P 031354Z APR 09
FM AMEMBASSY VILNIUS
TO SECSTATE WASHDC PRIORITY 3404
INFO EUROPEAN POLITICAL COLLECTIVE PRIORITY
AMEMBASSY MINSK PRIORITY
AMEMBASSY PRAGUE PRIORITY 
AMEMBASSY TALLINN PRIORITY

UNCLAS VILNIUS 000180 
 
 
SIPDIS 
 
PLEASE PASS TO H FOR CODEL BERKLEY FROM AMBASSADOR JOHN 
CLOUD 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON ENRG OREP LH
SUBJECT: LITHUANIA: SCENESETTER FOR VISIT OF CODEL BERKLEY 
 
REF: STATE 27301 
 
¶1.  Welcome to Lithuania!  We look forward to your visit, 
which coincides with a number of local celebrations.  This 
year marks the fifth anniversary of Lithuania's membership in 
NATO.  Lithuania is also celebrating the 1,000-year 
anniversary of the first reference to the country in 
historical texts, and Vilnius is one of Europe's 2009 
Capitals of Culture.  The United States and Lithuania enjoy a 
friendly and productive bilateral relationship based on a 
century of immigration, as well as our non-recognition of the 
forcible incorporation of Lithuania into the Soviet Union. 
Lithuania was delighted to join the Visa Waiver Program late 
last year, allowing easier travel to the United States. 
Lithuania has been a staunch U.S. partner, sending troops to 
Kosovo and Afghanistan.  The Government of Lithuania (GOL) 
and all mainstream political parties value the friendship 
with the United States, as evidenced by the fact that you 
will meet with the President, the Prime Minister, the 
parliamentary Speaker and the leader of the opposition. 
 
--------------------- 
Preview of Your Visit 
--------------------- 
 
¶2.  I look forward to  greeting your delegation upon arrival 
at the Vilnius airport on Wednesday and you will also meet 
with President Valdas Adamkus that afternoon.  On Thursday, 
you will meet Seimas Speaker Arunas Valinskas, opposition 
leaders in the Seimas, and Prime Minister Andrius Kubilius. 
You will have lunch Thursday with Belarusian opposition 
leaders and Embassy Minsk Charge d'Affaires Jonathan Moore. 
At other meetings you will have the opportunity to discuss 
economic and energy topics, Russia relations and Jewish 
issues with a variety of experts from government, business 
and academia.  Another issue the Embassy has worked hard to 
resolve, but so far unsuccessfully, is the hardship on 
American families caused by a restrictive Lithuanian 
residency law. 
 
--------------------- 
Relations with Russia 
--------------------- 
 
¶3.  Lithuanian-Russian relations are complicated, and 
historically have been characterized by occupation and 
repression.  In the last century, the Russian Empire and the 
Soviet Union occupied Lithuania from 1900-1918, 1940-1941 and 
then again from 1944-1991.  In 1990, Lithuania became the 
first republic to proclaim independence from the Soviet 
Union.  Today Lithuania's relations with Russia remain 
strained.  Even average Lithuanians were concerned about 
Russian aggression in Georgia last August, but there are 
clearly mixed feelings about whether the best path is to 
engage Russia or try to isolate it. 
 
¶4.  In the economic field, Lithuania is fully dependent on 
Russia for its natural gas supply and largely dependent on 
Russia for oil imports.  Looking ahead, Lithuania's Ignalina 
Nuclear Power Plant (a Chernobyl-style Soviet-era facility) 
will close on December 31, 2009, under the terms of its EU 
accession agreement.  Lithuania presently has no replacement 
ready and has no option to replace this electrical power 
other than increased reliance on Russian resources. 
Lithuania is uncomfortable with Russia maintaining so much 
leverage but developing alternative energy sources will take 
time.  Russia is also Lithuania's largest trading partner. 
 
¶5.  Lithuania has a small (five percent) Russian minority, 
which plays no significant role in domestic politics.  When 
Lithuania regained its independence, ethnic Russians living 
here were able to apply for Lithuanian citizenship, which has 
allowed Lithuania to avoid ethnic tensions that have troubled 
the other Baltic states. 
 
¶6.  Some in Lithuania may be ready to tentatively hit the 
restart button together with allies.  The Lithuanian Foreign 
Ministry has signaled an increased willingness to engage 
Russia on border, cultural and diplomatic initiatives. 
 
------- 
Belarus 
------- 
 
¶7.  Lithuania and Belarus share a relatively long (679-km) 
border and much history.  As a result, the GOL focuses much 
attention on pulling Belarus toward the West and democracy. 
Lithuania strongly supports Belarusian participation in the 
EU's Eastern Partnership initiative, which is set to launch 
in May of this year. 
 
¶8.  In addition to engaging the Government of Belarus 
directly, the GOL supports organizations that have been 
shunned by the Lukashenka regime.  The European Humanities 
University (EHU) was closed by Belarusian authorities in 
2004, but re-launched its activities in Vilnius in 2005 and 
has been operating in exile ever since.  There are also a 
number of NGOs working out of Vilnius on Belarusian 
human-rights issues including the International Republican 
Institute, the Human Rights House and the Eastern European 
Studies Center.  The GOL also supports an annual rock concert 
"B2Gether" on the Lithuanian-Belarusian border to promote 
friendship and freedom. 
 
------------- 
Jewish Issues 
------------- 
 
¶9.  Lithuania has struggled to deal with the effects of the 
Holocaust and the involvement of Lithuanians in it.  This 
embassy has been deeply engaged with the GOL to push for the 
restitution of Jewish communal property and for the 
protection of a historic Jewish cemetery in the Snipiskes 
neighborhood of Vilnius.  Congress passed concurrent 
resolutions critical of the GOL on both of these topics last 
year.  Lithuania also has appeared more zealous in efforts to 
investigate Jewish WWII partisans who fought alongside Soviet 
troops than Nazi collaborators, and some politicians clearly 
consider the Soviets a greater historical evil than the 
Nazis. 
 
¶10. Lithuania is one of the few countries in Europe that has 
not resolved the issue of communal Jewish property 
confiscated by Nazi or Soviet occupation forces.  For years, 
successive governments have promised -- and failed -- to 
introduce restitution legislation in the Seimas (parliament). 
 The current government has published draft legislation, but 
Jewish leaders say they were not consulted before the 
government unveiled the latest proposal.  It calls for 
monetary compensation for the stolen properties, but how the 
valuation of these properties was determined is unclear. 
 
¶11. The historic Jewish cemetery in the Snipiskes area of 
Vilnius was the main burial ground for Vilnius's large Jewish 
community for several centuries. It was largely destroyed by 
the Soviets, who removed headstones and used them in other 
construction projects, although many graves remain in place. 
In 2006-2007, the GOL allowed the construction of 
office/apartment buildings in one corner of the site, despite 
significant evidence that they likely were partially inside 
the cemetery's boundaries.  We have urged the government to 
work with Jewish groups to protect and appropriately 
memorialize the cemetery site in its entirety. 
 
¶12. Although the Justice Department's Office of Special 
Investigations (OSI) has provided the GOL with extensive 
files of evidence on Lithuanian-born Nazi collaborators, few 
have been prosecuted here and none has been imprisoned.  Yet 
the Prosecutor General's office last year actively pursued 
investigation of several elderly Jews, who had been anti-Nazi 
partisans, about mass killings of Lithuanians allegedly 
committed by fighters allied with Soviet troops during World 
War II.  Although the GOL dropped the case against the most 
well-knowm of these partisans, General Arad, the prosecutor 
continues to want to interview others as potential witnesses. 
 
----------------- 
Economic Downturn 
----------------- 
 
¶13. After years of strong growth, the economy has reversed 
course.  Unemployment levels have increased from 3 percent in 
September 2008 to 8.2 percent in March 2009. 
 
¶14. As revenues decline, the government's budget deficit is 
growing, despite earlier budget cuts and tax increases.  The 
GOL slashed spending by approximately 15 percent at the 
beginning of this year, and is now seeking approximately 1 
billion dollars of additional cuts -- about 11 percent of the 
original budget. The Finance Ministry now anticipates 
negative growth of 10.5 percent this year. The prime minister 
recently said that the GOL would consider laying off 4,000 
public-sector employees, approximately 20 percent of total 
staff. 
 
¶15. External borrowing, already a challenge, should become 
more difficult following Standard and Poor's recent lowering 
of Lithuania,s sovereign credit rating to BBB/A-3 from BBB 
plus/A-2. 
 
¶16.  The United States ranks 11th in Foreign Direct 
Investment (FDI) in Lithuania.  U.S. direct investment stands 
at $347.5 million, or 2.5 percent of total FDI, trailing well 
behind neighboring and other European countries.  At the 
corporate level, though, three of the six largest foreign 
investors in Lithuania are American firms: Philip Morris, 
Kraft and Mars. 
 
----------------------- 
Residency for Americans 
----------------------- 
 
¶17.  In November 2006, the Parliament amended the law on the 
legal status of foreigners so that it requires foreign 
workers from non-EU countries to live in Lithuania for two 
years before their family members can receive residency 
permits and join them.  The change has caused hardship for 
the private American community in Lithuania including the 
families of teachers, Fulbright Scholars, businesspeople, 
military-exchange participants, and basketball players 
working in Lithuania.  The law now creates a disincentive for 
a variety of professionals to work in Lithuania and limits 
the potential for Americans and others to share their 
cultural and business talents with Lithuania.  Despite our 
intense attention to this problem, there has not yet been an 
amendment proposed that would resolve it. 
 
¶18.  All of us at Embassy Vilnius very much look forward to 
seeing you in Lithuania April 15-17, and wish you safe 
travels. 
 
 
CLOUD