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Sunday 18.03.2018 | Name days: Ilona, Adelīna

Lithuania’s 2018 budget focuses on spending cuts, NATO commitment and social security

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Linas Jegelevičius for the BNN

Lithuania’s 2018 budget, approved this week by the Seimas, Lithuanian Parliament, makes history for being the first budget ever with fewer spending for the governmental sector, the commitment to NATO of earmarking 2 per cent of the gross domestic product to defence and bigger allotments for social security. The budget was adopted by 84 MPs, 29 voted against, with 15 abstentions.

Those who voted in favour of the budget included four Order and Justice MPs, three Liberal Movement MPs, all eight MPs of the Electoral Action of Poles in Lithuania–Christian Families Alliance, and two non-attached members of the Seimas.

The opposition Homeland Union-Lithuanian Christian Democrats (TS-LKD) blasted the budget, claiming that the next year’s revenue-spending plan was not focused on the future.

Gabrielius Landsbergis, the TS-LKD leader, said he was «quite surprised» to see part of the opposition parliamentarians vote in favour of the budget.

He speculated that the ruling Farmers and Greens and some opposition lawmakers may have colluded.

«I am really surprised that although the demands of the opposition fractions have not been met and considering that the budget balances on the brink of lies and fake promises, some of the opposition lawmakers voted for it. I wonder what happened?” Landsbergis asked rhetorically before adding, «Who can deny that the Government has bought their votes promising support for the projects in the regions from which the parliamentarians are from?»

Landsbergis lambasted the budget, claiming that no change will come to the ordinary man with its approval.

Although 2018 state budget is projected to feature a deficit, yet the budgets of the social security and health along with the municipal budgets should be a surplus.

The surplus of the public finances should stand at 0.6 per cent of the GDP, 0.5 percentage points above this year’s level (0.1 per cent of the GDP). If the targets are met, Lithuania’s public finances would be in surplus for three consecutive years.

Commenting, Finance Minister Vilius Šapoka said that the main focus of the next year’s budget will be on reduction of poverty, tackling social exclusion (for the purpose, 600 million euros was granted more than in 2017), giving a boost to the country’s safety, promoting health care and entrepreneurship and investments in the country.

In 2018, Lithuania expects to scoop up 9.071 billion euros in state revenues (including 2.304 billion euros in support from the European Union and other international aid), while spending should total 9.558 billion euros.

The voting on Lithuania’s 2018 state budget showed that there should be enough political support in the Seimas for other reforms, too, Prime Minister Saulius Skvernelis underlined after the vote.

«I thought there would be slightly fewer (votes). This shows we can move forward with the necessary reforms, and it’s quite clear that we can reach agreement and obtain support from those political forces that do want progress in the country and vote for progress and for solutions to old problems,» PM said.

Skvernelis added that at the end of the year he would be able to name the government’s key projects that would require a majority of votes in the parliament.

Weighing in on 2018 budget, President Dalia Grybauskaitė underscored through her adviser that the new budget is more socially sensitive and responsible.

«We see that this budget is indeed more socially sensitive and responsible, reflecting our priorities for the next year. When it comes to the share of public resources intended for the social sector, we had a major gap from the European average. In 2018, Lithuania’s share should be around 13 percent, while the average in Europe is 18-19 percent. The gap remains but we are drawing closer,» Mindaugas Linge, the adviser, told Žinių Radijas news radio.

«Additional injections, additional 600 million euros have been envisaged, and this should contribute to settling social exclusion issues by at least keeping the gap from widening, however, this probably won’t solve the deep-rooted problems,» said the presidential adviser.

Yet President seems to be not quite happy with the performance of the Lithuanian Farmers and Greens-orchestrated Government during its first year in power.

«Over the first year in office of Lithuania’s new government, there were no targeted solutions, with reforms replaced by insignificant decisions,» President Dalia Grybauskaitė told daily Lietuvos Žinios.

«People pinned hopes of major changes and a batter life with the new ruling majority, giving the coalition an immense credit of confidence. However, the first year in office of the Lithuanian Farmers and Greens Union is marked by uncertainty, fading expectations and scattered confidence. The time has come to keep the promises, however, the political agenda, which has been locked in vegetative phase for a long time, does not include any targeted solutions even a year later. Reforms are placed by insignificant decisions in connection to buildings, jobs, working hours and homework for school students,» said the president.

In her words, «major management mistakes (are emerging) where institutional memory is destroyed without creating anything new.»

«Many fields are headed by acting leaders, and the areas start to look like construction sites with visions and good intentions only, however, without a clear determination on what, why and how it will be constructed,» Grybauskaitė underlined.

The president also said she saw inconsistency in values when the ruling majority, which has declared a war on corruption, lacked the will to deter corruption gaps in internal deals of municipalities and take a principled stance on the actions done, for example, by Artūras Skardžius, a MP who allegedly breached law on separation of personal and public interests.

Responding to criticism from Grybauskaitė, PM Skvernelis shot back that «all the projected reforms are being implemented» and will be up for assessment in three years, after the work is complete.

« We can have different views on how this should be done but saying that nothing is happening… It seems to me that there is a phrase to describe this: a person who does nothing is never wrong. And there is one person in our country who never makes a mistake,» PM emphasised referring to the President.

He added that all of the reforms that have been planned and stipulated in the government’s program were being implemented, dismissing the accusations of destroying something that should have been left untouched.

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