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“We don’t have to be intimidated by this level because we understand why it arose. It is necessary to help our economy survive, ”he told a meeting of the Seimas Budget and Finance Committee on Wednesday.
According to the Bank of Lithuania, at the end of 2020, the general government debt amounted to LTL 24.8 billion. EUR or almost 51%. gross domestic product.
After the question and answer session, the committee members unanimously approved the candidacy of G. Šimkus.
At the meeting, G. Šimkus also said that it is very important for Lithuania to make the most of the current pandemic situation.
“There are funds from the Recovery and Resilience Fund (RRF) of the European Union, which are being invested, creating potential for the economic growth of the country. Through this, we will create the conditions to reduce that debt. It is very important to have a plan of how the move will be made, what are the intermediate and final goals in the works to reduce public debt, “he said.
G. Šimkus also pointed out that even the current level of Lithuania’s debt does not meet the so-called Maastricht criterion (60% of GDP).
“It is smaller than in other eurozone countries,” he said.
Grow existing players
G. Šimkus commented that the concentration in the banking sector could be reduced by increasing the smaller players that already operate.
“Despite all expectations, this reduction in concentration has not been achieved. I think if we talk about that, we shouldn’t just talk about new entrants. They have arisen: with the possibility of a specialized bank, we have new banks, we have branches of existing foreign banks, there are old participants.
Often, our language consists of four main actors, but there are 17 branches of banks and foreign banks in Lithuania, two centrals and more than 60 credit unions, which are credit institutions. We need to talk not only about the arrival of new ones, but also about the cultivation of those who are already with us.
For example, the cooperative banking sector has potential, ”he said.
The Seimas should consider the candidacy of G. Šimkus on Thursday. Subsequently, the parliamentarians will vote secretly on their appointment. The Chairman of the Board of Directors of the Bank of Lithuania is appointed for a period of five years.
G. Šimkus has been working at the Bank of Lithuania since 2002 and during 18 years of work at this institution he has steadily moved up the career ladder. He has been a member of the Board since September 2020. The term of the current central bank director, Vito Vasiliauskas, ends on April 7.
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