More financial discipline is necessary to avoid crisis in the future

Greece should first prepare a stricter plan for saving

Lithuanian officials and society assert that Greece should expand its efforts against its economic troubles and that this should be a prerequisite for receiving aid from other EU member states.

Lithuanian President Dalia Grybauskaite said, the “Greek situation and the decision of the EU member states to provide aid for Greece together with the International Monetary Fund is a good lesson to all states that they should treat their public finances with responsibility.”11President of Lithuania: The President: EU growth strategy – new possibilities for Lithuania (Prezidentė: ES augimo strategija – naujos galimybės Lietuvai), press release, 26 March 2010, available at: http://www.balsas.lt/naujiena/381420/dalia-grybauskaite-es-augimo-strategija-naujos-galimybes-lietuvai (last access: 9 June 2010). According to the Lithuanian President, by “becoming a Eurozone member, Greece has adopted important obligations to conduct responsible fiscal and monetary policy. When in big economic trouble, a state has to make responsible but not populist financial decisions, look for the ways out and only then expect help from other member states.”22President of Lithuania: Economic recovery plan until 2020 – a challenge for all EU Member States (Ekonomikos gaivinimo planas iki 2020 m. – iššūkis visoms ES šalims), press release, available at: http://www.president.lt/lt/spaudos_centras_392/pranesimai_spaudai/ekonomikos_gaivinimo_planas_iki_2020_m._-_issukis_visoms_es_salims.html (last access: 9 June 2010).

According to the results of a non-representative survey conducted after the financial package for Greece was adopted by the most popular news portal in Lithuanian Delfi.lt, 66.2 percent of 2,136 respondents, asked what help should be provided to Greece, said that, first of all Greece, should prepare a stricter plan for saving, 18.8 percent said that the EU does not have an obligation to take care of Greece’s problems and 10.6 percent answered that EU member states should express their solidarity and lend Greece the necessary 110 billion Euros.33Baltic news service: Greece has agreed on aid from EU and IMF (Graikija susitarė su ES ir TVF dėl pagalbos), 2 May 2010, available at: http://myep.delfi.lt/news/graikija-susitare-su-es-ir-tvf-del-pagalbos.d?id=31754475 (last access: 9 June 2010).

Lithuania has also suffered from the economic crisis, with Gross Domestic Product drastically falling and the level of unemployment critically growing. As Lithuanian Member of European Parliament (MEP) Zigmantas Balcytis says, “it is not only Greece that is in a bad situation – Lithuania also takes loans with high interest rates.” Therefore, according to this MEP, “there should be no distinction between EU member states belonging to the Eurozone and those not belonging to it, but the support should be provided to all member states depending on how much they have suffered from the crisis.”44Zigmantas Balcytis: Yes, Greece is in a difficult situation, but… (Taip, Graikijai sunku, bet…), 25 March 2010, available at: http://www.balcytis.lt/?p=671 (last access: 9 June 2010).

Possible influence on the accession of new member states to the Eurozone

The general opinion in Lithuania is that the Greek case will influence the reform of the Stability and Growth Pact, although the concrete influences are not extensively indicated. The director of the Institute of International Relations and Political Science of Vilnius University, economist Ramunas Vilpisauskas, says that the Greek case can force the EU member states to correct the rules regarding the functioning of the Eurozone, which might influence the accession of new states to the Eurozone as well. According to him, “it is highly expected that this will have long term consequences for the coordination of the policy among Eurozone member states, its supervision and sanctions for violations of the Stability and Growth Pact.”55Ramunas Vilpisauskas: Greece, euro and Lithuania (Graikija, euras ir Lietuva), 24 March 2010, available at: http://myep.delfi.lt/opinion/graikija-euras-ir-lietuva.d?id=30323695 (last access: 9 June 2010). Lithuanian President Dalia Grybauskaite pins her hope on a special working group: she said she was convinced that the decision of the March 2010 European Council to gather a special working group, which would provide the Council with concrete recommendations on improving financial discipline in the member states, will prevent similar crises in the future.66President of Lithuania: The President: EU growth strategy – new possibilities for Lithuania (Prezidentė: ES augimo strategija – naujos galimybės Lietuvai), press release, 26 March 2010, available at: http://www.balsas.lt/naujiena/381420/dalia-grybauskaite-es-augimo-strategija-naujos-galimybes-lietuvai (last access: 9 June 2010).

More intensive conformation of budgetary indicators is desired but not the harmonisation of direct taxes

Ramunas Vilpisauskas says that the European Commission’s proposals laid down in the communication on reinforcing economic policy coordination are quite radical and raise a number of questions. These questions, according to Ramunas Vilpsauskas, are not only associated with the possibility that these proposals might limit the member states’ sovereignty in budgetary policy. Another discussable issue is an EU support fund for countries experiencing difficulties and the conditions upon which the financial resources would be provided, as this remains unclear. Finally, he says, it is not obvious how much these proposals would be applied to non-Eurozone member states or what their relation with the Europe 2020 Strategy, with the national reform programmes and with the EU financial perspective will be. According to him, “these proposals have both positive and negative consequences for Lithuania. On the one hand, it would limit the recent practice of politicians to waste money before elections, but on the other hand this means recognition of an inability to conduct a reasonable, independent budgetary policy.” He questions whether a step towards the obligatory conformation procedures of national budgets would not lead to an obligatory conformation of taxes or budget expenditure in the future, as such a scenario would not be favourable to Lithuania, because it would limit our possibilities to conduct an independent policy. His conclusion is that “an area of a single currency should be related with a more intensive conformation of the budgetary indicators but should not be a basis for harmonisation of direct taxes.”77Ramunas Vilpisauskas: Let the European Union decide for us, because we are incapable to do that ourselves? (Tegu už mus sprendžia Europos Sąjunga, nes patys nesugebame), 19 May 2010, available at: http://myep.delfi.lt/opinion/r-vilpisauskas-tegu-uz-mus-sprendzia-europos-sajunga-nes-patys-nesugebame.d?id=32478591 (last access: 9 June 2010).

Europe 2020 Strategy – a basis for the recovery of the European economy

Lithuanian officials greatly welcome the Europe 2020 Strategy. Lithuanian President Dalia Grybauskaite said the Lithuanian goal to have an economically strong and competitive EU could only be achieved through the successful implementation of the Europe 2020 Strategy.88President of Lithuania: President will deliberate on the EU strategy for the growth of economy in Brussels (Briuselyje Prezidentė svarstys ES ekonomikos augimo skatinimo strategiją), press release, 24 March 2010, available at: http://www.president.lt/lt/spaudos_centras_392/pranesimai_spaudai/briuselyje_prezidente_svarstys_es_ekonomikos_augimo_skatinimo_strategija.html (last access: 9 June 2010). She also noted that the goals of the Strategy confirmed at the March European Council are of great importance to Lithuania.99President of Lithuania: The President: EU growth strategy – new possibilities for Lithuania (Prezidentė: ES augimo strategija – naujos galimybės Lietuvai), press release, 26 March 2010, available at: http://www.balsas.lt/naujiena/381420/dalia-grybauskaite-es-augimo-strategija-naujos-galimybes-lietuvai (last access: 9 June 2010).

Europe 2020 Strategy is seen by most Lithuanian officials as a basis for the recovery of the European economy. Lithuanian Foreign Affairs Minister Audronius Azubalis said: “We have to use this Strategy as the instrument promoting quicker recovery of the EU and Lithuanian economies and fostering the most important structural reforms.”1010Foreign Affairs Ministry: Foreign Affairs Minister presented EU Member States ambassadors the priorities of Lithuanian European policy (Užsienio reikalų ministras Europos Sąjungos šalių ambasadoriams pristatė Lietuvos Europos politikos prioritetus), press release, 14 April 2010, available at: www.urm.lt (last access: 9 June 2010). Former Lithuanian Foreign Affairs Minister Vygaudas Usackas mentioned that this Strategy will not only help the EU recover from this crisis, but also prevent crises in the future.1111Foreign Affairs Ministry: The preparation of the forthcoming European Council has been deliberated in Brussels (Briuselyje aptartas pasirengimas artėjančiai Europos vadovų tarybai), press release, 8 December 2009, available at: http://www.alfa.lt/straipsnis/10303389 (last access: 9 June 2010).

Lithuanian officials express their support for the main elements of the Strategy. Vygaudas Usackas positively evaluated the main direction of the Strategy – to create knowledge based united and sustainable economy.1212Ibid. Lithuanian President Dalia Grybauskaite named the following Strategy goals as the most important to Lithuania – securing the growth of employment, limiting the level of poverty, decreasing social exclusion and securing investments in the economy which would be based on the achievements of modern science and highly qualified specialists.1313President of Lithuania: President will deliberate on the EU strategy for the growth of economy in Brussels (Briuselyje Prezidentė svarstys ES ekonomikos augimo skatinimo strategiją), press release, available at: http://www.president.lt/lt/spaudos_centras_392/pranesimai_spaudai/briuselyje_prezidente_svarstys_es_ekonomikos_augimo_skatinimo_strategija.html (last access: 9 June 2010).

In the context of the new Strategy, special attention was paid to energy issues. Former Lithuanian Foreign Affairs Minister Vygaudas Usackas claimed, “it is extremely important to Lithuania that such priorities as diversification of energy resources, creation of an EU energy market and coordinated external EU energy policy would be included in the strategy.”1414Permanent Representation of Lithuania to the European Union: In Brussels EU Foreign Affairs Ministers paid much attention to Afghanistan (Briuselyje ES užsienio reikalų ministrai daug dėmesio skyrė Afganistanui), 25 January 2010, available at: http://www.eurep.mfa.lt/index.php?-305056780 (last access: 9 June 2010). After the adoption of the European Commission’s communication, Lithuanian President Dalia Grybauskaite stressed that it is important that an obligation to develop the necessary infrastructure for growth, which would enable Lithuania to implement the energy interconnections that will eliminate Lithuanian energy isolation, are foreseen in the Strategy.1515Balsas.lt: The President: EU growth strategy – new possibilities for Lithuania (Prezidentė: ES augimo strategija – naujos galimybės Lietuvai), 26 March 2010, available at: http://www.balsas.lt/naujiena/381420/dalia-grybauskaite-es-augimo-strategija-naujos-galimybes-lietuvai (last access: 9 June 2010).

While most Lithuanian officials are enthusiastic about the new Europe 2020 Strategy, Ramunas Vilpisauskas claimed that the new Strategy should be evaluated according to its ability to deal with the shortcomings of the Lisbon Strategy. He listed the numerous, differently defined and sometimes contradictory goals in most fields of public policy: the gap between the national and EU reform processes and non-binding nature of the implementation of the Strategy are among the major shortcomings of the new Strategy.1616Ramunas Vilpisauskas: EU2020: déjà vu or the preparation for the progress? (Europa 2020: déjà vu ar pasirengimas proveržiui?), 16 March 2010, available at: http://myep.delfi.lt/news/europa-2020-deja-vu-ar-pasirengimas-proverziui.d?id=30046325 (last access: 9 June 2010). chairman of the committee on European affairs of Lithuanian parliament Ceslovas Vytautas Stankevicius said he wanted to see the social dimension strengthened in the Europe 2020 Strategy.1717Committee on European affairs of the Lithuanian parliament: Chairman of the committee on European affairs Ceslovas Vytautas Stankevičcus says that the social dimension should be enforced in the future EU2020 Strategy (Europos reikalų komiteto pirmininkas Česlovas Vytautas Stankevičius pasisako, kad būsimojoje 2020 m. ES strategijoje turi būti sustiprintas socialinis matmuo), press release, available at: www.lrs.lt (last access: 9 June 2010).

    Footnotes

  • 1President of Lithuania: The President: EU growth strategy – new possibilities for Lithuania (Prezidentė: ES augimo strategija – naujos galimybės Lietuvai), press release, 26 March 2010, available at: http://www.balsas.lt/naujiena/381420/dalia-grybauskaite-es-augimo-strategija-naujos-galimybes-lietuvai (last access: 9 June 2010).
  • 2President of Lithuania: Economic recovery plan until 2020 – a challenge for all EU Member States (Ekonomikos gaivinimo planas iki 2020 m. – iššūkis visoms ES šalims), press release, available at: http://www.president.lt/lt/spaudos_centras_392/pranesimai_spaudai/ekonomikos_gaivinimo_planas_iki_2020_m._-_issukis_visoms_es_salims.html (last access: 9 June 2010).
  • 3Baltic news service: Greece has agreed on aid from EU and IMF (Graikija susitarė su ES ir TVF dėl pagalbos), 2 May 2010, available at: http://myep.delfi.lt/news/graikija-susitare-su-es-ir-tvf-del-pagalbos.d?id=31754475 (last access: 9 June 2010).
  • 4Zigmantas Balcytis: Yes, Greece is in a difficult situation, but… (Taip, Graikijai sunku, bet…), 25 March 2010, available at: http://www.balcytis.lt/?p=671 (last access: 9 June 2010).
  • 5Ramunas Vilpisauskas: Greece, euro and Lithuania (Graikija, euras ir Lietuva), 24 March 2010, available at: http://myep.delfi.lt/opinion/graikija-euras-ir-lietuva.d?id=30323695 (last access: 9 June 2010).
  • 6President of Lithuania: The President: EU growth strategy – new possibilities for Lithuania (Prezidentė: ES augimo strategija – naujos galimybės Lietuvai), press release, 26 March 2010, available at: http://www.balsas.lt/naujiena/381420/dalia-grybauskaite-es-augimo-strategija-naujos-galimybes-lietuvai (last access: 9 June 2010).
  • 7Ramunas Vilpisauskas: Let the European Union decide for us, because we are incapable to do that ourselves? (Tegu už mus sprendžia Europos Sąjunga, nes patys nesugebame), 19 May 2010, available at: http://myep.delfi.lt/opinion/r-vilpisauskas-tegu-uz-mus-sprendzia-europos-sajunga-nes-patys-nesugebame.d?id=32478591 (last access: 9 June 2010).
  • 8President of Lithuania: President will deliberate on the EU strategy for the growth of economy in Brussels (Briuselyje Prezidentė svarstys ES ekonomikos augimo skatinimo strategiją), press release, 24 March 2010, available at: http://www.president.lt/lt/spaudos_centras_392/pranesimai_spaudai/briuselyje_prezidente_svarstys_es_ekonomikos_augimo_skatinimo_strategija.html (last access: 9 June 2010).
  • 9President of Lithuania: The President: EU growth strategy – new possibilities for Lithuania (Prezidentė: ES augimo strategija – naujos galimybės Lietuvai), press release, 26 March 2010, available at: http://www.balsas.lt/naujiena/381420/dalia-grybauskaite-es-augimo-strategija-naujos-galimybes-lietuvai (last access: 9 June 2010).
  • 10Foreign Affairs Ministry: Foreign Affairs Minister presented EU Member States ambassadors the priorities of Lithuanian European policy (Užsienio reikalų ministras Europos Sąjungos šalių ambasadoriams pristatė Lietuvos Europos politikos prioritetus), press release, 14 April 2010, available at: www.urm.lt (last access: 9 June 2010).
  • 11Foreign Affairs Ministry: The preparation of the forthcoming European Council has been deliberated in Brussels (Briuselyje aptartas pasirengimas artėjančiai Europos vadovų tarybai), press release, 8 December 2009, available at: http://www.alfa.lt/straipsnis/10303389 (last access: 9 June 2010).
  • 12Ibid.
  • 13President of Lithuania: President will deliberate on the EU strategy for the growth of economy in Brussels (Briuselyje Prezidentė svarstys ES ekonomikos augimo skatinimo strategiją), press release, available at: http://www.president.lt/lt/spaudos_centras_392/pranesimai_spaudai/briuselyje_prezidente_svarstys_es_ekonomikos_augimo_skatinimo_strategija.html (last access: 9 June 2010).
  • 14Permanent Representation of Lithuania to the European Union: In Brussels EU Foreign Affairs Ministers paid much attention to Afghanistan (Briuselyje ES užsienio reikalų ministrai daug dėmesio skyrė Afganistanui), 25 January 2010, available at: http://www.eurep.mfa.lt/index.php?-305056780 (last access: 9 June 2010).
  • 15Balsas.lt: The President: EU growth strategy – new possibilities for Lithuania (Prezidentė: ES augimo strategija – naujos galimybės Lietuvai), 26 March 2010, available at: http://www.balsas.lt/naujiena/381420/dalia-grybauskaite-es-augimo-strategija-naujos-galimybes-lietuvai (last access: 9 June 2010).
  • 16Ramunas Vilpisauskas: EU2020: déjà vu or the preparation for the progress? (Europa 2020: déjà vu ar pasirengimas proveržiui?), 16 March 2010, available at: http://myep.delfi.lt/news/europa-2020-deja-vu-ar-pasirengimas-proverziui.d?id=30046325 (last access: 9 June 2010).
  • 17Committee on European affairs of the Lithuanian parliament: Chairman of the committee on European affairs Ceslovas Vytautas Stankevičcus says that the social dimension should be enforced in the future EU2020 Strategy (Europos reikalų komiteto pirmininkas Česlovas Vytautas Stankevičius pasisako, kad būsimojoje 2020 m. ES strategijoje turi būti sustiprintas socialinis matmuo), press release, available at: www.lrs.lt (last access: 9 June 2010).

The reports focus on a reporting period from December 2009 until May 2010. This survey was conducted on the basis of a questionnaire that has been elaborated in March and April 2010. Most of the 31 reports were delivered in May 2010.

The EU-27 Watch No. 9 receives significant funding from the Otto Wolff-Foundation, Cologne, in the framework of the ‘Dialog Europa der Otto Wolff-Stiftung’, and financial support from the European Commission. The European Commission is not responsible for any use that may be made of the information contained therein.