Lithuania's Finance Ministry seeks to make Parliament commit to future fiscal discipline

The amendments to the Budgeting Law put forward by the ministry should oblige the parliament to approve deficit targets for a three-year period, the Verslo Žinios business daily reports.

“Now we hear in various discussions that public expenditures are too small, taxes are too high and debts are big. At the same time, everybody favors fiscal discipline and lower taxes. Hence all those figures should be put together and it is necessary to understand that there are revenues, expenditures, a gap if there is a shortage and the debt growing by the amount of that shortage since nobody has thought of a way to cover that shortage in other way,” Ingrida Šimonytė said in an interview to the daily.

With a three-year deficit plan endorsed, later budgets would be adopted taking those clear targets into account, she said.

“When looking at the year 2013, there are two options – either to leave the expenditures at this year’s level and have the deficit of this year, or, if the state wants to spend more, to raise taxes. Otherwise the law on fiscal discipline would be breached,” Šimonytė said.

The national budget of 2013 is expected to be deficit-free. Revenue projections had been estimated under the macroeconomic scenario, Šimonytė said adding that Sodra, the social security fund, was the only source of deficit in the public sector. However, the minister pledged that Sodra’s deficit would diminish consecutively and public finances should be balanced in 2015.