THE VOICE OF INTERNATIONAL LITHUANIA
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I want to tell you a true story. During a trip to Lithuania a few years ago, I drove to the city of Siauliai to see my grandmother’s sister before she died. At 97 she was the oldest surviving member of my family.
My reason for visiting her was not only selfish, but it was based on an illusion…
But the present Icelandic government has, nevertheless, something important to teach the eurozone, according to an Icelandic economics professor.
While droves of businesses have had to close its doors in Euro cities like Rome and Athens, the business community in Reykjavik avoided mass death. But it could have gone differently, says economics professor Thórólfur Matthíasson at the University of Iceland.
Eythor Edvardsson Well, the fact is that we read more in foreign media about the success and progress of the leaving government than in the Icelandic ones. Government failed to protect the homes from the collapse, home loans have increased 40-50% since 2008 which has in many cases exceeded home values. People who owned f.o.e. 50% equity before crisis have nothing now. But the ones who had savings in banks, government protected.
Elections now were won mainly by the party who made a promise to correct the home loan situation. Whether they will manage or not will be interesting to see but they are mainly looking towards finding the money to do so by taxing the funds and investors who took over the fallen banks in Iceland who already are making billions ISK profit.
Government who fell 2008 was blamed for collapse, crisis and whatever went wrong. However, after a research and being taken to court as PM of that government had to face, nothing came out of it and he only guilty of not informing his fellow ministers good enough in the roughest times.
Our welfare party who claims they did great in the last four years got 56.000 votes in election 2009. Now, they got 26.000 votes. Tells alot about how the people see the great work the world believes they did...
Eythor Edvardsson What Lithuania can learn from it is hard to see. Iceland has its own currency that lost a great value helping our export greatly. Iceland's economy stands on several pollars. Fish industry, Energy industry, great hugely growing tourism, agriculture, IT etc.
Our population with only 320. 000 people ( with Lithuanians as our third nation in Iceland) gives flexibility.
I believe that Lithuania did great already in the recession with the "Inner devaluation". With a currency pegged to the EURO, it's hands were tightened. But with dealing with the situation by "tightening the belt by two holes" for the Lithuanian nation, they will
come out of the crisis stronger. Until, the LT economy might not be so "sexy" but will make the country more attractive for investors around the world.
LT should use these times and emphasise on increasing the quality of education in LT. After all, LT does have two times more of people with higher education than the average European country does.
Education and Culture are the key words for LT from my point of view into the future.
Sorry to disappoint!
What happened is only a blip on the screen:)Who cares about the blips:) Actually, they only mislead people!
I TOLD YOU SO LONG AGO!
But I hope for a miracle as everybody does, good luck to us:)
But seriously, contrary to Prof. Prof. Reinhart & Rogoff (both at Harvard, now they admit that their econometric model was wrong!), government deficit spending, pursued judiciously, remains the single most effective tool societies have to fight against mass unemployment caused by severe recessions (60% youth unemployed in Europe in 2013!).
Too deep austerity in the EU imposed horrible costs on the societies (esp. middle class) and will actually substantially increase the public debt of deep austerity countries (like LT) because, as a result of austerity, the output has dropped horrendously (some 22-25%) and now growing in some countries (e.g. LT) only very slowly, compared to similar development level countries (China, other Asia).
The GDP will take more than a decade to return to the pre-austerity level (sic!).
I TOLD YOU SO LONG AGO!
Seeing that, young, entrepreneurial and productive people have been emigrating in droves, very big loss to LT!
Valdas Samonis, PhD, CPC
The Web Professor of Global Management(SM)
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