[ad_1]
“It is difficult to expect the measures to take effect immediately, unless the distribution of money is made directly to people. With business, you react differently and it is difficult to objectively assess who needs what help. I think we have to wait for another one. good fall here to see what the situation will be with the pandemic and overall what measures will be needed and how they have worked. Given the overall balance of pandemic management and economic support and promotion, Lithuania probably looks Very good, but it is a preliminary evaluation, ”said S. Jakeliūnas to Eltai.
According to him, other countries were able to implement some support measures more quickly because they had faced similar situations much earlier.
“Even during that crisis, there was a completely different strategy, policy and other opportunities. Countries – Sweden, Germany, others – have taken steps to support the population. Some have learned those lessons, others have had to learn and try to act. As much as possible. Since downtime funding was not 100%, it was always necessary to assess how much the business is contributing and whether it is contributing. Since those controls were in place, this was inevitably a drag.
But, on the other hand, money cannot be shared, because the long-term consequences of sharing money will be felt by everyone, including all taxpayers, and this should be avoided, “said the MEP.
According to the MEP, public debt should not pose a major threat to Lithuania if it continues to be able to borrow at low interest rates.
“It is difficult to balance these measures and their long-term impact, specifically the impact on debt. Debt will increase and probably by the end of this year, as the economy falls and GDP falls, debt may exceed 50 % GDP But it is not a threat if the interest we borrow is low and does not exceed 1%, and the measures and decisions, especially the tax cuts, will not have a long-term effect, “he said.
However, according to S. Jakeliūnas, the Presidency’s proposal to reduce the personal income tax (PIT) may increase the risk that the public debt will become unsustainable.
“There are now discussions in the Seimas about tax cuts, especially the PIT. If such decisions are made, then that debt may become unsustainable, since it will be evaluated that the country has not managed its problems in the short term, but has increased the long-term risk. Consequently, loans can be more expensive and that debt can cause problems. If this situation gets under control, I think 50%. The debt / GDP ratio will not be a problem. If there is no such effect in 2021, 2022, so I think cheap loans will even allow us to lower interest rates compared to what we have now, because we are still paying expensive interest rates, ”said S. Jakeliūnas.
“If that process is controlled, I don’t see any problem with increasing debt,” added the MEP.
According to him, the impact of the measures on budget revenues will be enormous, but the issue of this year’s budget review is more legal, because with this procedure now, it may not be clear what the situation will be with the budget in a few months.
“As the uncertainty is still very high and, in the budget review, it is not clear what will happen in the fall, I understand the government, which first wants to stabilize the situation and, when the situation is better, it may consider a budget review. Perhaps there is a more legal problem here. I am not commenting on whether it is necessary to review the budget, but it is understandable that the impact on both income and expenses of the budget is enormous and, apparently, economic stabilization is a priority rather than a job of technical review of the budget, at least in the eyes of the Government, “said S. Jakeliūnas.
Evaluate the proposal of Germany and France to establish an EU economic recovery fund of 500 billion euros. S. Jakeliūnas said he believed that it would be beneficial for Lithuania to recover the EU after the coronavirus crisis.
“It just came to our attention then. Germany has always opposed general EU indebtedness, which is what it is now proposing. It is true that such a lending mechanism will be integrated into the multiannual financial perspective.
I think Lithuania benefits from this, because so far it seems that we can manage our financial risk, but we don’t know what will happen next and next year. As the concentration of Swedish banks in the Lithuanian banking system remains very high, the Swedish economy, like other economies, will certainly suffer. The simple fact that Swedish banks are in trouble in Sweden could cause problems for Lithuania, Latvia and Estonia. In terms of insurance, we should participate in such mechanisms not only so that they are not used inefficiently, but also in the moderate attitude of Germany, which has always been, I think, protecting the EU from excessive indebtedness and inefficient use ”, said.
“Of course, there are some countries that will oppose it, so there will be a lot of debate, especially to convince Austria, the Netherlands, Finland, maybe Sweden, you need a consensus in the European Council and elsewhere, there are possibilities, but the risks persist, “he added.
No part of this publication may be reproduced without the written permission of ELTA.
[ad_2]
