SCENESETTER FOR CODEL KOLBE

UNCLAS SECTION 01 OF 04 VILNIUS 001057

SIPDIS

FOR CODEL KOLBE FROM AMBASSADOR STEPHEN D. MULL

STATE FOR EUR/NB, H AND RM/F/DFS/FO/AA/CAA

E.O. 12958: N/A
TAGS: PGOV PREL OVIP BO LH
SUBJECT: SCENESETTER FOR CODEL KOLBE


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Introduction
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1. Congressman Kolbe, thanks to you and your colleagues for
traveling to Lithuania. Your visit here will provide an
opportunity to show gratitude to Lithuania for its staunch
and unwavering support in the U.S.-led Global War on
Terror, including its decision to establish and lead a
Provincial Reconstruction Team in Chagcharan, Afghanistan,
and to commend its leadership in promoting democratic
initiatives in the region. Planned meetings with President
Adamkus and Speaker of Parliament Paulauskas will afford
you the chance to celebrate and strengthen the already
exceptionally friendly bilateral relations the United
States shares with Lithuania.

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Lithuanian History in Brief
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2. The rich culture of Lithuania goes back more than two
thousand years. Lithuanians are a branch of the Balts, who
probably settled in the region around 200 B.C. Lithuanian
is one of the oldest languages in Europe. The first
written mention of Lithuania was in the Annales
Quedlinburgenses in 1009 A.D.


3. The Grand Duke Mindaugas established the first
Lithuanian state in 1230. He converted to Christianity
briefly and was crowned king of Lithuania in 1252. The
Grand Duke Gediminas, who reigned from 1316 to 1341, is
credited with founding Vilnius, at the confluence of the
Neris and Vilnia rivers, and a dynasty that united
Lithuania and Poland from 1386 until 1795.


4. Lithuania progressively entered European culture. At
the Union of Lublin in 1569, the Polish-Lithuanian kingdom
was formally merged into a commonwealth headed by a
monarch. This union came under threat from Prussia,
Austria, and Russia at the end of the 18th century. In
1795, Russia annexed most of Lithuania and tried to impose
Russian culture.


5. On February 16, 1918, Lithuania regained its
independence and restored its statehood. Lithuania
remained free for only 22 years. In 1940, the Soviet Union
occupied Lithuania; Nazi Germany overran the country the
following year; and the Soviets returned in 1944. Armed
resistance against the Soviets continued for several years
after the end of World War II. For more than 50 years
under the Soviets, Lithuanians held onto the goal of
independence.


6. In February 1990, the anti-Communist popular movement
Sajudis won an overwhelming majority in free parliamentary
elections. That March, the Supreme Council, under the
leadership of Prof. Vytautas Landsbergis, restored
Lithuania's independence. Lithuania became a member of the
United Nations on September 17, 1991. The last Soviet
soldier left in August 1993. In April 2004, Lithuania
joined NATO. In May 2004, Lithuania became a member of the
European Union.

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Background
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7. Rapid economic growth and development characterize
Lithuania's trajectory from Soviet occupation to a maturing
democracy and free-market economy. Politically, Lithuania
strives to deepen the transatlantic alliance and present
itself as an active participant in international political
fora. Our coalition partner in Iraq, ally in the United
Nations and NATO, and a leading exporter of democracy in a
difficult neighborhood, Lithuania has risen to donor status
farther afield in Iraq and Sudan. Lithuania's footprint
goes far beyond what one would expect from a country of
such small size (population 3.5 million) and with such a
short time on the field. On the home front, Lithuania last
year weathered a turbulent presidential impeachment that
put the young democracy under international scrutiny.
Closely adhering to transparent democratic principles and
procedures, Lithuania returned a centrist, unifying figure
to the presidency.

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Growing Pains of a Maturing Democracy
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8. Lithuania inaugurated Valdas Adamkus on July 12, 2004 as
its fourth president since the restoration of independence
in 1991. Adamkus, a former American citizen, previously
served as president from 1997 to 2002, when he lost his bid
for reelection to populist Rolandas Paksas. Adamkus
regained the presidency following Paksas' impeachment and
removal from office in April 2004 in proceedings that
rocked the nation and tested the democratic institutions of
the young republic. Lithuania thereby obtained the dubious
distinction of being the only European democracy to have
removed its head of state. The process was bumpy, but
largely transparent and democratic. In the aftermath of
the impeachment, Lithuania played out a highly charged
contest for the presidency that pitted the centrist Adamkus
against a candidate whose populist agenda promoted
increased social spending, reconsideration of Lithuania's
participation in Iraq, and, most notably, decreased U.S.
influence in Europe. Adamkus cast his victory in this
contest as confirmation of a foreign policy agenda that
highlights the importance of the U.S. presence in Lithuania
and Europe.


9. Lithuanian voters widely supported the country's
entrance into the European Union and NATO in 2004. These
memberships were the first steps in Lithuania's long-term
political strategy that envisions a leadership role in OSCE
and ECOSOC, membership in OECD, and active participation in
NATO and the EU.

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Growing Economy
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10. Lithuania is one of the fastest growing economies in
Europe. The country's robust economic growth continues,
having slowed from 9.7 percent GDP growth in 2003 to a
still enviable 6.7 percent increase in 2004. Analysts
forecast annual average real GDP growth of 6.5 percent in
2005 and 6 percent in 2006. Domestic demand will continue
to drive economic growth, as households benefit from wage
increases, falling unemployment, and low interest rates.
Lithuania looks to attract foreign investment to sustain
long-term growth, which complements our own objective of
attracting more U.S. investment to this dynamic economy.
The U.S. runs a trade deficit with Lithuania, with imports
exceeding U.S. exports by about USD 144 million in 2004.


11. Uncertainty surrounds the future of the Lithuania's
Mazeikiu Nafta (MN) oil refinery, currently under
management of the major shareholder Yukos. MN accounts for
two percent of GDP and is one of the largest employers in
the country. All of the leading candidates to purchase the
refinery have ties to Russian energy companies. Continued
economic growth depends to a large extent on the ability of
the oil refinery, terminal, and pipeline complex to
maintain stable supplies of oil.

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An Enemy of Lithuania is an Enemy of the U.S.
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12. Common values, a history of mutual support, and common
goals for regional security bind Lithuania and the United
States. Lithuania continues to recognize a debt of
gratitude to the United States for having maintained a
policy of non-recognition of Baltic annexation throughout
the years of Soviet occupation. Following the restoration
of Lithuania's independence, the U.S. cemented the
friendship, providing political and financial support to
Lithuania, welcoming the country into the transatlantic
alliance, and supporting Lithuanian membership in NATO and
the European Union.


13. Lithuania is a reliable transatlantic partner and a
strong advocate of NATO's central role in ensuring security
in the Euro-Atlantic area. As a new member of NATO,
Lithuania has politically and materially supported the
alliance's international missions. Lithuania currently has
boots on the ground in Afghanistan in support of ISAF, and
is leading a Provincial Reconstruction Team in Chagcharan
in Afghanistan's remote Ghowr province. In Iraq,
Lithuanian soldiers serving under Danish and Polish command
conduct patrols, assist in maintaining public order, and
are involved with rebuilding and reconstruction efforts.
British, Danish, and Polish commanders have all commended
Lithuanian soldiers' skills and professionalism. The
Lithuanian Parliament has already authorized these
international deployments through the end of 2007.
Lithuanian soldiers have also performed admirably as
peacekeepers in the Balkans and in 2006 will begin serving
with Polish and Ukrainian personnel in a joint peacekeeping
battalion in Kosovo.

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A Friend to the U.S. in Time of Need
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14. Lithuania offered more than 8,000 food rations, ten
water pumps, and medical supplies to victims of Hurricane
Katrina. (Ultimately, FEMA decided that the assistance was
not required.) The Lithuanian Red Cross raised more than
$14,000 in private donations; one elderly woman donated her
entire life savings to the relief effort in gratitude for
U.S. support for Lithuania.
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Lithuania Active in the "Near Abroad"
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15. Lithuania's accession to the European Union and NATO
opened new opportunities for the GOL to engage with its
neighbors to the east, most notably in the context of the
EU's "New Neighborhood" policy. Leveraging its historical
experience as part of the Soviet Union, Lithuania seeks to
assist the transition by former Soviet states to democracy
and integration into European institutions such as the EU
and NATO. In Belarus, Lithuanian governmental and non-
governmental organizations work with nascent democratic
forces both bilaterally and through regional frameworks
such as e-PINE. President Adamkus was instrumental in
mediating the election crisis in Ukraine, and Lithuania is
one of the most vocal advocates for Ukraine's bid to become
a member of the EU and NATO. Lithuania supports Moldova's
aspiration to join the EU and encourages the countries of
the South Caucasus to pursue European integration.

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Lithuanian-Russian Relations
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16. Lithuania works hard to maintain good relations with
Russia. Mutual interests in transit, energy, and security
issues attract high-level attention in both Vilnius and
Moscow. GOL and GOR leaders periodically convene an
intergovernmental council to discuss concerns. The
September 15 incursion and crash of a Russian SU-27
fighter-bomber in Lithuania's territory has recently tested
Lithuanian-Russian relations. Despite public expressions
of pique from officials and politicians in both capitals,
however, both governments maintain the episode will not
have a lasting impact on bilateral relations. (The armed
aircraft was part of a six-jet convoy traveling from St.
Petersburg to Kaliningrad when it apparently experienced
navigational problems, ran out of fuel, and crashed 90
miles west of Vilnius. The Russian pilot, who safely
ejected, is currently under house arrest and undergoing
questioning by Lithuanian authorities.) The issue has
refocused public attention on the role and importance of
NATO's Baltic air-policing mission for the region.
American F-16s assumed command of this mission October 1,
and will be here until the end of the year. Polish
fighters will relieve our forces here on January 1, 2006.

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The Special Lithuanian-U.S. Relationship
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17. Starting in the 19th century, a flood of Lithuanians
fled poverty and oppression in their homeland and
immigrated to the United States. These longstanding ties
of family and culture remain strong. After World War II,
Lithuanians received decisive moral support from the United
States, which refused to recognize the Soviet annexation of
Lithuania. After regaining their independence, Lithuanians
have continued to view our country more favorably that most
Western Europeans. This reflects longstanding goodwill
toward the United States as well as the widely held view
that the United States presents the only credible defense
against recrudescent domination from the east.

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Preview of Your Visit
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18. I'll host a country-team briefing at the beginning of
your stay, and a reception in your honor featuring
Lithuania's best and brightest. We have also arranged
briefings for you with two of the most important
beneficiaries of U.S. assistance, the Minister of Defense
and Director of the State Security Service (the Lithuanian
equivalent of the FBI). To give you a sense of conditions
in the neighboring country of Belarus, we are working with
IRI and NDI to bring you together with prominent members of
the Belarusian opposition. Finally, we are working to
confirm meetings for you with the President and the Speaker
of Parliament. All of us here at Embassy Vilnius very much
look forward to your visit. We'll see you on Monday!

MULL