BNS: Almunia warns Lithuania on budget deficit
Updated 2008-10-01
VILNIUS, Sep 25, BNS - Joaquin Almunia, the EU commissioner responsible for economic and monetary affairs, on Thursday warned Lithuania that its 2009 budget deficit could exceed 3 percent unless the government tookcertain decisions.
However, Lithuanian Prime Minister Gediminas Kirkilas said that he was confident that such a scenario would not occur. "Lithuania will not exceed the 3 percent limit, even under the worst forecasts," Kirkilas said during a joint news conference with Almunia in Vilnius.
The prime minister said that the government's proposals to cut spending on public administration by 5 percent and to freeze the salaries of the highest-paid employees of budget-funded institutions in 2009 would prevent the budget deficit from breaching this limit.
Almunia also expressed his concern over the Lithuanian parliament's decisions regarding taxes and minimum wages, and on indexing of social benefits to inflation, saying that these measures would not help curb inflation and improve tax collection.
The commissioner apparently referred to a VAT reduction on fresh on fruits and vegetables to be introduced next year.
