The Lithuanians who are following all the news attentively should be lost completely. How to go on with our lives? How to plan the future? Who to believe in? Should we prepare for harder times after the summer and holidays or on the contrary – rush to the banks for new mortgages; buy, consume, build… Ramunė Sotvarė-Šemetienė wrote in ltr.lt, on 26 July.
President Dalia Grybauskaitė has mentioned a few times very clearly that a second wave of the crisis is inevitable. Lithuania is small and open. It’s impossible to distance oneself from what’s happening in the world, and the world is in a very bad mood, with poor expectations for the future.
Lithuania’s leader usually hits the bull’s-eye when it comes to evaluating economic perspectives. If some already forgot, let me remind you that, for example, she was the first to scold Gediminas Kirkilas’s Government. And that happened when everybody was living in the mortgage bubble illusion of eternal wellbeing. Frankly speaking, they didn’t really understand what the then Commissioner meant.
Now, Lithuanian industrialists, who used to be reluctant to confront politicians openly, have something to say. They stated that their research denied the comments of the politicians completely. There will be no second wave of the crisis.
If that wasn’t enough, they accused politicians of declaring a false alarm and unnecessary panic-mongering. And that’s serious business.
According to the Lithuanian Confederation of Industrialists, the increasing number of public negative comments could be one of the reasons why the citizens may have worse expectations and decide to save up more. In other words – pave the way for that dreaded second wave.
Let’s stop here for a while and ask a question: is the tendency or need of the Lithuanians to save so important and dangerous to major industrialists?
Until now, there was a firm belief that success or failure was determined mainly by the export markets. What is more, contemporary Lithuanians save in quite an intricate way. When they have enough money saved, they spend generously. A completely normal desire to live fancier opens wallets and purses really well. Thus an encouragement to save in most cases is seen as an encouragement not to take mortgages, and an encouragement to consume – not to be afraid to borrow.
Is the perspective so good that there’s no need to be afraid of the debt grip which showed all of its charms to businesses and everyday consumers, intoxicated with the vision of a better future, just free years ago?
I wasn’t convinced by the arguments enough to rush to the bank to get money for a new house.
Two thirds of companies forecast that the export will increase, one third is hoping for it. That’s not bad. But it all boils down to the actual number of export increase.
30% of industrialists are pretty certain that internal consumption will increase as well.
Their positive expectations are reflected by the wish to hire more employees and increase wages. These are great intentions. Should they be implemented, consumption that receives so much concern would definitely increase.
But again, just how many new jobs and what kind of increase in wages are we talking about? Only 3–4 companies out of 10 have such plans. And that’s good. But making them happen would be even better. Though doing so hardly can revolutionize the labour market and the lives of consumers.
If we had 100% of employers ready to implement changes that would be a completely different story. Then we could speak about favourable winds blowing the crisis from the skies of Lithuania for good.
What’s more interesting is that the confederation voiced such brave summaries and even accusations when speaking about a short-term (just a few quarters) perspective. And what will the situation be next year?
Chances are, this year the industrialists will be right, next year – the President.
In any case, the current situation is very reminiscent of that 4–5 years ago. Then the world was troubled too. In Lithuania – on the contrary. Calm and peaceful. Till the very last minute we supported the belief in the good of greater, even excessive, consumerism.
And then all hell broke loose. But this time we are a little bit more prepared. And yet, if a miracle happens and the second wave passes us by, if we manage to survive it without much losses, still it’s better to be safe than sorry.