Lithuania’s PM to urge Scandinavian banks to lend more actively to Lithuanians
The marginal politician Ozolas on a radio interview claimed that at the end of December the Swedish banks have transferred some 2 bln Litas (1 EURO – 3,45LTL) back to Sweden. There are other rumours about the Swedish capital’s return to Sweden also. However, the Chairman of the Central Bank of Lithuania Mr Sarkinas is trying to do his best to calm down the situation. The Government is also doing its share.
As the BNS reports the Lithuanian Prime Minister Andrius Kubilius said on Feb 10 that he would call on Scandinavian banks, which control 85 percent of Lithuanian commercial banks’ capital, to be more active in providing loans to the country’s businesses and private individuals.
“I will call on those Scandinavian banks to be more active in lending money to Lithuanian businesses and people. Now we can see certain crediting restrictions, which are perhaps too strict. Even a well performing business with export markets and well-developed production capacities experiences big problems in borrowing money from banks to finance its operations,” Kubilius said in an interview with Lithuanian Radio.
The BNS reported also that the prime minister said that the government was also planning economic stimulus measures. “This plan is highly ambitious: to raise up to 4 billion litas (EUR 1.16 b) in additional money and allocate around half of that money for business crediting. Borrowing possibilities both for the state and to businesses were much better if the Lithuanian state finance system had clear stability prospects,” he said.
Kubilius next week is leaving for Sweden to meet with the heads of the Swedish government and financial institutions. He plans to invite Scandinavian banks to contribute to a stabilization fund that is being set up in Lithuania.
At the same time the daily Lietuvos Rytas informed on Feb 9 that Lithuania’s government, which would not disclose its borrowing terms to the public, borrowed from foreign banks in euros at the interest of almost 10 percent in December and January.
The same paper stated that late in December, the government raised 75 million euros via the offering of 13-year government securities, which were all acquired by France’s Natixis. The bonds were sold 10 percent below their face value at the floating rate of almost 10 percent.
A couple of weeks ago the government raised 142 million euros through the placement of another issue of government securities at the interest of 9.95 percent, i.e. about 1 point more compared with the current interest on Lithuania’s Eurobonds maturing in 2016.
According to the same paper the Credit Suisse International acquired that issue. The bonds will be redeemed starting from the end of 2011 till December 2015.