No ‘kindness’ in next year’s budget

VILNIUS - Lithuania’s parliament began grappling with the 2011 budget on Nov. 23 amid a warning from the government not to loosen austerity measures as the nation emerges from deep crisis, reports AFP. “There is no money for generosity and kindness,” center-right Prime Minister Andrius Kubilius told lawmakers as they began considering the budget.
Speaking on Lithuanian public radio, Kubilius said that the crisis in Ireland underscored continued concerns in international markets. “It is a signal that we cannot dream about loosening belts and huge spending increases,” he said.
Unlike previous budgets that slashed social security and public-sector pay, the 2011 draft focuses on boosting revenue via reforms of state-run firms, plus a crackdown on the shadow economy and on smuggling notably from Belarus and Russia.

The opposition has questioned the plan, saying revenue projections are too optimistic. “That looks more like set of dreams and hopes,” opposition lawmaker Valentinas Mazuronis told the sitting.
The government aims to narrow Lithuania’s public deficit - the gap between state spending and revenue - to 5.8 percent of gross domestic product.

This year’s deficit is projected to be 8.1 percent. Lithuania aims to pull it down to three percent by 2012, in an attempt to meet European Union conditions for adopting the euro by 2014. The government has a wafer-thin majority. The final budget vote is due next month.

Lithuania, a nation of 3.3 million, earned a reputation as an economic ‘tiger’ due to robust growth, notably after joining the European Union in 2004. But it went off the rails amid the global crisis, with its economy contracting by 14.8 percent in 2009 compared with the previous year.

The economy is likely to grow by 1.6 percent this year, Lithuanian authorities forecast.