As conservative prime minister from May to October 1999, Rolandas Paksas won popularity and respect throughout Lithuania for refusing to sign a secretive oil deal with Williams. The deal was only concluded after he resigned together with his economy and finance ministers.
He then forged an alliance with the marginal Liberal Union, and that party's profile transformed overnight. It did well in parliamentary elections in October 2000. But a coalition with the New Union (Social Liberals), optimistically named New Policy, which Paksas headed, broke down in June 2001.
The Liberal Union blamed Paksas in part for New Policy's failure and he was dismissed from the party leadership.
The founding congress for his latest political venture, the Liberal Democratic Party, took place earlier this month, but - so far - Paksas has been coy about his ambitions for presidential elections due in December.
You've said you were forced out of the Liberal Union, and that it was a painful experience. Why?
When I joined the Liberal Union there were only 800 members. During my leadership, it increased to 2,000. The number of branches rose from 36 to 81.
After that, the old members of the party wanted to regain their power and push me out.
Good results are achieved only when you work hard. It's like leaving a house you built yourself. It's a shame the Liberal Union, instead of showing strong leadership, started destruction within the party.
New Policy looked like the ideal liberal government for Lithuania, one that would help the country out of its deep recession and keep the left-wing Social Democrats out of power. Why did it collapse so quickly?
There are several reasons. First, it was artificially made. The Liberal Union and the Social Liberals could not survive together ideologically. Second, this was the only time a coalition has been formed in Lithuania, and we lacked know-how. Third, we had a tiny margin in the Parliament and had to make a wide coalition with a lot of small parties. And we faced the strong opposition of the Social Democrats.
Fourth, we had to bring in painful reforms, which were not accepted well by the media or the public. And fifth, I really didn't want to take part in the presidential elections, only to dedicate myself to being prime minister. But my party didn't understand this.
Why choose the name Liberal Democratic Party?
The only way to raise the Lithuanian economy is by liberalization. Lithuania has problems because we don't pay enough attention to the law. Democracy has to be strict. It doesn't matter who is breaking the speed limit on the highway - that person has to answer for it.
Will it be different to every other party in Lithuania, or just another party based around a single personality? Is it there simply to back your bid for the presidency?
You don't have to have a party to participate in presidential elections. All parties in Lithuania are one-person parties, led by Paulauskas, Vytautas Landsbergis, Algirdas Brazauskas, Eugenijus Gentvilas. But I want to make mine a true party for the people.
So you are running for president, then?
(Pause.) This is my aim.
Why did you fail to create a liberal business environment during your two spells as prime minister?
In the Conservative government, I had to work with their program. As Liberal prime minister, we had a very clear program and we performed well. If only we had stayed in power another two years - privatization was going well, EU negotiations were going well. Good results are revealed only after a year. Now, the Brazauskas government is simply continuing with what we started - tax reform, pensions reform.
You're one of the biggest critics of the EU's decision to make closure of Ignalina a condition for membership. Ignalina has RBMK reactors, like Chernobyl, which lack a protective safety shield, and Lithuania's energy needs would be satisfied even without Ignalina. Why keep it open?
The EU is giving us orders. Ignalina is safe enough. $200 million was invested in the safety of Ignalina. If someone wants to close it, that someone has to finance it. If Ignalina closes, we'll have to pay fines for pollution from using other energy sources.
Lithuanian needs 10.4 billion litas ($2.6 billion) to close the first reactor. The EU is giving 720 million litas. Where do we find the remaining 9 billion litas, almost the size of the country's entire national budget?
Is there any way Lithuania could join the EU and keep Ignalina open?
One EU official told me, "You won't be able to start negotiations without a sentence in your energy program giving dates when the reactors should be closed." But we started negotiations without doing this. We can still persuade the EU that Ignalina can stay open.
Does Lithuania want to rely on Russia for gas and crude? The only alternative is nuclear cartridges that we ca buy not only from Russia.
If Lithuania will not be able to join the EU because it refuses to close Ignalina, the power plant will still be there, won't it.
Why did you think the Williams deal was bad enough for Lithuania to resign over?
In 1999, Lithuanian politicians believed what Williams told them - but didn't include in the deal - that over the coming 18 months the Mazeikiu Nafta oil complex Williams invested in would be modernized, $400-500 million would be invested in it, the supply of oil would be stabilized, 8 million tons of oil products would be exported per year, and a pipeline would be built to the coast where a line of ships would be waiting to take it.
Only three of us - myself and my economy and finance ministers - didn't believe this tale. Now, 80 percent of Lithuanians don't believe it.
Mazeikiu Nafta has huge losses. In 1997, under Lithuanian management, it had a profit of 70 million litas.
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