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Lithuania looks east as EU president, irking Russia

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(VILNIUS) - Lithuania hopes to use its stint as European Union president to bolster the bloc's ties with former Soviet states, risking the wrath of Russia over what it sees as meddling in its backyard.

The small Baltic nation, the first to break free from the crumbling Soviet Union in 1990 before joining the EU in 2004, assumes the six-month rotating presidency of the bloc on July 1.

And it hopes to capitalise on its historic ties with eastern neighbours to clinch a landmark association and free trade accord with Ukraine and finalise talks on similar deals with Armenia, Georgia and Moldova.

One of the centrepieces of Lithuania's presidency is to be a summit in November between the EU and six states in its Eastern Partnership programme: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

But Soviet-era master Russia is vexed. Moscow has repeatedly urged Ukraine to join the 2010 Customs Union -- an EU-type common market in the ex-Soviet bloc -- that it currently shares with Belarus and Kazakhstan.

"We are somewhat concerned over calls by some politicians ordering target countries of the Eastern Partnership to pick one union or another," Russian ambassador to Lithuania Vladimir Chkhikvadze was quoted as saying by the Vilniaus Diena daily on Thursday.

Brussels has warned Kiev that its membership of that free trade zone would automatically block its deal with the EU.

In a recent interview in English with AFP, Lithuania's President Dalia Grybauskaite strongly urged Brussels to pursue "faster and deeper integration" of its eastern partners and avoid "double standards" on issues like easing visa regimes.

"Politically, it is important that Eastern Partnership countries cannot be put in worse conditions than Russia," she said.

Moscow reacted to the 2009 launch of the EU's Eastern Partnership as "a sign of geopolitical competition," said political analyst Vytis Jurkonis from Vilnius University.

When it comes to Ukraine, which is keen to sign its long-discussed EU deal in November, Brussels insists fundamental rights issues must be addressed, starting with the jailing of former premier Yulia Tymoshenko.

The "Tymoshenko case became a symbol and they need to understand it. They need to do something with this case," Grybauskaite told AFP, stressing that Europe "will not dictate exactly" which steps Kiev should take to win the deal.

Another major challenge facing Lithuania when it takes the helm is to thrash out the details of the EU's 2014-2020 trillion-euro budget after a political deal was sealed at a Thursday summit in Brussels.

But Grybauskaite, often dubbed the Iron Lady for her Margaret Thatcher-like fiscal discipline, is well placed to deal with the wrangling. As EU budget commissioner, she hammered out the bloc's complicated 2007-2013 budget.

"It is about 70 legal acts which we need to negotiate with the European Parliament," Grybauskaite said.

Lithuania saw its economy boom after EU entry but was hit hard by the global crisis, with output contracting 14.8 percent in 2009.

Biting austerity measures far exceeding any applied in Western Europe were instrumental in turning the economy around and growth is forecast at three percent this year. Vilnius plans to adopt the euro in 2015.

Lithuania will hand over the EU presidency to crisis-mired Greece on January 1.

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