What a year when looking back! More than year ago, we said goodbye to the strict lockdown but still following the rules and restrictions obediently until April this year. Life without a mask felt almost like being naked. In the midst of the pandemic, we experienced different kinds of crises like Ryanair incident in Belarus after which Lithuania suffered from forced illegal migration from Belarus, or challenges with China that still continue. But for decades to come we will remember the winter morning of 24th of February when Russia launched a brutal war against Ukraine violating international law and numerous agreements to which Russia has committed, shaking the stability and security in the region and the whole of Europe.

Lithuania has received so far about 56 000 Ukrainian refugees, but some of them have already started to return back home although it is far from safe. Lithuanians were very quick to help them by collecting material assistance, donating money through non-governmental organizations or offering accommodation. According to the polls over 50% of Lithuanians have provided some kind of help to Ukrainians. Donations for animals were not forgotten either. Employment services started working in a few days, and it seems that many Ukrainians have got a job, which is important to get the daily routines in order. On the other hand, the government started to provide medical supplies, bulletproof vests, weapons etc. to Ukraine to help in very dire circumstances. Already mid-March ministers and parliamentarians started to travel to Kyiv to give political support.

Due to the war in the neighborhood, national security is on top of the agenda also in Lithuania, with energy being an essential part of it. At the beginning of May an important project for the whole region, the Gas Interconnection Poland-Lithuania (GIPL) started working connecting Lithuania, other Baltic States and Finland to the EU common market. It bolsters energy security – Lithuania and other Baltic countries belong still to the eastern Brell electricity system, but are bound to synchronize with the continental European system by the end of 2025. Lithuanians would be eager to accelerate some processes to be able to desynchronize faster. Although the war will have negative influence on Lithuania´s economy just like everywhere else as exports are declining, investment climate is uncertain and there are shortages of certain products and raw materials, the first quarter of 2022 seems to be positive for Lithuanian-origin goods as exports grew by 30%. The government has tried to diversify the export market, especially to the USA. Main export partners remain Latvia, Poland and Germany. To help business to find new destinations for their products and to attract investments, the government will have a number of commercial attachés in Asia and in Europe. In Finland, we already have one in the Lithuanian Embassy to help you to find contacts and guide you forward.

Because of the war and disruptions in the supply chain, GDP growth forecasts have been cut to around 1.7 %, and at the same time, inflation has reached about 15 % for a few months. Lithuania has been suffering from shortage of work force. Vacancies are plenty but demand and offer don´t meet. Already for years, salaries have been rising around 10% yearly.

According to Invest in Lithuania as of Q3 Finland´s FDI, stock was 719 meuros and value of Lithuania FDI stock in Finland 13.4 meuros. Finland is the seventh biggest investor in Lithuania by share of total projects (2010-2020). Vilnius accounts for the majority of Finnish projects.

About a year ago I wrote in this newsletter that “I am sincerely looking forward to diving into the cultural scene of Lithuania, seeing the unique Unesco-listed places and a glimpse of the beautiful Lithuanian seashore.” Yes, I managed to participate to some cultural events, but the pandemic affected a lot, and many interesting cultural experiences were postponed. Now the summer season seems to be quite promising with events like Vilnius Festival 2022 and 6th Dubingiai Music Festival, St. Christopher Festival, Vilnius Mama Jazz Festival or Klaipėda Festival.

Beach in Curonian Spit / Juodkrantė stone art / LNG ship Independence in Klaipeda

Have you already visited Kaunas – European capital of culture 2022? The slogan for the year has been “From Temporary to Contemporary”. If not, I definitely recommend you to spend some days in Kaunas – there is a direct flight from Helsinki to Kaunas – and enjoy its very ambitious program with numerous exhibitions, concerts and shows and its cultural heritage and modernist architecture. Kaunas having been temporary capital between 1920 and 1939 treasures plenty of very interesting and beautiful buildings some of which have already been renovated and some still wait for their turn to enrich the city´s architectural soul.

Have a look at the recently renovated building where Finnish consulate between 1936-1940 was situated in Kęstučio g. 8. Or walk to V. Putvinskio g. 64 where Finnish-Swedish writer Henry Parland worked in 1930 in the Swedish consulate. Along Putvinskio Street, you will find many Embassy buildings from the inter-war period.

Finnish Honorary Consulate in Juodkrantė

Business or pleasure – Lithuania is worth a visit – my strong recommendation! I recently visited Klaipeda to hear how the port city is doing and familiarized myself with very topical LNG questions at Klaipėdos Nafta. I also had a chance to visit the Unesco heritage site Curonian Spit, only a few minutes away by ferry from Klaipėda. Beautiful architecture, colorful old buildings, interesting sights – don´t miss! Have a nice summer!

H.E Ms Arja Makkonen
Ambassador of Finland to Lithuania