Lithuania considers competition, EU chances

  • 1998-11-05
  • Paul Beckman
VILNIUS - An overwhelming majority of Lithuania's elected officials have set their sites on full European Union membership. But the intense process of harmonizing laws and regulations with EU standards has proven no easy task.

In the spirit of such transitions, a Europeanized draft law on competition is currently floating around the halls of Parliament and is expected to become the successor to the current law.

A group discussion was held Oct. 30 in which participants were encouraged to openly discuss and present their views on Lithuania's integration with the EU, the competition law and the idea of competition itself. The meeting, sponsored by the Lithuanian Free Market Institute (LLRI) and the Friedrich Naumann Foundation, involved Lithuanian economic experts, government officials and foreign guests.

On Nov. 4, the European Commission (EC) will offer a report on whether Lithuania should be put on the fast track of the EU enlargement process or not. Although the date lingered in the back of many Lithuanians' minds, Mark Gray of the EC was unwilling to provide any insight. Instead, he drew attention to the EU's point of view on the enlargement process and policies.

While Gray spoke reassuringly about the EU's commitment to bring Lithuania into the fold, he described the idea of nailing down an exact date as to when it may occur as "unrealistic." Gray emphasized that because of the number of countries seeking membership and internal trends in the EU itself, the current enlargement process is quite different from those of the past.

One idea that continually popped up in Gray's speech, regardless of whether he was speaking of internal or external matters, was the need for backing up words with actions. He described an internal trend of the EU as putting a greater emphasis on enforcing existing laws rather than introducing new ones.

"The implementation of agreements is just as important as the negotiations," Gray later said of those countries grappling to enter the EU as soon as possible.

Klaudijus Maniokas, director of the Integration Strategy Department, bypassed the standard analogies and pep talks by bluntly announcing that Lithuania should "not develop optimism" about jumping up to the first group of countries set for negotiations.

"I don't know how long negotiations will be postponed," said Maniokas. "But I hope the EU will continue helping Lithuania become more prepared."

While all the discussions surrounding the imaginary idea of timetables were expected, Elena Leontjeva, president of the LLRI, was able to shed some light on how the integration process is affecting the business environment. Leontjeva pronounced the process as a mixed bag of advantages and disadvantages.

The LLRI president noted that EU officials are, without much difficulty, able to convince the Lithuanian government to act. The fact that foreigners can now buy land in Lithuania is an example she gave as an EU influenced decision. The amount of changes in the laws, however, is currently creating a market with little wiggle room.

"The influence of the EU [on Lithuania] is large," said Leontjeva. "Currently, the process of harmonizing all legal acts presents a difficult situation. We still have regulations from the past, but also EU regulations as well. This creates a restrictive market. Creative business people have to spend too much time meeting all the bureaucratic requirements. It is important that harmonization does not become an obstacle for competition."

Criticism of the competition law

Arnoldas Klimas, head of the competition policy department, described the draft law on competition as "playing a huge role in the market economy" and being "in the interest of Lithuania's whole economic system."

Although the object of the law is to ensure a fair and competitive atmosphere, Leontjeva said that it is important not to "overdo things" by altering some EU suggestions into obligatory measures.

Remigijus Simasius, an expert at the LLRI, said he is concerned that the draft law on competition contains such noncompulsory and unnecessary features which could result in an unfavorable situation for enterprises.

Will the draft law, once it becomes a law, be able to maintain a balance of private and public interests? asked Sarunas Keserauskas, a lawyer with a Lithuanian consultancy firm. "The draft law isn't bad. One might even say it is good. But it is unclear how it will be implemented. Some provisions in the law allow us to expect that a balance between private and public interests will lean to the disadvantage of the private entities."

One example which Simasius gives involves the prohibition of enterprises to reject a contract with another enterprise in the selling or buying of products. The article, according to Simasius, would artificially sustain the activities of weaker businesses which would otherwise not survive in a truly competitive atmosphere.

"Only practice will show what will happen," Keserauskas concluded.