Visits

Working visit by President Dalia Grybauskaitė to the European Council, Brussels, 1-2 March 2012

Prior to the European Council meeting, President Dalia Grybauskaitė chaired the NB6 meeting which following the Nordic-Baltic cooperation tradition focused on discussing and reconciling the positions on the EU-related matters that were of foremost importance for the region. The participants of the meeting discussed the items on the agenda of the European Council summit: the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, the priorities of the European Union economic policy, the appointment of the European Council President, and the granting of EU candidate status to Serbia.

President Dalia Grybauskaitė underlined that although most of the Nordic-Baltic countries were not members of the euro zone, yet they expressed unanimous support for the provisions of the new European Treaty requiring to observe strict fiscal discipline, avoid financial populism, and deal with finances in responsible manner.

"Nordic-Baltic countries have no debt-related problems and are already demonstrating responsible approach to their finances. Our countries understand perfectly that a new treaty serves the interest of the whole Europe. The provisions of the treaty calling for strict fiscal discipline, when embedded in national laws, will curb the way to any irresponsible wasting as well as will help to prevent crises in the future," the President said.

In the Nordic-Baltic region, only Finland and Estonia have adopted the euro as their currency.

According to Dalia Grybauskaitė, intensive cooperation of Nordic and Baltic countries contributes to achieving the results that are important for the whole region.

The Nordic-Baltic Six - Denmark, Sweden, Finland, Lithuania, Latvia and Estonia - is based on common priorities which include promoting successful economic development across the region, enhancing defence and energy security, and ensuring the wellbeing of people. Therefore, the leaders of these countries meet in traditional NB6 meetings to reconcile their interests and positions on key EU-related matters.

The Nordic-Baltic countries also cooperate actively on extended format with non-EU member states Norway and Iceland.

In 2012, Lithuania coordinates the Nordic-Baltic cooperation. The President has invited the Nordic-Baltic leaders to the summit scheduled for April in Vilnius.

The European Council meeting, which was attended by President of the Republic of Lithuania Dalia Grybauskaitė, approved the priorities of economic policy in 2012.

To achieve quicker recovery and growth of the EU economy, this year all countries should pool their efforts to ensure financial discipline, revival of business loans, boosting of economic growth and jobs, modernization of public administration.

All EU member states will be obliged to comply with these priorities when planning their economic policies and budgets as well as developing national reform and convergence programmes. The European Commission will assess these programmes and provide country-specific recommendations as appropriate.

"Fiscal discipline is a protector for the future. However, the primary concern for the people of Lithuania and Europe as a whole is how we live today. The priorities approved by the European Council are orientations for the governments of each country to the objectives they should focus on," the President underlined.

The European Council also discussed the macroeconomic situation of EU member states. The European Commission has indicated twelve countries where situation is to be observed more closely. Lithuania is not among these countries. However, according to the President, we have to continue abiding by the underlying rule - to live within our means and ensure sustainable growth of economy.

According to the President, the situation differs between countries in the European Union, therefore different strategies, though based on the same approach, will have to be pursued. Lithuania will have to exert greater effort and perform better in the fields of investment and reduction of unemployment.

Lithuania's government will also have to find effective measures to improve business environment, restructure the pension scheme, ensure the collection of taxes, and reduce the administrative burdens which pose obstacles to new business opportunities. Among key priorities in reducing unemployment should be youth employment as young people are those who have been most severely affected by the recession.

The heads of European Union countries re-elected Herman Van Rompuy as European Council President for a second mandate of 2.5 years. He will also chair the euro summits. Tomorrow, President Dalia Grybauskaitė will participate in the signing of the new Treaty on Stability, Coordination and Governance in the Economic and Monetary Union which gets support from most EU countries.

On the second day of her visit in Brussels, President Dalia Grybauskaitė together with other 24 heads of state or government of the euro area member states signed the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union which imposed an obligation on European countries to observe strict fiscal discipline and pursue a responsible economic policy.

Though the Treaty is binding on the euro area it has been acceded to by all EU countries, except the United Kingdom and the Czech Republic. The fundamental rule of the Treaty, the so-called golden rule, will obligate the member states to seek that their budget is balanced or in surplus (with the annual structural deficit not exceeding 0.5 % of the gross domestic product at market prices). This rule is to be transposed into national legal systems.

According to the President, once provisions concerning fiscal discipline take effect in national laws they will prevent irresponsible politicians from wasting and irresponsible dealing with their country's finances.

Dalia Grybauskaitė said that Europe, by signing the Treaty, expressed its strong political will to deal with finances in responsible manner sending a clear message to international financial markets that the policy it pursues can be trusted.

"The Treaty's importance for Europe is strategic and long-term. Fiscal discipline becomes not a declaration but a legal commitment of each contracting party. This is a serious signal for international markets and a guarantee of economic stability. Lithuania is truly determined to abide by the underlying principles as it is already doing, likewise the whole Baltic and Scandinavian region. This is our philosophy and a responsible approach of all Nordic-Baltic countries to their economies," the President said before signing the Treaty.

The contracting parties pledge to discuss and, if necessary, coordinate ex ante the intended major reforms. They will also be obliged to report of their debt issuance plans.

The Treaty also provides for informal Euro Summit meetings twice a year. The contracting parties other than euro area countries, which have ratified this Treaty, will be invited to such meetings at least once a year.

The Treaty will enter into force on 1 January 2013, following the deposit by twelve contracting parties whose currency is the euro of their instrument of ratification. The contracting parties other than euro zone countries will have to declare of their intention to be bound by all or part of the provisions before adoption of the euro. Their decision will have to be declared during ratification of the Treaty.

According to the President, while singing this Treaty now Lithuania declares its strong political will to observe fiscal discipline.

Press Service of the President