Mindaugas Sinkevičius: municipalities are already forced to borrow because they do not implement budgets

In an interview with Delfi, the mayor of the Jonava district spoke about the state of mind of entrepreneurs in the regions today. “At least in my area, we still haven’t heard that this will lead to mass layoffs or closings,” he said.

Sinkevičius also evaluated government measures to stimulate the economy. “Now is not Christmas,” he said. “What concerns us most is how we live in 2021 and 2022.”

– There were 9 confirmed cases of coronavirus in the Jonava district, all of them recovered. What is your attitude towards the quarantine measures in Lithuania? Do we have a fairly well-managed situation because of them or were they excessive?

– The measures were appropriate and implemented on time, so we have a situation that we are not ashamed to say. The number of sick emigrants and even anapiline, compared to other countries, shows that we are doing well.

Clearly, there are hypotheses from critics who say that we are a sparsely populated country that would have existed if we had done nothing. I am not a supporter of such languages. I support those who think that a timely, perhaps harsh, reaction has paid off.

One was carried out by the government, but the municipalities themselves took additional measures. During the first weeks of quarantine, children’s playgrounds were closed with restraint straps, basketball hoops were twisted, and stair disinfection began.

– What are you waiting for now? Do I need to cancel the quarantine now?

– I support prolonged mitigation over time. This is not the case where the quarantine has been introduced since March 16 and then one day it has already been lifted. Returning to a normal life would be a better way to do it. God forbid yet, but the situation may worsen.

Of course, the mood is twofold. Most of the life and celebrations of the city will not take place or will take place in very different ways. Jonavai cares about Joninė, which will be symbolic or will not happen. Klaipeda is probably interested in the Festival of the Sea, which is also unclear in what form it will take place.

In Jonava and other cities, life boils in the summer, it will adjust. Even layoffs, for example, for outdoor events with 300 participants, don’t change much. After all, it will practically not open and will start counting and will not tell 301 to come home.

Municipalities will probably take the easier path and avoid doing anything because they will not be able to control a group of 300 people. But it is better to get out of the situation safely than to suddenly say that everything is a situation in the past.

But it will cost us all. Not only through a psychological state, but also through finances. Our cafes and event organizers will suffer. We are already seeing this through the implementation of the budget revenue plan, through the number of companies requesting help.

– What is the state of mind of entrepreneurs in the regions?

– Some saw a niche, for example, they started transporting food home because the big ones could no longer cope with the increase in the volume of requests. Clearly, the small and medium-sized companies, which had to suspend their activities, such as hairdressers, restaurants, cafes, were the ones that suffered the most.

In Vilnius, it is customary to buy takeout or takeout food, but in the regions it was not a common practice.

However, at least in my area, we still haven’t heard that this will lead to layoffs or mass closings. Entrepreneurs turn. For example, in Jonava there is a bakery that bakes all kinds of cookies, gingerbread, sells at fairs, etc. They asked for an exemption from taxes that are in the hands of the municipality. Be that amount, EUR 900, we made that discount, thinking it was important to them.

– The measures to stimulate the central government economy can be divided into three stages, each on its own. The first was 257 euros in benefits for self-employed workers, downtime subsidies, Sodra tax inspection and deferrals, and funds distributed through Invega. How do you think they worked?

I have two feelings. When looking at public space, companies are more likely to say they couldn’t get it or that there were a lot of “paperwork” until they got something.

On the other hand, I know the owner of the cafe myself, who said he was “super”: he presented the document and obtained what he owned under Invega’s media quickly enough.

We, as local authorities, have also not received much dissatisfaction that nothing is happening. There were no such cases. We understand that small businesses may not have the capacity or the time, we were ready to help methodically.

In short, I think there were problems at first, but then we went in.

– The other part is the post-quarantine subsidies for jobs approved by the Seimas, benefits for job applicants and 200 euros for retirees, and more money for children. Now another president is proposing a temporary reduction in personal income tax. As you see?

– As a politician, be it at the local level, I consider that now is not Christmas. Everyone is trying to help businesses as much as possible, people and infrastructure are spending money. There is a desire to compete for who will be the best assistant: the Seimas, the Government or the President.

There are many initiatives, all with sums. For example, for infrastructure – 300 million. euros, some more, and after all, giving money to parents and pensioners. And if the GPM rate changes from July 1, it’s hundreds of millions more. Yes, it is probably necessary. An old age pensioner will probably find where those 200 euros are.

However, it is not clear to those who are thinking about not just this day, but a year or so. Debt is not a wound, it does not heal. They will have to be returned, but from what? We will have to reduce spending in the future or the economy will have to grow so much that we have reserves and loans.

– The last package of the Ministry of Finance: 6,300 million. euros for infrastructure, energy, etc. Have you read this plan?

– I have seen that there are different opinions. It is good that we were in a different situation before this virus than before the crisis of 2009. The health of the economy has been much better, and now it is good that the Government is working. I think it works better. Running fast is more important than counting a lot.

It is good that there is a plan, but we know from the same Ministry of Finance that the revenue of the GPM municipal budget in 2020 will reach 250 million. euros less. Some will lose their jobs, others will have their wages reduced and, as a result, will not be paid.

11 of the 60 municipalities have already requested the state treasury and loaned 25 million. short-term loans because you did not meet your budget income plan.

On the one hand, we are borrowing and trying to maintain the viability of the economy, but there are also austerity holes in the budget. We have a credible government, but what worries us most is how we will live in 2021 and 2022.

How much uncertainty the elections will bring to Seimas. Before the 2009 crisis and there were elections. We recall that the new government launched several reforms, cuts that worsened the situation. We do not want the political factor to further unbalance our economic boat.