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Kirkilas, Grybauskaite trade barbs over economy

  • 2008-07-03
  • By TBT staff

NOT SEEING EYE TO EYE: The commissioner and the prime minister disagree on the running of the economy.

VILNIUS - Prime Minister Gediminas Kirkilas and Dalia Grybauskaite, Lithuania's representative on the European Commission, reignited their ongoing feud over the health of Lithuania's economy, with the head of government becoming so exasperated that he threatened to take his personal grievances to Brussels.
For the past three years Grybauskaite, the EU's budget commissioner, has voiced criticism of Lithuania's fiscal policy, which continues to be aggressive despite the high-inflation environment and the Baltic state's looming energy predicament.

After arriving in Lithuania on June 20, Grybauskaite, a former finance minister, revisited her earlier thesis that the Kirkilas government is orchestrating "a feast in the time of famine" with its irresponsible fiscal policy. 
She said the excessive spending continued and the government has failed to take any measures to ease the "complex situation."

"It would be a difficult one for any government, especially one in the pre-election stage, and one that is, after all, a minority government," to remedy the current imbalances in the economy.
Grybauskaite, who according to a recent poll is Lithuania's most popular politician, said personalities, competence and political will were also factors preventing a change in policy. "I don't care to comment further," she told journalists.

Kirkilas shot back, accusing Grybauskaite of doing nothing for Lithuania while in Brussels. His frustration peaked, and he said he would file a complaint about Grybauskaite's behavior to her boss, EC President Jose Manuel Barroso.

"I will address Barosso in a letter asking whether there is really such a tradition in the EC that a country's commissioner comes to the country and criticizes it," he told LNK TV news.
The threat seemed at best bizarre, and indeed Kirkilas was forced to backtrack, calling his words a "joke."
"I am sorry that some people don't understand my jokes," he told reporters four days later on June 25. "I can do this [address Barroso] in person just as well and have done so on numerous occasions. And Barroso has many a time said that a commissioner represents the EU, not a national state," Kirkilas said.
Kirkilas, a Social Democrat, took over the PM's spot in July 2006.

Prior to taking up her post in 2004, Grybauskaite was a non-aligned minister. She was invited to the Cabinet by former PM Algirdas Brazauskas in 2001.
The tradeoff sparked a minor debate on commissioners' split loyalties: formally, the commissioners are obligated to place the EU's interests over national interests. 

However, as Kirkilas said, "The European Commission is subordinate to national governments, the European Council, not the other way around. Simply speaking, they are not our superiors…They are not superiors who come from Moscow, as had been in the past, and give us orders," Kirkilas said.
Asked if Grybauskaite had the right to criticize Lithuania, Kirkilas said yes, but only after she resigned her position on the commission.

Grybauskaite defended her own stance, saying on June 25 that "European Commissioners are  authorized to represent not only their specific field, but also to present the EC's general opinion on all issues."
"All that I say is the opinion of the commission, not my own. I am on a mission here as a European commissioner," she said.

Regardless, economists agree that Lithuania's situation is precarious. Inflation is at a 10-year high and is set to continue climbing, yet the government continues spending through deficit budgets. Worse, the Baltic state is destined to see a spike in energy prices beginning in 2010 after it is forced to shut down its nuclear reactor and import electricity.

To be sure, many international analysts have lauded Lithuania's economy since it has not overheated 's exactly what happened in Estonia and Latvia 's yet they also warn of pre-election populism, which could spark a wave of harmful spending.

Grybauskaite said she gave plenty of warnings to the government. "Things this government should have done I indicated three years ago or a year ago," she complained.
She added that the commission holds a constant dialogue with the Kirkilas Cabinet, even though interaction is not perfect.

"The government is told far more than you are hearing here today. You are well aware that we first deal with the governments and only then do we begin speaking publicly. When you go public, that already shows that things aren't going well," she said.

Grybauskaite also slammed a statement by Lithuanian politicians that the euro could be introduced in 2010 or 2011. After a visit to Brussels, Kirkilas said that the Baltic state had a chance to introduce the euro particularly in one of these two years.

"This date sounds ridiculous. Until the government takes measures against inflation, speculations about euro entry dates are not even permissible," she told a local paper.
Before leaving Lithuania, the commissioner tried to smooth out the damage, saying that use of EU funds has improved.

"I am glad to say that progress [with absorbing EU funds] is obvious. Time is pressing, and some areas that remain slow in using EU funds risk losing the financial support," Grybauskaite said in a press release.
She said the country would not only lose millions in unspent funds but would also weaken its positions in negotiations with the EU over future financing.

Last year Lithuania received 3.6 billion litas (1 billion euros) in financial support from the EU, of which 1.6 billion litas, or 46 percent, went to agriculture and 1.6 billion litas to cohesion and structural measures.
A survey conducted in April by a Lithuanian-British market researcher showed that Grybauskaite received an approval rating of 75 percent among Lithuanians, ahead of President Valdas Adamkus, who received 71 percent.

Grybauskaite has been mentioned as a possible presidential candidate after Adamkus' second term ends next year.