Analysts not expecting any radical economic policy change from Lithuania’s president-elect Grybauskaite

As the BNS reported Lithuania’s president-elect Dalia Grybauskaite should not make any drastic changes to existing economic and financial policy although may take measures to improve business environment for small and mid-scale business and economic ties with the Eastern countries, analysts believe.

“The end of elections after the first round is a positive thing since the elections campaign is an obstacle to making resolute decisions. I hope that Grybauskaite intensifies the elimination of obstacles for business and makes no delays in initiating draft legislation, which, for example, would facilitate the establishment of small companies, which would contribute to the lowering of unemployment level,” Rimantas Rudzkis, chief analyst with DnB Nord bank, told BNS.

The policy of incumbent government, based on saving and stringent cost control, should not change essentially after presidential elections, Violeta Klyviene, senior analyst for the Baltic countries at Danske Bank, believes.

“I do not expect any overturns – financial stability is the main objective, and I think that Grybauskaite understands that perfectly and supports that,” Klyviene told BNS.

Economic analyst of the Lithuania’s Central Bank Mr Raimondas Kuodis believes that having a president with economic education will benefit Lithuania since many issues being tackled in any country are of socio-economic nature.

“State leader with experience of economic management is an advantage in crisis periods. We may also expect President Grybauskaite to be active in putting forward reforms, and not just in vetoing laws thus remedying the mistakes of the Seimas,” Kuodis told BNS.

Rudzkis hopes Grybauskaite will respond actively to changes amid downturn. First decisions targeting business and population might be taken in about a month after inauguration, although they would not produce any fast effects, he predicts.

“Legislation eliminating obstacles for small business shall be initiated as soon as possible. I hope that the election of Grybauskaite will lead to the improvement of ties with the East, which could facilitate the expansion of Lithuania’s business eastward, since I believe that Eastern markets will recover faster than Western ones,” Rudzkis said.

Nerijus Udrenas, chief analyst at SEB Bank and the former President Adamkus advisor, was cautious in assessing the possibilities of Grybauskaite to improve economic relations with Eastern countries since, in his opinion based on statements of president-elect, “her strength is the West”.

“Foreign markets will respond positively to the fact that Grybauskaite is well known in Europe, that there is an agreement between her and the ruling coalition, hence economic policy of the country will be predictable and current reforms will continue,” Udrenas said to the BNS.

Klyviene would not forecast how the incumbent government could change after presidential elections. She pointed out, however, that the decisions taken amid economic downturn could not be popular.

“I doubt whether any other finance minister could be any more popular than Algirdas Semeta under current circumstances. Those reforms are not popular, yet they have no alternatives, and I think that Grybauskaite understands that,” Klyviene said.

In Rudzkis’ opinion, much would depend on future team of Grybauskaite. He would not make any forecasts as to the potential reshuffle of the government, either.

“First of all, I expect Grybauskaite to pursue decisive staffing policy… The question is, however, whether it would be possible to find stronger people, since there have always been problems with staff in Lithuania,” Rudzkis said.

In Udrenas’ opinion, Grybauskaite, as ex-finance minister, might pursue stronger influence at the Finance Ministry, which, under such circumstances, might avoid taking any decisions without President’s prior approval.

Source BNS