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Lithuania: Is EU Largesse A Victory Or A Defeat?

  • Valentinas Mite

Of the 10 candidate countries slated to join the European Union in May 2004, Lithuania will get the biggest financial assistance per capita: 390 euros during the first years after accession. By contrast, Poland, which had the thorniest negotiations with Brussels, will get only 166 euros per capita, and the Czech Republic will get just 87 euros per person. Lithuania has praised its negotiators for securing the relatively generous financial package. But what do big assistance figures say about country's economy and prospects? Do the figures illustrate success or defeat?

Prague, 16 December 2002 (RFE/RL) -- At 390 euros ($399) per person, Lithuania will receive more per capita financial assistance from the European Union at the time of accession than any of the other nine countries to receive invitations to join the EU during last week's Copenhagen summit.

Petras Austrevicius, Lithuania's chief EU negotiator, told RFE/RL the results far exceeded expectations. "The total amount [of EU support for Lithuania] has changed quite a bit. I cannot say what the exact final figure of the upcoming assistance is, because our experts still have to sit down and count it. But I can say for sure that we have managed to get more assistance than was promised at the beginning [of the negotiations]," Austrevicius said.

Nearly 10 percent of the Lithuanian per capita assistance will go toward shutting down the country's Ignalina nuclear-power plant. Vilnius has pledged to shut down the first reactor of the Soviet-model power station in 2005 and the last one in 2010.

Austrevicius described the 348 euros per capita that remain after Ignalina costs as a "fairly large amount of money" and pointed to Poland and the Czech Republic by way of comparison. Poland, whose fractious negotiations with the EU continued virtually until the final moments of the Copenhagen summit, will receive 166 euros per capita. The Czech Republic comes in even lower, at just 87 euros per person.

For Lithuanian farmers, who make up some 17 percent of the population, the outlook is even brighter. They will be offered some 800 euros per capita.

Austrevicius admitted that the EU's munificence springs from a humble reality: Economically, Lithuania is one of the weakest of the 10 candidate countries slated to join the EU in May 2004.

Lithuania's GDP is just 38 percent of the EU average, a poor economic status it shares with its Baltic neighbors, Estonia and Latvia, which are due to receive 360 and 350 euros, respectively, per capita in EU assistance.

Austrevicius said: "Lithuania is a poorer state [than Poland and the Czech Republic] and, according to the objective criteria, it deserves more assistance. The other point is that we are a small state, and the status of a small state always enables it to get relatively more support. The same is true with Estonia and Latvia."

Radek Khol is an analyst with the Czech Institute of International Affairs. He said Czech voters and politicians should be happy with the relatively low assistance package offered by the EU because of what it says about the country's economy. "The situation of the Czech Republic, in comparison to all three Baltic republics, is viewed by the EU as much better, both [in terms of] the social and economic situation of its citizens [and in] the rate of the development of the country," Khol said.

Khol said the Czech capital Prague is the only region in all of Eastern Europe where incomes equal the EU average, and as a result is not eligible for any EU assistance. He said that on the whole, the Czech Republic has different problems than its neighbors. "Large parts of the assistance to, for example, the Baltic republics, Poland, and Slovakia, and Hungary are dedicated to things which are clearly not [affecting] the Czech Republic, and that is the support for the border control of the new external EU border, because the Czech Republic will be fully surrounded by the EU members. It won't have any external border," Khol said.

Khol said the Czech Republic, unlike Lithuania, also requires less assistance because it is not required to shut down its Temelin nuclear-power plant, which is considered safer than the Ignalina plant.

Alexander Hobza is an analyst with the Center for European Policy Studies in Brussels. He told RFE/RL that some candidate countries might be wrong to assume that a low financial package reflects a clean bill of economic health and that it will be important to watch how successful each of the countries is in spending its assistance wisely. "I have the feeling this will be the same problem in all the candidate countries, because on one hand, the Czech Republic might have higher GDP in whatever purchasing priorities or in nominal prices than, for example, the Baltics. But I am not that sure how it is with the level of corruption, because the recent indices of corruption are showing that the Czech Republic is not scoring very well," Hobza said.

Hobza noted that the international corruption watchdog Transparency International, in its annual corruption index, gave the Czech Republic a relatively poor ranking (52nd place), behind fellow candidates like Slovenia, Hungary, and Lithuania.