What Is Happening with Money and Prices?
The 20th anniversary of the euro was marked by an increase in price inflation. In the euro area, annual consumer price inflation reached 5% in December 2021. Lithuania recorded the highest rate of 11%.
The Problematic Lithuanian Pension System
Forced solidarity creates a contradiction – the working class taking care of themselves seems to oppose the interests of the pensioners, while helping the pensioners more would result in a greater burden on the workers. The pursuit of solidarity leads to a conflict of interests.
Freedom that Liberates and Freedom that Binds
It would seem that freedom unites people, gives them a sense of community and a common denominator. However, freedom may embrace many incompatible things. If we truly wish to be free, we must be able to differentiate between the concepts of liberating freedom and binding freedom.
Government’s Invincible Routine
A multitude of research shows that the shadow economy in Lithuania is decreasing. Yet, the pace of change is not as fast as desired. The level of the shadow economy remains high and there are still plenty of reasons for this kind of economic activity to emerge.
Cash Payment Restrictions? No Solution to Shadow Economy
Cash payment restrictions would increase individual and corporate expenses and would cause payment inconveniences. How would one be expected to make larger payments at weekends when interbank transfers are not made? A forced „banking“ of cash reduces competition among payments methods.
Distorted World of Cheap Money
A few weeks ago, the Fed expressed no intention to increase interest rates, but the will to maintain the current ones of 0 to 0.25%. The problem is that cheap money does not only indicate the prevailing economic problems, but imply long-term negative impact on both savers and economy.
Greece Has Not Done Its Homework
The Greeks do not understand the imperative need for the reforms. Nor are they ready to reform. With the external pressure of the EU and other international institutions being the only reason to institute reforms, it is hard to expect any breakthrough. And this is the key problem.
Does Lithuania Have Any Questions to ECB?
The chairman of the Central Bank of Lithuania will become a member the Governing Council of the European Central Bank, which is responsible for monetary policy for the euro area. Thus, if Lithuania wants to properly represent it‘s interests, it has to join the debate concerning decisions of the ECB.
Will the Euro Adoption Trigger Price Hikes?
Contrary to what Lithuania’s prime minister claims, discussions on euro introduction are far from over. They might be over for those who have had the task of convincing Lithuanians about the benefits of having the euro.
The Banking Union: Towards or Away from the Market?
The question is whether the new policies drive the banking sector closer to the market and market laws or, on the contrary, estrange it from them?
