Bloomberg News

Lithuanian Coalition Split on Budget Delays Approval at Meeting

October 12, 2011

Oct. 12 (Bloomberg) -- Two of Lithuania’s three coalition parties opposed the 2012 budget plan in government talks today, delaying its approval as an Oct. 17 deadline looms.

The Liberal and Center Union and the Liberal Movement oppose the Finance Ministry’s plan to cut financing for ministries by 300 million litai ($119 million), the parties said in a press conference in Vilnius.

“It’s not normal” to further deepen the austerity burden on public employees such as teachers and doctors at a time when the government plans to raise pensions to levels last seen before the global financial crisis, said Transport Minister Eligijus Masiulis, head of the Liberal Movement. Masiulis called for “more solidarity” in sharing the burden and a delay in the pension increases until the second quarter of 2012.

The Baltic nation’s government aims to cut the budget shortfall to 2.8 percent of gross domestic product next year by cutting financing for ministries and raising more revenue from state-owned companies. The government must submit the draft to parliament by Oct. 17.

The coalition agreed on the 2.8 percent budget target, even though discussions continue on how to achieve it, Prime Minister Andrius Kubilius said.

The government is “prepared to respond” with additional budget measures for 2012 should the European sovereign-credit crisis deteriorate in November and December, Kubilius said.

--Editors: Alan Crosby, James M. Gomez

To contact the reporter on this story: Milda Seputyte in Vilnius at mseputyte@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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