Kubilius cautions against this government’s budget: it may require a violent belt-tightening

“When you celebrate well, it’s bad in the morning. And when you wake up you think – why was it necessary to waste yesterday so carelessly and irresponsibly? – wrote A. Kubilius about next year’s budget that the Government will approve on Wednesday.

“I don’t have to call it anything other than a ‘painful hangover budget.’ The elections ended half a year of uncontrolled and often irrational money squandering, the “party during the plague” ended and the most expensive election campaign (for state money) in Lithuania’s history. Monday arrived and a painful hangover begins, ”the politician wrote on Facebook.

He said that it would not be the current Prime Minister Saul Skvernelis, but the new head or head of government, who would have a headache from these “hangovers.”

“However, the figures compiled by the Ministry of Finance are indisputable: hangovers are such that they cannot be avoided and their consequences cannot be changed; no matter how hard you try, how many tablets you don’t drink, you will still have a headache,” wrote TS-LKD on Facebook.

He recalled that during the pandemic, rulers boldly borrowed “and recklessly squandered borrowed funds” where it was needed and where it wasn’t.

A. Kubilius happily wrote that the country’s economy managed to withstand the first wave of the pandemic.

“However, it is not clear whether this was due more to the viability of our own economy or to the government’s reckless squandering of borrowed funds that someone will still have to pay back one day,” he said.

Here, according to A. Kubilius, a fundamental question arises, for which there is still no answer.

“It really took so much to spend, so much to borrow, and so much to increase this year’s deficit, because I believe that our economy itself has demonstrated its greater viability than anyone has been able to predict in advance. This is an important topic, but should be left for future expert analysis. “Not for parliamentary research, but for analysis by real experts, because each crisis and its management (even poor ones) is a good lesson for the future,” he wrote.

How painful will these hangovers be?

A. Kubilius, Member of the European Parliament (EP), tried to answer the question: how painful will these “hangovers” be.

“First of all, we must take into account some of the figures that the government has finally revealed when approving the 2021 budget. So far, the government, although unilaterally and unconstitutionally, has increased various expenses, but has avoided including them in this year’s budget, so some of this year’s figures, which we could only speculate on, have only now been clarified, “the politician wrote.

According to him, only the draft budget for next year shows that public debt has grown from around 35% of GDP (in 2019) to 45.6%, and in 2021 to 50.3%.

“And this is already an inevitable process, because the budget deficit has grown to 8.8% this year and the government plans to reduce it to 5% next year.” A deficit is a matter where expenses exceed income received and that difference must be financed with borrowed funds. Therefore, if the government foresees a deficit of 5% next year, it is necessary to anticipate the growth of the debt ”, he assured.

A. Kubilius assured on Facebook that whatever the future can be planned, the hangover will continue to be painful. And you may need to drastically tighten your belts. And this, according to the MEP, is a “gift” from the current government to another government.

“It should be noted that the government’s planned reduction of the deficit from 20% to 5% in 2021 means a rather brutal ‘belt tightening’. From my personal recollections I can say that during the crisis of 2008-2012, our efforts to reduce the deficit at an average of 3% per year were very painful both for the people and for the politicians themselves.

Therefore, the budget planned by this government is not just a budget for a ‘painful hangover’, but also a budget that this government has planned for future governments knowing that it will no longer have to implement such a budget after the lost elections. ‘ ‘wrote the former TS-LKD leader.

He wrote that reducing the deficit without pain is possible only if budget revenue miraculously increases.

“But as you know, miracles only happen in fairy tales. It is also possible in another way: suddenly miraculously and radically reducing public spending after the generous increases of the previous government. I can say from experience that these miracles also happen very difficult in real life ”, A. Kubilius shared his ideas on Facebook.

Don’t you have to save the business again?

The politician considered that such deficit next year was due to the fact that this government very generously allowed a large part of the economy to use the expensive state system of “artificial respiration” or “pulmonary ventilation”, which kept businesses alive.

However, the question arises whether the government’s planned deficit reduction of almost 4% also means that the “artificial respiration” system will be shut down for such businesses.

And then the natural question arises: is all that business ready to turn off “artificial respiration”? (…) Similarly, the natural question arises as to whether the same “pulmonary ventilation” procedure can be extended for an even longer period, that is, whether the necessary “oxygen” reserves have been accumulated or whether it has already been provided. all this semester. (…) And what will happen if the second wave of the pandemic is so painful that it will be necessary to reintroduce the quarantine? ”Asked A. Kubilius on the social network.

At the same time, pointing out that these “unanswered questions” will only make the “hangover” even more painful.

Fear of a long-term future

To criticize the latest budget of this government, A. Kubilius joined the concern for our long-term “long-term” future.

“Even worse than a painful hangover is the fact that the past government seems to have been able to ‘mature’ the long-term future of all of us. A different future: with an innovative, digitized and modernized economy. Because, as required by the European Union, together with next year’s draft budget, the Government must present to the European Commission not only next year’s draft budget, but also a draft plan on how the EU Recovery Fund will be used in Lithuania “asked the MEP. that Lithuania expects to receive up to 6.3 billion from said fund. of which up to 2,400 million. will be received as non-refundable grants.

And the EU expects these funds to be used wisely and responsibly in all countries.

“Unfortunately, it is only possible to speculate on how the Government prepared such a plan, because there was no public debate in Lithuania on the use of these unique opportunities. The government answers all questions about future investments by referring to the so-called“ DNA Plan for the future of the economy “, in which the only thing valuable is the name that sounds modern. But the content is completely outdated and not strategic,” said the politician.

A. Kubilius wrote that next year 811.1 million will be received and used from this fund. This is one third of the funds provided to Lithuania by the EU Recovery Fund in the form of grants.

For this reason, the plan drawn up by the Government in these matters is of special strategic importance: either we will finally use the funds that suddenly arrived in Lithuania in an intelligent and thoughtful way, or it will be as always: “we wanted better, but we left as usual” , reason.

The former head of TS-LKD wrote that now the most important concern should be to develop urgently, but in discussion, a truly strategic investment plan for these billions of the Recovery Fund.

“I would like the new government and all of Lithuania to survive the hangover left by the former in the least painful way. And do not fall into the temptation of being treated for a painful hangover at the same time that we are now suffering the painful consequences of spending, “said the politician on Facebook.

“Therefore, I would like the future government to immediately change the budget rules, so that even in the case of the second wave of the pandemic, there would be no temptation to divide millions and billions from left to right without the approval of the Seimas and change the budget, “Kubilius wrote.