The US financial crisis and global ripple effects, including the EU and Lithuania, have been among major issues discussed between Prime Minister Gediminas Kirkilas and EU Commissioner responsible for Economic and Monetary Affairs Joaquin Almunia in their meeting earlier today.

The US financial crisis and global ripple effects, including the EU and Lithuania, have been among major issues discussed between Prime Minister Gediminas Kirkilas and EU Commissioner responsible for Economic and Monetary Affairs Joaquin Almunia in their meeting earlier today. The Commissioner has said it would have an impact on EU finances and economy. Almunia underlined that Lithuania, though under a less impact, will still have to face the consequences. Therefore, the Commissioner pointed out a special necessity to adhere to fiscal discipline and reduce budget deficit.

 

Almunia has expressed his concern as regards Seimas’ inflation-driving-decisions such as VAT incentives and salary indexation, adding that we are in for a deeper budget deficit if no adequate measures are applied.

Prime Minister Kirkilas has underlined that the Government is dedicated to adhere to fiscal discipline and informed the Commissioner on special 2009 budget formation principles affected by future elections to the Seimas. Furthermore, the Prime Minster has added that the Government will propose 5% reduction in state running costs and no increase in civil servant salaries for next year budget.

Among other items discussed in Prime Minister’s meeting with the Commissioner, were post decommissioning of Ignalina NPP and Lithuania’s inevitable dependence on sole supplier, as well as energy efficiency projects, including housing renovation. Joaquin Almunia has promised extra support for the project in Lithuania. The counterparts have discussed other possibilities to advance housing improvement project, including EU Jessica programme (financial engineering for urban development).