Merkel due in Lithuania for talks on energy and trade

Sep 6, 2010, 11:35 GMT

Vilnius - The Baltic states of Lithuania and Latvia prepared to play host Monday to German Chancellor Angela Merkel.

The ex-Soviet Baltic states are still suspicious of Russia, whilst under Merkel Germany has distanced itself somewhat from the close relationship with Moscow propounded by ex-chancellor Gerhard Schroeder.

Merkel's first stop is in the Lithuanian capital, Vilnius, where she is holding talks with President Dalia Grybauskaite.

Speaking ahead of the meeting, Grybauskaite said 'We will discuss the possibility to increase EU financial assistance for the development of the Baltic Sea region.'

Trade and energy are expected to be high on the agendas of all Merkel's meetings during her two-day Baltic tour.

At the weekend Merkel said that despite their relatively small size, the Baltic states were 'important partners' who could help formulate the EU's Eastern Partnership programme designed to promote cooperation with states bordering the EU.

Later on Monday Merkel will meet Lithuanian Prime Minister Andrius Kubilius before flying to Latvia in the evening ahead of meetings with the Latvian president and prime minister on Tuesday.

Merkel will also meet representatives of German businesses operating in the Baltic states which have played an important role in helping to stabilize recession-hit economies.

While investors from some countries fled the region when a lengthy boom turned into a massive bust in 2008, many German firms have won admiration locally for staying put.

Last year the Lithuanian economy shrank by 15 per cent while Latvia underwent the European Union's biggest recession as its economy shrank 18 per cent.