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EVERY LITAS COUNTS: The budget law for 2011 foresees a public sector deficit of 5.8 percent of GDP, after an expected 8.1 percent deficit in 2010.
VILNIUS - On Dec. 9, the Lithuanian parliament approved the 2011 budget: 73 MPs voted in favor of it while 56 voted against it and seven MPs abstained. The budget law for 2011 foresees a public sector deficit of 5.8 percent of GDP, after an expected 8.1 percent deficit in 2010. In 2011, the state budget deficit will amount to 2.5 billion litas (720 million euros).
The national budget, which includes state and municipal budgets, projected budgetary revenues of 19.9 billion litas in 2011, without EU funds and other support. The national budget revenues are to total 26.8 billion litas with money from the EU funds and other international financial resources. The expected expenditures of the national budget, excluding the EU funds, will stand at 22.4 billion litas while, including the money from the EU funds, 29.3 billion litas.
Half of the deficit cut, i.e. 1 billion litas is due to come from fighting the shadow economy, mostly from the fight against contraband imported into Lithuania, and half from economic growth. If the fight against contraband imports, which are mostly cigarettes and alcohol from Russia’s Kaliningrad exclave and Belarus, will appear as just wishful thinking, then probably a tax rise later in 2011 will be considered. Cutting the budget deficit to the level of 3 percent of GDP, as allowed by the EU’s Maastricht criteria, is vital for Lithuania’s scheduled introduction of the euro in 2014.
The budget was approved rather easily. The fragmented opposition showed that it is neither capable of giving a political fight to the ruling center-right in the parliament, nor to propose something more appropriate. During the discussion over the budget on Dec. 9, some MPs begged Finance Minister Ingrida Simonyte, who was standing at a rostrum in front of them, to include into the budget some money needed for various projects in their constituencies. However, such begging made little impression on her or the parliament’s majority. Andrius Sedzius, the 34-year old millionaire and now independent MP, was asking to include into the budget some expenditure to schools in his native town of Siauliai, where he was elected two years ago when he was still a Social Democrat Party member. Sedzius is popular among the tabloid-style media because he is also known for having a new 18-year-old girlfriend who is still a schoolgirl in Siauliai and who recently got from Sedzius a new BMW automobile costing 150,000 litas.
“There is a school where all the windows are falling out, together with their frames,” Sedzius said. After his words, MPs of the ruling center-right answered with obvious envy to Sedzius’ romance with the schoolgirl.
“Some sensitivity to schools grows when you have a friendship with a schoolgirl,” Kestutis Masiulis, MP of the ruling Homeland Union – Lithuanian Christian Democrats, answered. Simonyte started to laugh and applaud. “If you can buy a BMW for 150,000 litas for your girlfriend, then you can also give some 200,000 litas to a school,” Antanas Matulas, another MP of the Homeland Union – Lithuanian Christian Democrats, echoed.
Opposition Labor MP Kestutis Dauksys appealed to Parliament Speaker Irena Degutiene, who is also MP of the Homeland Union – Lithuanian Christian Democrats. “Tell your men to calm down. If they need a young girlfriend, they should buy at least a little Mazda for her and they will have her,” Dauksys said.
On the same day, Dec. 9, the parliament also made a decision which will slightly reduce state revenues. Now Lithuanians will have a three-day holiday on Christmas: not only the usual Dec. 25 and Dec. 26, but also Dec. 24, Christmas Eve, which is traditionally the most important Christmas season’s day for Lithuanians when, in the evening, almost all Lithuanian families gather for a vegetarian meal with no alcohol. On the other hand, Lithuanians were not working seriously on Dec. 24 anyway – each Dec. 24, all the offices were empty after the lunch-break despite the official working hours. Lithuanians will need to work on Saturday, Feb. 19, next year for this year’s day off on Dec. 24, but, starting from the Christmas season of 2011, Dec. 24 will be one more full-fledged national holiday.