Prime Minister Kubilius asks people to be understanding – interview

January 5, 2010 at 12:27 pm Leave a comment

On 31 December the Vilniaus diena paper published an interview with the Prime Minister Adnrius Kubilius. Even thought the 2009 was a very challenging year the PM hopes that 2010 will be a less difficult year. See the interview

Vilniaus diena – Was 2009 a difficult year for you personally?
Kubilius – This was an interesting year. All these challenges we had to face were sometimes extraordinary, therefore interesting.

Of course, we had to make some difficult decisions. However, I would like to thank the people that they have endured the effects of these decisions.

Vilniaus diena – They have endured them with much difficulty, but have they understood them?
Kubilius – It seems to me that the majority of them have understood the necessity of these decisions. They have understood just as we, the government, have understood that, unfortunately, we cannot avoid making difficult decisions. We had a very clear understanding that there was no other alternative.

The example of our neighbours shows that there is no other alternative. If we do not believe in ourselves, we can compare our situation with the situation in Latvia or Estonia, which have chosen the same way and have implemented similar decisions. They have cut their spending and are planning to cut spending even further; they have increased their taxes as well.

Vilniaus diena – But the Latvian Constitutional Court has ruled against pension cuts. We may have a similar ruling in Lithuania. Will you assume the responsibility if your proposals are assessed as legally invalid?
Kubilius – I would not rush to forecast that Latvia’s decision will be automatically approved in Lithuania. First of all, Latvia has a different system of pension benefits. Moreover, it has different procedures for reducing pensions and other social benefits than in Lithuania. I think that our procedures are more appropriate.

However, I would like to underscore that we will soon discuss the reform of the entire system of social benefits. One of the issues we will discuss is how to compensate for the reduced pensions. This is why I doubt we should be so apocalyptic about the legally invalid decisions.

Vilniaus diena – Many people see 2009 as the year of riots, worries about the future, growing unemployment, decreasing salaries and social benefits, and other disasters. What is your opinion?
Kubilius – This has been the year of energetic activities. I think we have made quite effective decisions that allowed us to stabilize the financial system. Moreover, we have reorganized things in many areas. I would like to mention here the energy sector. I think that comparing the situation with the one we had at the end of 2008, the future looks much better and we have made a huge leap forward.

Just the fact that we have decided to disband LEO LT is very significant. This was not a painful disbandment. We have clearly moved forward with the energy projects, such as the electricity bridge to Sweden, market liberalization, and the construction of a new nuclear power plant…

Vilniaus diena – It looks like we will have to face even more challenges in 2010. Some foreign analytics forecast that we will have one of the worst economy falls, unemployment will reach 20 per cent, salaries will be cut, prices of electricity and other prices will grow. Is it possible to be optimistic?
Kubilius – Of course, there will be challenges. But we should see the positive side. There are some positive signs. I am doing my best to encourage the people to see the good signs. For example, SEB Bank has announced a new forecast, according to which the economy could grow by 1 per cent or so in 2010. Earlier, the forecast was that it would fall by some 3-4 per cent.

On the other hand, the forecasts change every day. When there is an economic crisis, nobody is able to forecast the future correctly.

Vilniaus diena – Which means that the SEB forecast may prove to be incorrect?
Kubilius – Well, at least it is optimistic. This is also very important (smiling).

Vilniaus diena – Does this mean that you are optimistic about 2010?
Kubilius – I think that as far as economic forecasts are concerned, there is a certain rule: It is difficult to predict what is going to happen because of the turning points, this is why when the indicators are falling, they often fall lower than expected; and when they are growing, they grow higher then predicted.

Vilniaus diena – But your optimistic statements will not comfort every fifth Lithuanian who is in danger of being unemployed next year.
Kubilius – Without a doubt, the economy will continue falling for some time. However, the countries to which we export have started to recover from the crisis. This allows us to be more optimistic about 2010 than we were in mid-2009.

We have corrected the forecasts. The Finance Ministry has announced that the economy this year will fall not by 18 per cent, but by 15 per cent. This is an improvement. We can expect much better results next year.

Of course, we will still have serious problems with the budget next year, the debt will grow and the administration expenses will also grow.

Another headache is unemployment. We will seek to find solutions to this problem. This could be done through economic stimulus programmes.

Vilniaus diena – Do you think that unemployment will not reach 15-20 per cent?
Kubilius – The data for the last quarter of 2009 shows that unemployment was stabilized at the level of 11-12 per cent. It is difficult to predict whether this tendency changes or not. However, even in this area there are some signs of optimism.

Vilniaus diena – In your opinion, have we reached the bottom?
Kubilius – We certainly have reached the bottom, and have started slowly moving upward. Of course, we will be in a difficult situation for some time, but we can be more optimistic now because we see the light at the end of the tunnel. This means that we can continue our work to improve our economy and wellbeing.

Vilniaus diena – This economic growth could bring about political instability. Are you confident you will remain the prime minister?
Kubilius – I would like to underscore that the economic growth in the second half of 2010 could improve public mood. I would like to thank the people for this year, despite the several aggressive riots and the broken windows in the Seimas [parliament], the people did not continue [their violence]. This means that society understands that violence will not help us overcome the economic crisis.

There is more optimism in society. This means that political destabilization will be less possible. Because of that the political situation will be more stable and peaceful. I believe that the ruling coalition will be effective and consistent in its work.

Vilniaus diena – Because of the crisis, you have to dedicate more attention to politics and your work in the government. Is your wife not jealous of the time you spend at work? Perhaps she reproaches you for spending most of your time at work and earning less than before?
Kubilius – No. I think I and Rasa [Kubilius’s wife] have got accustomed to this way of living. The peaceful atmosphere at home is very important; it helps me to deal with all these challenges in the Seimas and the government. The atmosphere in our home is certainly peaceful (smiling).

Translated by the BBC Monitoring

Entry filed under: Baltic States, Estonia, Latvia, Lithuania, Northern Europe, Politics, Scandinavia, Sweden. Tags: .

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