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Lithuanian PM: euro adoption marks beginning of new era

BC, Vilnius, 29.12.2014.Print version
Prime Minister of Lithuania Algirdas Butkevicius will celebrate the New Year in a distinct manner, when the clock strikes twelve he will withdraw the first Lithuanian euro banknotes from an ATM. The ceremony will mark the beginning of the new era as on 1 January Lithuania joins the euro area. The leader of the Social Democratic Party, Prime Minister Algirdas Butkevicius assured ELTA news agency journalist Jadvyga Bieliavska that the euro adoption will be beneficial for businesses, consumers and Lithuania on the whole, cites LETA.

"I am sure that the new currency will make us even stronger, both economically and politically," the head of the Government stated.

 

Butkevicius, who is leading in opinion polls, is pleased that his Government made decisions in 2014 which will improve people's social and financial situation, that preparation for the euro adoption was completed as was the construction of the liquefied natural gas (LNG) terminal.

 

Butkevicius who has ambitious plans for 2015 predicts that the upcoming year will not be easy because of the set objectives and due to the changes in the geopolitical situation. On the eve of the New Year the prime minister wished people more optimism, unity and sincerity.

 

- Although Christmas already passed, I would like to ask you how significant is this religious holiday for you and your family?

 

- Christmas Eve and Christmas are one of the most lovely holidays of the year, which gained a new meaning after our granddaughter Kamile was born. I was raised in a catholic family and Christmas was an important celebration. On Christmas Eve we used to gather at a dinner table covered in a white cloth, while twelve meals was a must. My wife Janina and I have maintained this tradition in our family. It is most important that I can spend time with my loved ones and I savour such moments.

 

- Does Santa Claus visit Turniskes (the PM's residence), how does he please the prime minister and his family?

 

- We exchange symbolic gifts, the greatest of which is spending time together. Probably most Lithuanians follow this tradition.

 

- The end of the year is a great opportunity to summarise the tasks completed throughout the year. In your opinion, what decisions made in 2014 by your Government are the most important to Lithuania and its people?

 

 

- This year the Government reached the half way of its tasks. In two years we made decisions directly affecting social and financial situation of Lithuanians. In the fourth quarter of 2014 we started compensating pensions that were reduced during the crisis. A total of approximately LTL 450 million (EUR 130 million) will be required by 2017 for the compensation of pensions. A decision was made to increase old-age pension by LTL 16-17 (EUR 4.6-4.9) on average starting July 2015. The minimum monthly salary was increased in January 2013 by LTL 150 (EUR 43.5) to LTL 1,000 (EUR 290). From October 2014 it grew by another LTL 35 (EUR 10) to LTL 1,035 (EUR 300). From January 2014 non-taxable income rate was raised from LTL 470 (EUR 136) to LTL 570 (EUR 165) per month.

 

Real wage in Lithuania has grown by 4.6% per year. The number of working people increased by 29,900, or 2.6%. The number of public sector employees decreased by 1.2%, while the number of private sector employees increased by 4.6%. The number of employed people jumped up by as much as 3.1% – the highest increase in 10 years. On 1 March 2015 salaries of the lowest earning budgetary institution employees will grow. Salaries of cultural employees were increased. More funding was allocated for education. After a four year break, education vouchers were raised by LTL 38 (EUR 11), from LTL 3,310 (EUR 959) to LTL 3,348 (EUR 970) in 2014. In 2015 education vouchers are planned to be increased by another LTL 32 (EUR 9.3).

 

LTL 33 million (EUR 9.6 million) will be allocated for the increase of pre-primary and pre-school teachers' salaries by around 10%.

 

We are pleased with the successful renovation programme of blocks of flats. We are ready for the euro adoption, which will improve security in economic and political sense. We have amended the Law on Territorial Planning and reduced the bureaucratic burden on business.

 

This year we have faced unprecedented challenges due to Russia-Ukraine conflict and had to undertake prompt measures to find new markets and allocate additional funding for defence. In 2014 defensive funding was increased by as much as LTL 130 million (EUR 38 million). Meanwhile, in 2015 defensive budget will grow even more, by LTL 400 million (EUR 116 million).

 

- In 2014 Klaipeda LNG terminal construction was completed and it opened for operation. What projects await next year?

 

- We are pleased that the construction of the terminal was completed in such a short time. Lithuania will be able to participate in international gas market, the terminal will become a safeguard ensuring a certain "ceiling" for the Russian gas price.

 

Lithuania-Poland gas pipeline NordBalt and electricity link LitPol Link are being implemented successfully. They should be completed by the end of 2015.

 

Talking about the energy sector, Government acquired controlling interest in AB Amber Grid enabling Lithuania to fully implement the Third EU Energy Package.

 

In addition, as you know, successful negotiation with Gazprom enabled to reduce the gas price to consumers. In a couple of years we reduced the electricity price twice. Household consumers see the changes in their bills for gas and electricity.

 

- What activity priorities the Government has foreseen for 2015?

 

- We will continue combating underground economy, we will implement the smart tax administration system that will not only promote transparent payment of taxes but will allow businesses to save money.

 

We intend to devote more attention to promote remigration. In 2013 the number of re-emigrants increased by 9.3%. By 9.2% more Lithuanians returned in January-October 2014 year-on-year. Next year, the Migration Information Centre will be launched.

 

The upcoming year will not be easy due to our goals and changes in the geopolitical situation, due to which farmers incur losses. Coordinated efforts by the government, diplomats and businessmen bring great results to shifting export geography. However, in order to survive in the highly competitive environment our farmers and companies have to cooperate. The Ministry of Agriculture must prepare draft amendments that would eliminate hurdles for cooperation and instead promote diverse cooperation.

 

We will seek to use the intellectual potential more effectively, to faster develop the creation of innovative production and technology as these are the most demanded goods in the international market and a reliable measure to enhance competitiveness.

 

- Based on the polls, the Social Democratic Party is a popular party, people want to see you in the prime minister's seat. Will high ratings bring luck to the Social Democratic Party in the municipal elections of 1 March 2015, in which mayors will be elected directly for the first time?

 

- It is pleasing that the public opinion about the work of social democrats is positive. However, I never give prominence to ratings as they tend to change. It is crucial not to spare effort to fulfil commitments to people. I believe that voters see our efforts and will vote in the upcoming election.

 

- In 2015 the euro will be introduced. Have you already purchased a new wallet?

 

- I often pay by card, so I do not look for a wallet specifically for banknotes (laughing). Still, the first months after the New Year will be different both for me and every Lithuanian resident – we will have to adapt to the new currency. But I believe that the adoption of the euro will be beneficial for businesses, consumers and Lithuania.

 

- In 2015 Lithuania will mark the 25th anniversary of independence. What would you wish Lithuania?

 

- We have grown in 25 years, we have become economically stronger. We were seeking for recognition in international arena and achieved this by our hard work. Now more optimism is needed. We must not to look back, but move forward. I wish Lithuanians unity, sincerity and support for each other because we may achieve our goals in the next 25 years and be happier only by being united.

 

- How do you plan to celebrate the New Year?

 

- This time the New Years celebration will be exceptional, we will celebrate together with guests from the neighbouring Baltic countries. Lithuania will attain worldwide attention, when the clock strikes twelve we will symbolically withdraw the first Lithuanian euro banknotes. The ceremony will mark the new era, from 1 January Lithuania becomes a member of the euro club. I believe the new currency will make us stronger both economically and politically.

 

- Thank you for your time.

 

The interview was conducted by ELTA news agency correspondent Jadvyga Bieliavska.






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