ithuania’s remarkable economic growth—the highest in Europe—is set to continue as the country settles in as a fully fledged member of the European Union this year.

Left: The Baroque and Renaissance architecture of cities such as Vilnius and Kaunas is among the attractions for tourists. Right: Klaipeda is the country’s main seaport and makes a vital contribution to its economy.

Strengthening exports and a booming domestic market resulted in an increase in GDP of 10.6 percent in 2003. Foreign direct investment has also been strong, increasing 5.6 percent last year. More than half of FDI comes from EU countries, but the United States is also a major investor, with companies like Philip Morris, Motorola and Kraft Foods well-established in the country.

Algirdas Brazauskas Prime Minister of Lithuania

Algirdas Brazauskas, the Prime Minister, says the rapid changes that have taken place since the collapse of the Soviet Union in 1990 have created a stable government and a strong economy. “The very fact that within the last two years we successfully accomplished negotiations for accession to the EU speaks for itself.”

The largest of the Baltic states, Lithuania will benefit from EU aid. “The financial aid will provide a very strong impetus for the development of our economy, for the creation of new jobs and for the development of the undeveloped regions,” says Mr. Brazauskas.

“It will also help our agricultural sector, which is very important. We expect EU financial support to add an extra 2 or 3 percent to our current GDP growth.”

The Prime Minister believes that Lithuania’s relationship with the U.S. will remain strong. “Lithuania has very strong ties with the United States. There are Lithuanians living in Chicago, Cleveland, and elsewhere,” he says.

Strict fiscal policies have enabled Lithuania to reduce government expenditure and stabilize its macroeconomic fundamentals, while structural reforms have enabled the country to push for growth.

Dalia Grybauskaite Minister of Finance

According to Minister of Finance Dr. Dalia Grybauskaite, “In three years, Lithuania has managed to become the best-performing country in the region and one of the best-performing among countries joining the EU. Lithuania could be one of the first of these new nations in the EU to introduce the euro because we are better prepared.”

Dr. Grybauskaite believes that Lithuania offers definite advantages to U.S. firms looking for new areas of investment and connections with the enlarged EU. “Lithuania, as well as the entire Baltic region, can be used as a platform to go into the larger EU market,” she says.

Petras Cesna, the Minister of Economy, points out that businessmen and investors who come to Lithuania enjoy the same legal environment as domestic investors. “Lithuania has one of the lowest corporate profit taxes in all of Europe, at 15 percent.”

The Minister adds, “Even though Lithuania and the U.S. are separated by the Atlantic Ocean and this has an influence on mutual trade, I don’t think there should be any major changes in our economic relations as a result of our accession to the EU. Of course, there will be some changes in the sphere of customs and other spheres, but I hope that our economic relations will strengthen and develop.”

Mr. Cesna believes there could even be an increase in imports from the United States, as a result of a weaker dollar against the euro. While Lithuania once pegged its currency, the litas, to the dollar, it is now pegged to the euro.

Minister of Foreign Affairs Antanas Valionis argues that future Lithuania-U.S. relations, while maintaining a strong bilateral dimension, should be seen in the context of Lithuania’s membership in the EU. Lithuania understands the crucial importance of healthy and strong transatlantic links to global security. “Just as there is no strong Europe without a strong America, there is no strong America without a strong Europe.

John A. Rowell General Director of Ochoco Lumber

“Only by shared efforts can we build secure and healthy societies, vibrant economies and help the neighboring regions, in principle the countries in transition, to create societies based on democratic values.”

Ochoco Lumber, a U.S.-owned company in Kupiskis in northeast Lithuania, is a prime example of U.S.-Lithuanian cooperation. The firm exports thousands of square feet of timber annually to the United States. John A. Rowell, Ochoco’s General Director, says, "Our U.S. employees in the U.S. have been committed to helping the Lithuanians achieve success and are very proud of being part of our prosperity.

“I believe that one of the most important things that my experience here has given me is the insight into the management of a diverse cultural labor force. Our employees are our most valuable resource here at Ochoco.”