CER | Pension reforms fuel opposition in Lithuania

News from
Lithuania
All the important news
since 1 December 2000
Inga Pavlovaitė

Government pension reform fuels opposition

This week, the government proposed to the Seimas to amend the pensions law that provides only the basic pension of LTL (Lithuanian litas) 138 to working pensioners. In response, the left-wing Seimas opposition threatened a vote of no-confidence against Social Minister Vilija Blinkeviciutė, who is also the only female minister in the cabinet. They accuse her of neglecting the interests of pensioners and having a mechanical approach to social problems.

The reforms, they claim, will only aggravate the situation of pensioners, noting that earlier governments pledged to guarantee up to LTL 645. The charges were also made in connection with the violation of pensioners' constitutional rights, prompting the opposition to promise to go as far as the European Court of Human Rights in Strasbourg. The left-wing opposition's accusations were supported by the right-wing Conservatives, who announced that the changes are too drastic and insensitive. The amendments do not enjoy the full support of the ruling coalition either, with the Liberal Union split over the reforms and the New Alliance standing behind the minister.

Statistics show that about 16 per cent of pensioners work presently and number about 125,000. Government officials claim that, together with other changes, this reform will save about LTL 125 million for debt-ridden state social insurance fund SoDra. At the moment, the budget deficit of SoDra is about LTL 500 million and officials worry about a possible collapse by the summer of 2001. Minister Blinkeviciutė has expressed her concern about pensioners, but also about the late pensions and the shortage of money to pay them. She regretted that the politicians lack courage for painful but necessary changes in the state social security system. Seimas Chairman Artūras Paulauskas put it very clearly: "either reform now, or SoDra goes bankrupt in a few months."

Chief negotiator for the EU sacked

Vygaudas Ušackas, Lithuania's chief negotiator with the EU, lost his job when Foreign Minister Antanas Valionis said late this week that he is no longer needed. Valionis also announced that Vygaudas Ušackas is probably going to work as an ambassador in an important country, most likely the USA.

He is expected to leave his present position as soon as the government confirms the three remaining negotiations positions with the EU. He also declined to serve as the head of the European committee that supervises the country's preparation for EU membership, saying that he is not able to work efficiently in the committee without being the deputy foreign minister.

Futile attempts to influence the monopolist

After Lietuvos Telekomas announced a sharp rise in tariffs for the coming year, leading politicians were trying to reverse the decision of the telecommunications monopoly, one which will retain its dominant position until 2003.

Prime Minister Rolandas Paksas tried in vain to persuade the chief executive of the company to alleviate the situation, while Seimas Chairman Artūras Paulauskas attempted to work through the Finnish Embassy, since the owners of Lietuvos Telekomas include Finnish-owned consortium Amber Teleholding. Finnish Ambassador Rauno Viemerö responded that Lietuvos Telekomas is acting according to an agreement with the state and cannot change its decision to increase tariffs.

Ruling coalition reach compromise

After a controversial law on education financing was proposed by Vilnius University rector and Seimas Education Committee Chairman Rolandas Pavilionis to increase education spending to 1.5 per cent of GDP, this week saw a compromise within the ruling coalition to reduce education spending to 1.35 per cent of overall GDP, which allows all sides to claim victory. Pavilionis, stepping back from his earlier uncompromising position, said that the deal satisfies politicians and the academic community alike.

The leader of the Liberal Union's parliamentary faction, Dalia Kutraitė-Giedratienė, remarked that the compromise is a good initiative and an example of how to find solutions within the ruling coalition. She also expressed her joy in managing to surpass a pre-electoral promise given to the rectors of universities to spend 1.3 per cent of GDP on education.

Changes in state railway?

The government approved a new executive council for problem-ridden state-owned Lietuvos Geležinkeliai (Lithuanian Railways). However, it seems that individuals who were in charge before are making a comeback. For example, Jonas Biržiškis, ex-transport minister from 1990 to 1997, was appointed to the council and is considered the most likely candidate for the new chief executive position. During his time in the ministry, Biržiškis was involved in several scandals over dubious acquisitions.

Lietuvos Geležinkeliai is expected to make losses this year, as Russia increased tariffs for transporting in its territory by 1.6-fold. Consequently, the volume of transactions by rail was down about 0.5 per cent and, although the estimated profit for a year is about LTL ten million, it is expected to go entirely to road construction.

BSE panic reaches Lithuania

Starting 1 December, Lithuania banned any import items made of meat, blood or bones from cows. This is in response to Europe-wide concern about BSE, or Mad Cow disease, that was highlighted this week by the meeting of EU officials. Lithuanian officials fear that the country, not being a member of the Union, could be an attractive place to dump the unused material that is estimated in the hundreds of tonnes.

So far, no cases of BSE have been registered in Lithuania, but the fears are that cows bought in Germany in 1998-99 might have been infected since the disease has been found in the regions where the cows originated. Veterinary advice says to buy cows only in Scandinavia and calls for establishing a compensation system for farmers with infected cows; otherwise BSE will be kept secret by farmers fearing financial loss. As it stands, the ban allows import only from Finland, Sweden and Eastern Europe.

And in other news...

Antanas Klimavičius, nominated to become prosecutor-general by the president, was presented to the Seimas. So far, he has served as a head of a special task force.
The government announced its privatisation plans for the electricity sector to be carried out in eight months.
On 1 December, the official unemployment figure climbed to 12.1 per cent.
One month after the seizure of the Lithuanian vessel, Rytas, in Guinea-Bissau, the Foreign Ministry announced that it will create a permanent representative in Africa and send high-ranking diplomatic representatives to free the crew. The Embassy Guinea-Bissau in Washington has been subject to protests by Washingtonians.
Šiauliai airport was finally declared a civilian asset after the Defence Ministry said it was not useful for military purposes.
Grassroots members of the Social Democratic Party publicly voiced opposition to its leaders about plans to merge with the Democratic Labour Party (LDDP).
The 75th anniversary of Lithuanian Ballet was marked by a five-hour concert at the National Opera and Ballet Theatre.

Exchange Rates As of 7 December 2000
Currency	Currency Lithuanian litas (LTL)
1 US dollar	4.00
1 British pound	5.78
1 German mark	1.82
1 euro	3.55

Inga Pavlovaitė, 7 December 2000

Moving on:

Sources:

Lietuvos Rytas
Lietuvos Aidas
Respublika
Baltic News Service (BNS)
Kauno Diena
ELTA
Politika.lt