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.