LITHUANIA: Enlargement of the European Union
Ambassador Vygaudas Ušackas
May 1 of 2004 entered into European history as a truly historical moment.
By joining the European Union (EU) Lithuania finally and irreversibly regained its place in the Western community of nations whose values of democracy, liberty and the rule of law we have always shared.
The Soviet occupation of Lithuania from 1940 to 1990 had stolen the chance for my country to be among the founders of the European Union in 1950`s. However delayed, today is our rendezvous with history.
Our accession to the EU gives a new powerful impulse to the creation of a free, secure and prosperous Lithuania due to the following factors:
First, the fifth and the largest EU enlargement to ten countries brings the total number of EU members to 25, augments the EU`s population to over 455 million and makes it the largest common market in the world. For a small and dynamic country like Lithuania being part of it is a big advantage.
Secondly, for Lithuania, EU membership compliments our membership in NATO and thus promotes security, stability and predictability.
Thirdly, EU membership provides single set of rules; a single set of administrative and customs procedures, and improves public administration.
Forth, adoption of euro, that we plan to do in 2007, will have a positive impact on continued growth of trade and GDP. It will eliminate exchange risk, lower transaction costs and will lead to greater competition and transparency of prices. Removing the long-term exchange risk should improve the stature of CECs as competitive manufacturing platforms and thereby promote foreign direct investment.
Fifth, the EU membership also provides the strongest expression of European solidarity. Financial assistance from the EU budget enables us to continue necessary structural reforms of agriculture and energy sectors, in particular.
For example: in the year 2004-2006 the assistance of EU to Lithuania will reach 772 euros per capita.
It is also important to recognize that the EU enlargement negotiations process as such and gradual adoption of key freedoms of movement of goods, capital, services and people have already made a tremendous positive impact on Lithuania`s economy. Numbers speak best:
- Before the EU enlargement negotiations, in 1996 Lithuania`s inflation rate was 13%; today we have a deflation of -1,2 %;
- GDP growth before the EU enlargement negotiations in 1995-1996 was 3-5%, last year- 9%;
- The share of Lithuanian exports to EU from 1996 to this year increased from 30% to 60,7 % of total exports and respectively growth of imports from EU countries was from 42 to 65,7%
However, it would be wrong to consider the EU enlargement as only beneficiary to the newcomers. I am confident, that Lithuania and other 9 new EU members will inject a new dynamism of economic and political evolution of EU:
- The economies of new member states are growing at twice or even higher rate than those of current members;
- New member countries provide lower operation costs, less-expensive and well-educated labor force. For example, Central Europe has both lower wage rates and lower corporate taxes than existing EU members. Hence, it will inevitably encourage greater competition;
- With respect to US business, US exporters will enjoy lower tariffs in their trade with the new Member states, which will decrease from an average of 9% to an average of 4%. For example, the tariffs on US exports to Lithuania will fall by an average of 15%.
- The membership of new countries will also enrich EU policies vis-ŕ-vis new neighbors (such as Ukraine, Georgia, Russia and Belarus), by sharing the lessons learned and experience gained of economic and political transformation as well as projecting stability beyond the EU borders.
- Last, but not least the experience of a long journey of Lithuania to freedom, independence and return to the community of shared values is but one example of the importance of Europe`s relationship with the United States. The enlargement of the European Union to countries with special appreciation towards United States, will greatly contribute to preserve and strengthen the transatlantic partnership, which is central to security and prosperity of Europeans and Americans.
I truly believe that the enlargement of the European Union is good news for Lithuania and its people, good new for Europe, for new EU-members, good news for the United States of America and good news beyond the transatlantic rim.
Excerpt of remarks by Ambassador Vygaudas Ušackas at the National Press Club, May 6, 2004. Courtesy of the Embassy of Lithuania.