and Poland, alternative energy, etc. The capacity of the gas terminal will be sufficient for Lithuania’s needs. However, we will not decrease Russian gas levels immediately. It is a business matter, not only politics; so if the gas prices satisfy us, we will continue buying gas from Russia. As with national security, Lithuania also has become more prudent with energy.

Ziabari: President Grybauskaite and Prime Minister Algirdas Butkevičius have stated they will not support the new EU foreign policy chief, Federica Mogherini, because of her pro-Russian position. Why is it that the four eastern European nations — namely Latvia, Estonia, Lithuania and Poland — opposed her appointment as the High Representative of the Union for Foreign Affairs and Security Policy? What do you personally think about Mogherini and the fact that she will shortly replace Catherine Ashton? Does it matter that she has been supportive of the Kremlin?

Kirkilas: I think it was a bit of an overreaction. Ms. Mogherini is a young and talented politician, who came from a young and promising Italian government. After the appointment as the High Representative of the Union for Foreign Affairs and Security Policy, she made it perfectly clear that her position toward Russia is balanced and prudent.

We should not forget that the entire EU foreign policy is the total act of balance between the member states and their interests. Even if Ms. Mogherini was pro-Russian, she can’t make decisions entirely on her own. I believe she will bring more clarity and power to EU foreign policy.

Ziabari: You’re a member of the Seimas group for inter-parliamentary relations with the Knesset of Israel. What was your reaction to the recent Israeli incursion into the Gaza Strip? Do you consider the killing of Palestinian civilians in the besieged territory  defensible and proportionate? Have you ever tried to reach out to your friends in the Israeli Knesset and pressure them to force the Israel Defense Forces into stopping the military operations against Gaza?

Kirkilas: The situation in the Gaza Strip has always been very sensitive. I empathize with both the Israeli and Palestinian people. The situation is very complicated to judge as it is extremely difficult to solve this long-lasting conflict.

My work in the Seimas group for inter-parliamentary relations with the Knesset mostly focuses on improving bilateral relations and making inter-parliamentary cooperation more active, because it is very useful for political discussions.

Nevertheless, while visiting Israel, I also visited Palestine and met local officials. The point is that we are all here searching for peace — not war or conflict.

Lithuania also had to solve some serious historic issues related to the Holocaust in Lithuania. During the Second World War, Lithuania lost 90% of its large Jewish community. For a long time, our society has not been willing to talk about the Holocaust. My input here, so far, has been that Lithuania as a state and society would become more open and honest about what happened during the war. Therefore, I concentrate more on Lithuanian-Israeli relations, not Israeli foreign policy. Naturally, I am more concerned about Ukraine because Lithuania can help here more.

Ziabari: What do you think about the international coalition against the Islamic State in Iraq and the Levant [ISIS] led by the US and NATO? What is Lithuania’s strategy regarding the rise of this terrorist group? Will Lithuania join the US and other NATO allies to fight against the so-called “Islamic State”? As a major Muslim nation, Iran has strongly condemned the atrocities committed by ISIS, saying that it does not represent Muslims and is an outcast cult. Do you agree with the Iranian officials?

Kirkilas: I believe if some earlier mistakes were not made by the previous US government in Afghanistan and Iraq, we probably wouldn’t have such huge issues with the “Islamic State” today. The US set a wrong precedent, especially by lying about nuclear weapons in Iraq, which has only encouraged terrorist groups and countries such as Russia to break the peace. Hopefully, the international community will no longer make such mistakes, because it opens a way to dishonesty in foreign relations and, ultimately, war and conflict.

I absolutely agree with the Iranian officials. Yes, ISIS does not represent Muslims. Such a position should be voiced everywhere around the world, so people will not discriminate against Muslims.

Ziabari: As a European politician, what’s your view regarding the ongoing negotiations between Iran and the P5+1 over Tehran’s nuclear program? Will the talks succeed and result in a long-term, comprehensive agreement between the two sides? What’s your opinion regarding the role the EU foreign policy chief, Catherine Ashton, has been playing in facilitating and coordinating the talks? How can the three EU countries contribute to the settlement of disputes with Iran?

Kirkilas: The negotiations are a good sign, because the sides are talking, communicating and sharing information, and this builds confidence and security. Therefore, I also hope an agreement will be reached. The involvement of the EU here is only welcomed. I think the most important thing is confidence-building.

Finally, I applaud the new Iranian president, Hassan Rouhani, who seems open-minded and democratic, as well as aiming at finishing Iran’s international isolation and being successful at that.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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