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Lithuanian parliament debates 2013 budget without backing from coalition partners

Lietuvos BVP vienam gyventojui siekia 66 proc. ES vidurkio
Tomo Urbelionio/BFL nuotr. / Budget
Šaltinis: BNS
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Lithuania's draft 2013 budget is being debated at parliament practically without the backing from the Social Democratic Party's partners in the center-left ruling coalition: the Labor Party, the Order and Justice Party and the Electoral Action of Poles in Lithuania.

The Seimas decided to hold a final vote on the bill on Thursday, 20 December, with most of the votes in favor of the decision coming from the ruling Social Democrats and the opposition Conservatives and the Liberal Movement.

Parliament took the decision after a second reading of the draft budget, worked out by the former center-right government of Andrius Kubilius and minimally amended by the new Cabinet of Social Democratic Prime Minister Algirdas Butkevičius.

Seventy-three members of the Seimas voted in favor of putting the bill up for a final vote on Thursday, five voted against, and 48 abstained.

The Conservatives and Social Democrats unanimously voted in favor of having the final vote this week. Some Liberals voted in favor and others abstained from voting. Those abstained also included lawmakers from the Labor, the Order and Justice Party, and the Electoral Action of Poles, and the Path of Courage party.

Revision of tax revenue targets

Based on the latest macro-economic forecasts, Lithuania's new government proposes to lower next year's excise and value-added tax revenue targets, compared with the previous draft, but revise up estimates for revenues from dividends and the personal income tax, according to Finance Minister Rimantas Šadžius.

The excise revenue target is lowered by around 32 million litas (EUR 9.3m) "because this year's excise revenue collection is below the projected levels," the minister told lawmakers.

The VAT revenue target is cut by 64 million litas, but estimates for revenues from dividends and vehicle taxes are revised upwards. The personal income tax collection target could be raised by almost 166 million litas due to a planned increase in the minimum monthly wages, Šadžius says.

The central government's budget revenue estimate for 2013 is lowered by 400,000 litas compared with the previous draft, to 18.2 billion litas (excluding EU funds and other aid) and to 25.7 billion litas including EU assistance.

The central government budget for next year is planned with a deficit of 740 million litas, or 0.6 percent of the gross domestic product. The overall government deficit in 2013 is projected at around 2.5 percent of GDP. This year's budget aims to keep the deficit under 3 percent of GDP.

Prime Minister: "Emotions will calm"

Lithuanian Prime Minister Algirdas Butkevičius, the leader of the ruling Social Democrats, says he's convinced that the 2013 budget will be approved on Thursday despite of the confrontation among partners in the ruling coalition that erupted on Tuesday.

"Don't worry, everything will be fine. Emotions will calm, the grey matter will come back and the budget will be approved on Thursday," he told journalists at parliament on Tuesday in comment on the attempt of coalition partners to suspend the adoption of next year's budget.

Butkevičius said he had not spoken to coalition partners after the vote, pledging to speak to them later on Tuesday.

Asked whether the conduct of the Labor Party and other coalition partners could be related with the Social Democratic Party's decision to vote in support of lifting legal immunity of three members of the Labor Party, the prime minister said he hoped the two issues were not connected.

BNS
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