Viewing cable 09VILNIUS419

09VILNIUS4192009-08-05 14:51:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius

DE RUEHVL #0419/01 2171451
P 051451Z AUG 09
C O N F I D E N T I A L VILNIUS 000419 
E.O. 12958: DECL: 08/05/2019 
Classified By: Charge d'Affaires Damian R. Leader for reasons 1.4 (b) a 
nd (d). 
¶1. (C) Summary:  Your visit to Lithuania provides an 
opportunity to reinforce the United States' commitment to an 
already strong bilateral relationship, to address Lithuanian 
concerns about security, Afghanistan and Guantanamo 
detainees, and to remind Lithuanian officials that important 
post-Holocaust issues are still not adequately addressed. 
You are scheduled to meet with Foreign Minister Usackas for 
an informal dinner at his house near Utena, a town north of 
Vilnius; Prime Minister Kubilius plans to attend as well. 
Lithuania has been a staunch U.S. partner, sending troops to 
Kosovo, Iraq and Afghanistan.  However, the GOL has recently 
expressed concern about delays in NATO planning for Baltic 
defense.  The financial crisis has caused deep cuts in 
government budgets, including military expenditures. 
Nevertheless, Lithuania remains committed to the PRT it heads 
in Afghanistan's Ghor Province, but is frustrated by the 
difficulties it has encountered in finding partners to fund 
development projects there.  After being one of the first EU 
countries to agree in principle to accept Guantanamo 
detainees for resettlement, President Grybauskaite is 
reconsidering the issue.  Grybauskaite, in office just a few 
weeks, is more oriented to Brussels than to Washington, 
though she has said the transatlantic relationship remains 
crucial.  Usackas may well raise Grybauskaite's desire to 
meet with the President at UNGA.  End Summary. 
¶2. (C) Lithuania has led the PRT in Ghor province since 2005, 
and currently stations about 250 troops in Afghanistan. 
Despite the country,s financial difficulties (which have 
severely hit the government budget), the GOL remains 
committed to its role in Afghanistan. However, limited 
resources and lack of experience force the GOL to seek the 
help of partners in completing development projects in Ghor 
province.  Lithuania continues to seek partners to fund a 
paved runway at Chaghcharan airport capable of handling C-130 
aircraft; the Asian Development Bank, which has agreed to 
partial financing of the project, has reportedly said that 
reconstruction of the runway to those specifications would 
not go forward if the rest of the 10 million USD required to 
complete the project was not in hand by September 30.  FM 
Usackas recently underscored Lithuania's hope to obtain CERP 
(U.S. Commander's Emergency Reconstruction Program) funding 
for the project.  However, he also reiterated Lithuania's 
commitment to lead the PRT through 2013. We recommend that 
you thank Lithuania for its strong support in Afghanistan, 
encourage it to continue to seek development partners, and 
stress our commitment to help find such partners. 
NATO and Baltic Defense 
¶3. (C) Lithuania is strongly committed to NATO, as shown by 
its role in Afghanistan. President Grybauskaite said publicly 
in late July that NATO contingency plans for Baltic defense 
would not be ready for at least two years (we later learned 
this information came from outgoing NATO SecGen de Hoop 
Scheffer).  We have reassured her staff that the U.S. is 
unwavering on its Article 5 commitment to its Allies, 
including the Baltics.  We pointed out that NATO and EUCOM 
planning goes on constantly, and that EUCOM and the Baltic 
states have a number of exercises which build the capability 
to receive and stage Allied assistance should it ever be 
needed.  You may wish to reiterate our Article 5 commitment 
to Lithuania. 
Guantanamo Detainees 
¶4. (C) Although Lithuania early on agreed in principle to 
accept one or two Guantanamo detainees for resettlement, 
President Grybauskaite is revisiting the issue.  We 
understand the president does not want her first 
foreign-policy decision to be controversial, and accepting 
detainees might not be a good first step for her and could 
cost her valuable domestic political capital.  She has left 
the door open, however, rather than making the easier 
political decision to say no immediately.  We recommend that 
you encourage the GOL to send a team to Washington and 
Guantanamo so it will have all of the information it needs to 
make its decision. 
Economic Issues 
¶5. (U) After years of strong growth, the economy has reversed 
course sharply.  The Statistics Department reported a 22.4 
percent contraction in GDP for the second quarter.  The IMF 
estimates a year-on-year decline of 16-20 percent of GDP for 
all of 2009.  Unemployment levels increased from 4.9 percent 
in the first quarter of 2008 to 11.9 percent in the first 
quarter of 2009.  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, followed by a further 
1.2 billion USD of additional cuts in May and a 77 million 
USD cut on July 23rd. The GOL is likely to add cuts of 
another 300 million USD in the fall.  Further cuts are likely 
to be made to civil service salaries (already decreased), 
pensions, maternity benefits and allocations for parents. 
The prime minister has said that the GOL would consider 
laying off 4,000 public-sector employees, approximately 20 
percent of total staff.  External borrowing, already a 
challenge, became more difficult -- and expensive -- 
following Standard and Poor's March 24 lowering of 
Lithuania's sovereign credit rating to BBB/A-3 from BBB 
¶6. (U) The United States ranks 11th in Foreign Direct 
Investment (FDI) in Lithuania.  U.S. direct investment stands 
at 371 million USD, or 2.8 percent of total FDI, trailing 
well behind neighboring and other European countries.  At the 
corporate level, though, Philip Morris, Kraft and Mars are 
among the largest single foreign investors in Lithuania. 
¶7. (U) Lithuania's relations with Russia remain difficult, 
although the Russian ethnic minority is only six percent and 
has access to Lithuanian citizenship.  Lithuania and its 
people were very concerned about Russian aggression in 
Georgia last August.  Nevertheless, the GOL has been working 
to strengthen its diplomatic relationship with Russia, and to 
lessen distrust on both sides, by focusing on small, mutually 
beneficial steps.  President Grybauskaite has called for 
toning down the rhetoric.  Russia is Lithuania's largest 
trading partner; 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 
Jewish issues 
¶8. (U)  No Lithuanian official likes to discuss 
post-Holocaust issues.   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.  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.  Prime Minister Kubilius recently 
sent a restitution bill to the Seimas (parliament), but the 
local and international Jewish communities have rejected it, 
saying they were not consulted about the compensation plan, 
that the amount of compensation included in the bill was 
inadequate and that the payment mechanism was unspecified. 
We are working with the GOL, the Seimas and the Jewish 
communities to improve the bill. We recommend that you 
welcome the progress Lithuania has made in addressing this 
issue, but that you also note U.S. concerns about the 
limitations in the GOL,s current proposal.  International 
Jewish organizations, including those in the U.S., are 
concerned about the small amount of compensation and that it 
includes only two of the many communal properties stolen from 
the Community and now held by the Lithuanian Government. 
¶9. (U) The GOL in May took an important and welcome step in 
unilaterally protecting from development most of the site of 
the historic Jewish cemetery in the Snipiskes area of 
Vilnius.  That cemetery was the main burial ground for 
Vilnius's large Jewish community for several centuries. 
While applauding the GOL's recent action, we continue to urge 
the government to work with international Jewish groups to 
ensure that the cemetery is protected and appropriately 
memorialized in compliance with Jewish law. 
¶10. (U) We very much look forward to seeing you in Lithuania. 
 This is a beautiful time of year in Lithuania, and we wish 
you safe travels.