Lithuania might cut its state budget further, and Grybauskaite is already giving orders to Lithuanian authorities

June 2, 2009 at 8:38 pm Leave a comment

On June 2 the Lithuanian Prime Minister Andrius Kubilius said that the government might have to take further steps in order to reduce the state budget deficit amid the country’s worsening economic forecasts.

“We cannot say that the economic decline has stopped already. The Bank of Lithuania’s forecasts show that the economy may contract by up to 15%, which means that revenues will decline more than we projected and that the deficit can be higher than 5% — it can reach nearly 7%,” Kubilius told the Public Radio.

He said the government could have to take additional measures to keep the deficit within its 5% target.

The BNS written that in its latest forecasts published in May, the central Bank of Lithuania predicted that the economy would slump by 15.6% this year. The Finance Ministry forecast in late March a 10.5% GDP contraction for this year.

Lithuania’s president-elect Dalia Grybauskaite has said recently that budget spending should not be cut if the deficit is kept within 5%.

Grybauskaite, who arrived to Lithuania from Brussels via Riga as an economy-class passenger and pledged to fly economy class at least in Europe even after the inauguration, gave some tasks to the Lithuanian Parliament and the Lithuanian Government until the Spring session will end on 30 June.

“I hope that the government comes up with a package of tax amendments, that is those amendments, which have not been fully tackled since December – in the areas of small, mid-scale business, in particular SoDra [social insurance fund], health insurance other taxes, as early as in June. I really want to believe that this will be done,” Grybauskaite told reporters after the meeting with Prime Minister Kubilius.

“The European Commission shall be notified by July who specifically will implement the Swedlink project,” president-elect said.

Speaking about potential nationalization of the national energy company Leo LT she reiterated that the company should be broken up.  “I support as quick break-up of this combination as possible and implementation of all strategic projects by a public company. This is my position in principle and, as I understand, the government agrees so far. What still remains is just the options and ways how this should be done,” Grybauskaite said to the BNS.

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Entry filed under: Baltic States, Economics, Energy, Estonia, Grybauskaite, Latvia, Lithuania, Northern Europe, Politics.

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