Royal Palace of the Grand Duchy of Lithuania

Few countries have suffered as much from the global financial meltdown as Lithuania, which has seen its gross domestic product shrivel by 19 percent this year. As the jobless rate soars and the government struggles to pay its bills, one of the biggest casualties has been the Royal Palace.

Hampered by an empty treasury and huge cost overruns, construction has come almost to a standstill on the palace: a white-walled replica of the colossal 15th-century castle complex that once dominated Vilnius’s baroque Old Town and represented the seat of an empire that reached from the Baltic Sea to the Black Sea.

The original palace was razed in 1802 by Russia, which demolished it so thoroughly that it even sold off the rubble. Lithuanian nationalists, who have dreamed about resurrecting the castle for generations, finally got their chance after the country of 3.5 million people declared independence from the Soviet Union in 1990.

With the palace about half-built after seven years of labor, Lithuania can’t afford to scrap the project, but it can’t afford to finish it, either. The total price tag has tripled from original estimates, and government officials say they can’t foresee when they will be able to come up with the $70 million necessary to complete the job. “I’m afraid there is truly no chance in the near future for us to finish even such a revered building as this,” Finance Minister Ingrida Simonyte told reporters last month.

Officials said they would slash by one-third the already meager construction budget for the palace next year.

Along with its Baltic neighbors — Latvia and Estonia — Lithuania experienced an economic boom after it joined the European Union in 2004, with plenty of easy credit as foreign investors poured money into the region. The credit bubble popped last year, however, resulting in an enormous reverse flow of capital that has forced the government to implement draconian spending cuts.

The palace complex was supposed to have been done in time for the country’s millennium celebration in July — the 1,000th anniversary of the first recorded mention of Lithuania. (In 1009, a nun in the German city of Quedlinburg wrote that a local missionary, Saint Bruno, had been killed at the hands of pagans in “Lituae,” or Lithuania.)

The palace did briefly open its gates for the Millennium Day ceremony, which was attended by several modern-day royals and heads of state from neighboring countries. Although the public was allowed a peek inside for a few days, the site has remained off-limits since then.

The new palace is intended to remind Lithuanians that their small country — today about the size of West Virginia — was once a great empire, ruling over much of present-day Belarus, Ukraine and Poland.

Supporters of the palace acknowledge that popular backing has waned since the economy crashed last year. But Kazys Almenas, founder of an advocacy group called the Palace Support Fund, said the cost of finishing the project would still barely make a dent in Lithuania’s national budget.

“There are those who like to grandstand — ‘Oh, you’re taking away money from the orphans,’ ” he said. “But eventually there is no question that it will be built. The question is just when.”

Almenas, a retired nuclear engineering professor from the University of Maryland at College Park, was displaced from Lithuania as a child during World War II and immigrated to the United States. He returned to Vilnius in 1999 and has lobbied on behalf of the palace ever since.

He conceded that many Lithuanians still don’t see the need to rebuild a palace that vanished more than 200 years ago. But he argued that the return of the royal quarters was the only way to fill a long-standing void in the city center.

“When the castle was razed, you walked down Castle Street and what was there? Just a bunch of trees. Something was definitely wrong,” he said. “What kind of Castle Street is it if you don’t have a castle at the end?”

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