Surrounded
by forest, a white granite pillar topped by a ring of golden stars near the
village
of
Purnuskes
marks "the geographical center
of
Europe
." Things are looking bleak.
The Baltic state of
Lithuania
-- sandwiched between
Latvia
and the Russian exclave Kalingrad -- faces an economic contraction of
18 percent for 2009.
To that the government has said it will
add a 30 percent increase in household power prices in 2010, as it fulfils a
condition of European Union membership and shuts Ignalina, the Chernobyl-style
nuclear power plant that provides 70 percent of
Lithuania
's
power.
EU officials in
Brussels
pressed for the closure at the start of the century, when the bloc was
embarking on its eastern enlargement. Their goal was to lower the risk of a
repeat of the
Chernobyl
nuclear explosion of 1986.
Neither recession nor energy security
were factors when the sculpture was symbolically unveiled on May 1, 2004 as Lithuania,
once occupied by the Soviet Union, joined the EU. It is described by the
country's tourism website as marking "the poignant return of
Lithuania
to the family of European nations."
But from December 31 -- when temperatures
can drop to minus 30 degrees Celsius (minus 22 Fahrenheit) and rivers freeze --
the closure will make
Lithuania
more dependent on an increasingly irregular supply of power from its
former occupier.
"It's the worst crisis ever,"
said Jan Glushachenkov, a 44-year old former excavator driver who lives next to
the sculpture above a compass mosaic.
Speaking to Reuters in the still hush
around the column near the village 26 km (16 miles) northeast of
Vilnius
,
Glushachenkov said he has already been out of work for almost a year.
He pointed out the more pressing risks
Brussels
now faces in closing the reactor with the country's 3.5 million people locked
in recession: "People will have to emigrate or to go to steal."
Population losses due to net emigration
since 1990 already amounted to about 10 percent, according to a 2008 report
from the OECD.
EDGY RELATIONS
For those who stay, things will be
tough. Glushachenkov's neighbor Ludwik Trypucki, an 86-year-old farmer, said
the shutdown will lift his monthly power bill to about 18 percent of his 800
Lithuanian litas ($333.5) pension. He already pays 120 litas per month.
"I understand they had to close it
if it was unsafe to operate, but they had to agree in advance to get cheaper
electricity. Now it's unclear where that will come from," he said.
Lithuania
plans to import electricity from
Estonia
,
Russia
and
Ukraine
, via neighboring
Belarus
.
A small amount will be imported via cable from
Finland
and
Latvia
.
The increasing energy dependence on
Russia
,
which will also supply gas for a fossil fuel-powered electricity plant, comes
as relations between the countries remain edgy.
Lithuania
objected to
Russia
building a gas pipeline to
Germany
under the
Baltic Sea
and attempted to block the start of EU-Russia talks on a strategic
partnership.
Some in the Baltic region fear a planned
pipeline under the
Baltic Sea
from
Russia
to
Germany
, Nord Stream, could offer
Moscow
a direct energy lever with
Europe
, enabling it to cut off countries' gas to wield diplomatic pressure.
Russia
has in the past been a reliable gas supplier to
Lithuania
,
although it has cut oil supplies to a Lithuanian refiner, Mazeikiu Nafta, now
owned by Polish oil group PKN Orlen.
INFLATION
Prime Minister Andrius Kubilius is
hopeful countries in the region will be happy to sell
Lithuania
electricity surpluses the downturn has created in their countries, and pointed
to long-term power contracts
Lithuania
has signed.
"
Lithuania
will become more dependent on imports of energy resources after Ignalina's
closure. That will reduce our energy security, but we feel assured about the
next year," he told Reuters.
The EU has allocated so far about 820
million euros ($1.17 billion) in aid to decommission the plant, deal with the
nuclear waste and upgrade a fossil fuel plant, but the central bank points to
the shutdown's broader impact.
"A 30 percent hike in electricity
prices will slash gross domestic product by one percentage point and will
increase inflation by almost one percentage point," said Raimondas Kuodis,
the central bank's chief economist.
"It does not look a lot in the
context of the global crisis, but for
Lithuania
's
economy it's a painful hit."
Besides jobs lost at the reactor in the
town of
Visaginas
in
Lithuania
's easternmost corner, businesses straining to maintain working capital
will be squeezed.
Arturas Zaremba, head of major cement
producer Akmenes Cementas, said his power prices would more than double to 15
Lithuanian cents per kilowatt-hour from 6, raising costs for the company with
revenues of 125 million litas by 6-7 million litas.
"The electricity price increase
will be a serious shock not only for our company, but for the whole
economy," he said.
In Visaginas, unemployment at about 9
percent -- less than the national average of 11.7 percent -- is forecast to
reach about 11.5 percent in 2010.
"I have been working at the plant
for 27 years, my whole life was connected to it," said Andrei Grigoriev,
walking past a memorial stone from 1975 marking where the town was begun.
"Of course, it is painful to see it
being shut, and that it was a politically motivated decision," he said.
Lithuania
's opposition made a last unsuccessful attempt in December to force the
government to restart negotiations with
Brussels
with a view to extending Ignalina's lifespan, a project supported by former
Prime Minister Gediminas Kirkilas.
"The European Commission does not
fully apprehend the situation of the
Baltic
states
, and think that electricity imports
from
Russia
is not a problem," he said. "They don't share the same
historical experience."
BETTER
OPPORTUNITY
IN
AFRICA
In an office hooked up by closed-circuit
TV to a direct view of the gleaming, cavernous interior of the reactor hall,
Viktor Shevaldin, Ignalina's veteran head, says he is resigned to the closure
of the plant's remaining reactor at
11 p.m.
on New Year's Eve.
Full decommissioning at an estimated cost
of 8.6 billion litas will take about 25 years.
"We face a different future, but we
have come to terms with it already," said the grey haired 60-year-old.
But let him talk more, and his tone
changes. The chance of a major accident is one per one million years of reactor
work, he said: "It's like being hit by a meteorite while walking on the
street."
Back at Purnuskes, Algirdas Kauspedas, an
architect who became a celebrity rock musician with a band he formed in the
last days of the
Soviet Union
, is pragmatic.
"Market perspectives are bleak here.
It's better to look for possibilities in
Africa
," he said.