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The 2010 budget is passed

  • 2009-12-17
  • By Rokas M. Tracevskis

VILNIUS On Dec. 10, the Lithuanian parliament approved the country’s 2010 budget. The budget was supported by 81 MPs while 56 MPs voted against it and two MPs abstained from voting. The vote’s outcome was mostly decided by the United Lithuania (Viena Lietuva) faction which is balancing between the ruling coalition and the opposition in the parliament. In 2010, the deficit of the state budget will reach 4.9 billion litas (1.4 billion euros), which accounts for five percent of GDP. On Dec. 9, the Lithuanian parliament approved the budget for SoDra, the country’s social insurance fund, with its cuts to pensions and social benefits in a thriller-style vote of 66-63 with one abstention.

The total 2010 public sector deficit will be 9.5 percent of Lithuania’s GDP. During the parliamentary debate, Prime Minister Andrius Kubilius pointed out that there have been recent signs of recovery - the third quarter’s GDP was up by six percent over the previous quarter, and Lithuanian exports grew by 7.9 percent for the same period. According to Finance Minister Ingrida Simonyte, in total, the government will have to borrow over 13 billion litas next year. This sum is equal to the 2010 state budget revenues, if not counting co-financing from the European Union funds.

The debts in the budget 2010 are record high. “We still spend more than we earn, and whatever we don’t pay for today, the next generations will have to pay in the future,” President Dalia Grybauskaite said during her press conference on Dec. 7. Kubilius praised his government’s action in cutting social spending. “If not for these actions, the deficit would have ballooned to 17-18 percent, shutting Lithuania out of international debt markets and causing delayed payment of salaries, pensions and other benefits,” Kubilius said. On Dec. 10, some 2,000 mostly elderly people staged a protest against pension and social benefit cuts, which parliament approved the day before.

They were forced to protest in front of the old and shabby Sport Palace because the Vilnius council refused to give permission to protest in front of the Lithuanian parliament. The official reasoning for such refusal was the ongoing reconstruction in the parliament area. The crowd mostly resembled Les Miserables, by Victor Hugo, and one of the posters ironically stated, “The only good pensioner is a dead pensioner.” On Dec. 12, some 1,000 people, organized by the United Democratic Movement of Kestutis Cilinskas, former MP of the now ruling Homeland Union - Lithuanian Christian Democrats (he was sort of a dissident in this party), protested against “domination of the oligarchs’ interests in the country’s policies” in front of the ghostly Sport Palace.

This Nabucco- style slave chorus was singing to themselves - no officials were present at this gathering. The debates of Dec. 10 looked more like a formality. MPs of all colors did not want to provoke some government crisis and premature parliamentary election, because MPs are satisfied with their current status and salaries. Algirdas Butkevicius, leader of the opposition Social Democrat Party, said that the government lacks priorities, and noted that it should focus more on curbing increasing unemployment and emigration. At some point, MPs of the ruling coalition and opposition started to accuse each other of impotence. “It would be a bad sign if we would start using medical terms,” interrupted Parliament Speaker Irena Degutiene.

During the debate, Kubilius’ wife kept sending flirting SMS’s to her husband, who was sitting in the parliament. She suggested wrapping up the debate as soon as possible because the debate was shown live on Lithuanian public TV and she could not watch her beloved TV series, about a women-managed farm in Australia, which is usually shown at that time on television. The budget debates were wrapped up in three hours instead of the scheduled five hours. The SMS from Kubilius’ wife on her mobile phone, which was kept by the prime minister, was photographed by journalists. Immediately after the MPs’ final vote of Dec. 10 on the 2010 budget, Petras Grazulis, MP of the opposition Order and Justice faction, said a short speech and presented two halters made of solid rope to Prime Minister Kubilius and Laimontas Dinius, leader of the United Lithuania faction. Grazulis put the halters on the tables in front of Kubilius and Dinius.

Reacting to this show, Vitas Matuzas, MP of the ruling Homeland Union - Lithuanian Christian Democrats, said a short speech and presented to Grazulis a DVD about the psychiatric hospital in the Lithuanian town of Sveksna. The latter accepted the gift with great joy, smiling and shaking Matuzas’ hand. This represents the general level of the parliamentary debate. No MPs paid attention to Bloomberg’s report from the morning of Dec. 10 about the analysis leaked from the European Central Bank, stating that the Baltics suffered a deeper economic slump than the rest of the EU because of their currency peg. The Baltics’ “adjustment is much sharper than that in other central and eastern European EU member states that have allowed their exchange rates to fluctuate. The tight peg of the exchange rate of the Baltics has implied that these countries have lost significantly on competitiveness,” states the ECB. However, the report didn’t provoke any interest possibly due to the influential Nordic banks’ interests in the Baltics, or maybe just because of a simple lack of competence among the top state officials. o