CNBC Business | European Capitals of Culture 2009: Baltic  bounce

European Capitals of Culture 2009: Baltic  bounce

Lithuania celebrates 1,000 years of nationhood this  year. Justin Keay visits Vilnius as it gets ready to party

Something new but with a vigorous nod to history is taking shape in Vilnius’s Cathedral Square: builders are working around the clock to complete rebuilding the Royal Palace, destroyed in 1801 by the Russians. On 6 July –  the coronation day of Lithuania’s King Mindaugas - it will  open to national fanfare as the centrepiece of the city’s turn as one of Europe’s two European Capitals of Culture, simultaneously marking exactly 1,000 years of nationhood.

“We see this as a practical, large-scale  national branding exercise, aimed at putting Vilnius on the map for visitors,” says the communications chief for the Capital of  Culture, Vilma Janulyte.  

The focus will be on participation, with wandering street musicians from across  Europe due to descend on the city in May. “We wish to stress cultural rediscovery, looking back at our past when Poles,  Germans, Jews and others were a major part of our national identity,” she says. 

“Vilnius is a small city by European standards – just 550,000 people – but we are looking forward to the opportunity to present our best face to the world,” says Akvile  Vasiliauskaite, marketing head at the Lithuanian department of tourism. She expects visitor numbers to this Unesco World  Heritage city to rise by some 15% over 2009, attracted by the 900-plus festivity events. The celebration will start at midnight on 31 December with what is promised to be a  dramatic light show in the Old Town. 

As Lithuania’s media has relentlessly been reminding its people for months, for more than 200 years (1569-1795) the country – as part of Rzeczpospolita, a union with Poland – was 20 times larger than it is now. That proud kingdom prospered until Lithuania was absorbed into the Russian Empire. Independence won in 1918 lasted only until 1940, when the nation was ripped apart once more by war and Soviet rule. Independent again since 1990, and an EU member state since 2004, Lithuania has pursued a firmly westward  orientation. 

The Royal Palace is the largest and most symbolic of the many reconstruction projects aimed at returning this compact baroque city to its former glory. This year will see the completion of 18 infrastructure projects in the old town – at a cost of €54.7m, eclipsing the €18.8m put aside for cultural and social projects – including the opening of the new National Gallery, restored parks and  renovated building facades. The best known sights – including the gothic cathedral, the historic Uzupis district and dramatic lakeside Trakai Castle – will all play a role in the celebrations. Expect many references also to Pikiliskes, a hill 26km outside Vilnius that Lithuanians insist is the geographic centre of Europe and thus key to their rediscovered European identity. 

Vilnius’s stress on cultural identity and its celebration of 1,000 years of nationhood made it an ideal candidate for being a  Capital of Culture. When the concept was born in 1985 by the late actress and Greek minister of culture Melina Mercouri with Athens the first selected city, sceptics dismissed it as euro-waffle, supported perhaps by Brussels stressing the primary intention was “to bring European peoples together.” 

However the concept has proved a successful way of helping less-known European destinations get onto the tourist map. It has also aided country branding, with the Lithuanian tourism authorities opting to launch the new national logo at the World Travel  market in London in November 2008. Some cities have made a major success of their hosting, notably Lisbon, which saw large parts of the city – in the 1980s one of the poorest in the EU – regenerated and modernised.  Indeed, the mantle has proved so popular that in 2000 no fewer than nine cities vied to share the honour, while one year after EU  enlargement in 2004 it was agreed that henceforth two cities – one from east and one from west Europe – would together bear the designation. 

Certainly the timing for Vilnius to shine on the European stage could not be better, or the EU funds the accolade unlocks more  welcome. Like other Baltic capitals, Tallinn and Riga, the city is recovering from a bad 2008, which saw the economy crash to earth after more five years of an unprecedented, explosive boom. 

Although Lithuania’s GDP growth is  expected to slow from the 8.8% achieved in 2007 – GDP in 2009 is predicted to grow by no more than 1.5% – Vilnius’s property market and the city economy generally have really felt the pain. Many argue that developers may rue some of their more  ambitious projects, which include central-east Europe’s largest shopping mall, the Akropolis, and the Europa Centre, a state of the art shopping and office development that includes the Baltic’s tallest tower block. 

And there has been more gloom. In  September, the central bank had to deny  rumours that a local bank was on the verge of bankruptcy. One month later, Lithuanians went to the polls and voted out their government for the 14th time since independence – hard-nosed even by regional standards. 

But they won’t let all this ruin the fun says Janulyte: “With 1,000 years of nationhood to commemorate and after all the difficulties many Vilnius people experienced in 2008, we really feel it’s time to party.”