Europe to help finance Lithuanian LNG

European finance ministers ready to welcome Latvia into euro, despite economic problems

“This investment is critical for Lithuania to diversify and secure its energy supply as well as provide backup in the event of gas supply failures,” the EIB said in a statement. Lithuania and other Eastern European countries are trying to add more diversity to an energy sector dominated by Russia. EIB Vice President Pim van Ballekom said the project would help ensure a sustained supply of natural gas for energy and increase competition in the country’s energy sector. The LNG facility will include about 10 miles of pipeline that will connect the terminal to the Lithuanian natural gas grid. “The LNG terminal in Klaipeda is a critical component of Lithuania’s energy strategy as it is the alternative solution for gas diversification in the short term,” Lithuanian Minister of Energy Jaroslav Neverovic said.

The Baltic state has won approval to become the 18th European Union country to use the euro from the EU’s executive Commission. Finance ministers are expected to give their assent in Brussels on Tuesday. Finance ministers brushed aside the idea that it might be difficult to enlarge the eurozone while the region struggles to support cash-strapped members, like Greece and Portugal. Irish Finance Minister Michael Noonan called Latvia’s adoption of the euro along with Croatia’s recent joining of the EU “absolutely amazing when you pull back from the day-to-day workings of the crisis.” Latvia will start using the euro at the start of 2014.

Progress on Housing Finance Reform

Actions taken during the crisis turned the previously implicit government guarantee into an explicit one, at a cost to taxpayers that peaked at $189 billion at the end of 2012. American families at least got something from the bailout of Fannie and Freddie, as mortgages were available throughout the crisis even as other parts of credit markets experienced strains. The firms have paid some $132 billion in dividends to the government, but these funds do not get credited as paying down the taxpayer assistance. Moreover, the firms are not allowed to build up reserves with which to cover any potential future losses. Instead, the firms profits are swept to the Treasury, where they provide a temptation to Congress and the president as a means by which to pay for new government spending.

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