Butkevicius resigns post in frustration over tax policy

  • 2005-04-13
  • By The Baltic Times
VILNIUS 's Finance Minister Algirdas Butkevicius jolted the government coalition on Tuesday when he announced he sudden resignation due to what he claims is his partners' distrust in his leadership.

Speaking to journalists after his decision, Butkevicius, a Social Democrat, said his efforts at the ministry were being undermined by coalition partners. "I felt a strong opposition from coalition partners. It is quite difficult for me and the prime minister to fight against our partners. I realized that this could be understood as distrust of the finance minister," he said.

Butkevicius is the first minister to leave the current coalition, which has been in power for less than four months. He said, however, in his opinion the coalition would not collapse due to his resignation.

The ruling coalition consists of the Social Democrats, the Labor Party, the Social Liberals and the Union of Farmers and New Democracy Parties.

For the minister, the proverbial straw was the decision by the coalition's political council to reject an additional 4 percent levy on corporate profits and to agree to a so-called solidarity tax on corporate turnover to offset a decline in budget revenues due to result from the proposed reduction of income tax.

Butkevicius said that the so-called solidarity tax might be contrary to EU law, and Lithuanian businessmen could fight it in the European Court of Justice.

After meeting with Prime Minister Algirdas Brazauskas on Wednesday, Butkevicius said he would stay on as minister until May 14.

Meanwhile, the Social Liberal have proposed their parliamentary coalition partners to form a cooperation council as a means to strengthening the coalition, which is widely regarded by Lithuanian observers as being tenuous.

"It is necessary to establish a cooperation council of the ruling coalition in Parliament that would coordinate all issues and decisions would be made only after having coordinated positions," faction leader Vaclovas Karbauskis told a press conference Wednesday.

In Karbauskis' words, the establishment of Cooperation Council "would ensure more stable, more rational work of the parliamentary majority."

Over nearly five months of the current ruling majority's work, there have been some arguments among coalition partners over appointments, the use of EU funds, tax reform and bills.