On Monday 27 April, Lithuanian president Dalia Grybauskaite had her first meeting with 24 new and 33 re-elected mayors, following the country’s first direct mayoral elections in post-Soviet history at the end of March 2015.
Grybauskaite rebuked the 57 heads of municipalities for increasing municipal debts, and made it one of the first issues the mayors are to address.
She pointed out that between the end of 2004 to 2014, municipal debts had increased five-fold from around €128 million to approximately €628m.
In reference to the Lithuanian capital, Vilnius, the president said her main areas of concern are municipalities which “are indebted the worse, and where the most opaque things happened.”
In response to Grybauskaite’s criticisms, newly elected Vilnius mayor Rimagijus Simasius of the Liberal Movement party stated financial changes will only be visible in the city after 2016.
Simasius pointed out that for the 2015-2016 financial year, municipality spending will continue to happen quickly until after his first budget as mayor is approved.
The 2015 budget was put in place by previous mayor Arturas Zuokas.
“Part of previous liabilities remain,” said Simasius. “The budget for 2015 had been approved and money is being spent fast.
“Naturally, it is hard to expect a breakthrough this year. However, I see ways how to improve spending next year, manage companies better and solve some of the problems.”
He added he will be looking to foreign financial institutions to help manage debt refinancing in Vilnius, and he has been in discussion with a number already.
However, he did not disclose who they were.
“There have been preliminary talks and I have witnessed a positive reaction from financial institutions,” concluded Simasius.
“My goal is not to limit ourselves to Lithuanian financial institutions but to talk with foreign ones as well, and consider all borrowing opportunities.”