Prime Minister Andrius Kubilius and Finance Minister Ingrida Šimonyte were not lacking for advice this past year. Some propose putting out fires with gasoline – they argue that , in general, debt management is not required as it’s better to fight the crisis by borrowing more and increase spending. This spending is euphemistically called ” vagnoriškai” in support of business and consumer promotion.
Others consider a moderate, reasoned approach, why not take on one or two painful and unpopular measures which the Government is proposing to control the national debt.
Within this profusion of advice one finds a few problems. First – assembling all of the opinions together, the Government cannot apply even one of the proposed measures, starting with a real estate tax and ending with pension age modifications and a reduction of maternity benefits. Secondly, the “not to do” list is quite full, the “to do” list – empty.
This means those saying what “not to do” leave the dubious pleasure of filling out the “to do” list to the Government. This way the responsibility to make decisions that would prevent over borrowing at the expense of future generations is separated into “sayers” and “doers”. It’s not difficult to notice that the overwhelming number of “sayers” as compared to the “doers” is huge. It’s easier to just talk as it carries no responsibility and it’s healthier for ratings. But is it really?
For certain “sayers” the rest of the world does not exist – there is no world crisis, there is no crisis in Europe, there are no heated discussions in the international press about Spain, Greece, Portugal (and praise for the Baltic States for a responsible fiscal policy). There is also no The Economist article called “Is there life after debt?”. For these types of “sayers” the world has shrunk down into a crowded, rural run down tavern where evil bar wench Šimonyte no longer serves them cheap vodka. There is much holy rage in run down taverns regarding ”it was better in Lithuania before, now it is worse” with the natural conclusion – ”it has to be like it was before”.
It is understood and justified that a frail older woman wants prosperity now – it’s not her responsibility to know how the Government works and she has the right to require adequate social services. What is less understood and justified is when this is heard from the country’s men and women, who theoretically are required to understand how the economy and national finances work and they should as well understand why today is worse than yesterday and that living this way should not be. These “sayers” don’t live in the same world within which the German, Portugese, Italian, Great Britain and other parliaments one after another vote in difficult budget cuts which raise protests, demonstrations and even violence.
For some “sayers” it is practically impossible for them to say anything that, in their view, the voters don’t want to hear. The voters don’t want to hear about trimming of maternity leave benefits – understand we’re also against them. People are annoyed by vehicle taxes – understand, we’re “no way no how”. If we vote for these measures, during the next election the party candidate list will fit in the elevator. However, are these views correctly imagined and should the party’s little elevator be feared ? In Great Britain, Belgium and the Czech Republic voters voted for “doers”, not “sayers” – they voted for those who spoke in favor of saving money and living within their means.
And other “sayers” in their advice on “what not to do” simply send small interest groups or disguised small interest positions. Press magnate discussions regarding the debt control package is merely an opportunity to sanction VAT exemptions, otherwise it would be difficult for the press’s conscience and objectivity. The Constitutional Court, as always, makes operational decisions as to their compensation and those of other judges (now including pensions). These questions are again not decided on the behalf of the tax payer – but in their own interests. In response to criticism that the Constitutional Court is again interjecting itself into economic and financial decision making, one may receive a very “elegant” Lithuanian answer: “Of course you’re correct in that it’s not the work of the Judiciary to think about where money for its compensation should come from.”
For some other Seimas oppositionists – pensioner savings uproar is merely an opportunity to demand the return of the 70% squeezed out of their pension. This is more important than the guarantee that the average pensioner would receive their much smaller pension on time. Understand that the guarantees are the Governments problem – just give me mine. For certain police unions it’s the opportunity to remind that budget austerity is for others – otherwise we won’t provide security for the European Basketball Championship. There are other politicians who are particularly sensitive to ratings and every lost hundredth of a percentile dramatically changes their positions. The “do nothing” coalition is diverse, motivations are varied, the talking points as well and they are united by beautiful speeches, yet the actual doing basically distills into “I don’t want to know anything about the others, but I require this and this”.
Therefore life after the crisis and after debt continues – and the quality of life depends on how we behave. During his visit to Vilnius, European Commission President José Manuel Barroso recalled that during his time as Prime Minister of Portugal, he too had to implement “belt tightening” policies and he was accused at the time of not understanding that “there is life even after the budget”. Meanwhile, Gediminas Vagnorius cannot now boast that during the Russian crisis he did what was necessary – at the time he denied that there even was a crisis and hid in the bushes once denial became impossible. Those were the times of doing nothing and the failure of beautiful speeches – payrolls and pensions were paid late and later on painful decisions had to be made – similar to today. In the long run Barossa was rewarded – his policies were evaluated in Portugal and Europe. Having lost every election since 1988, Gediminas Vagnorius is now relegated to squeezing into politics via a back entrance – named the Christian party door.
Key policy choices remain the same. We can deny the threat and pass out populist prescriptions on how to heal the economy in a way that wouldn’t hurt – that we can cure appendicitis without an operation by saying “dear patient, if you don’t want the bitter pill – have this candy, instead of the syringe and scalpel – massage and the solarium, most important that there be no pain”. An honest doctor should be open with his patient” “the medicine is bitter, the injections painful, an operation is required, but I promise to put you back on your feet.”
A smooth talking faith healer differs from real doctors in that one can heal while the other cannot. That politicians could measure which is better – to fool yourself and your voters that pulling us out of the crisis can be achieved using pleasant and very pleasant means – or recall their responsibilities and do real work. When the patient regains health, the voters will vote for those who did the healing – not those who tried to mysteriously smooth talk you back to health – for the “doers”, not the “sayers”.
The text was published on Delfil.lt on 3 July
Translated by VG