Lithuania suffers 'Russian energy bug'

  • 2006-05-24
  • From wire reports
VILNIUS - A top Lithuanian official has said that the country's energy dependence on Russia could be one of the main reasons why it has failed to accede to the eurozone. Worse, inflation could speed up given Gazprom's intentions to boost the price of natural gas, the official warned.

"We are well aware of the outlook for the prices of gas and crude, gas in particular. If the gas prices as set out in the draft are eventually approved, this may boost our inflation index by approximately 0.8 percentage points, which could be one of the key reasons for the European Commission to state that our country fails to meet the sustainability criterion," Finance Minister Zigmantas Balcytis said in an interview to the news radio station Ziniu Radijas on May 17.

The dependence from Russia was the key challenge for the national energy system, he noted. "A state cannot be dependent on a sole source of energy - these matters will have to be solved," the minister said. Other European Union members also recognized the problem of energy dependence on a single country, he added.
Balcytis reiterated that the government had taken all efforts to make fair preparations for the adoption of euro and avoided any artificial measures.

The European Commission announced last week that Lithuania was not ready to adopt the euro due to high inflation, which exceeded the reference rate. The commission projected a gradual rise in the country in coming months.