The following commentary by Ruta Vainiene was broadcast on the National Radio after the referendum on the EU took place in Latvia.
On September 20, a referendum on membership of the European Union took place in Latvia. Over 70 percent of the electorate participated in the referendum and 67 percent voted for EU membership. Being quite sceptical towards Europe, Latvia completed a marathon of referenda. On May 1 next year, the European Union will become an alliance of 25 states, Lithuania among them.
What thoughts are raised by the fact that we are becoming members of this alliance? What will we gain, what will we pay, and how will we live? Or what should we do to enjoy the advantages of the European Union without taking over its maladies?
All preparations Lithuania has been making with respect to EU integration until now can be viewed as doing homework. Those seeking to become EU members had to harmonise legal acts and prepare to open up borders for free movement of capital, goods and people. They had to get ready, but not yet belong to the Union. They had to summon all the potential and be ready at the start. Becoming members of the EU will actually take place on May 1, 2004. It will be then that the real test of the European Union will begin. It will be clear then whether we have done our homework properly. Whether we have accumulated potential and firmly stand at the start. However, some issues can be evaluated already now.
For instance, there is this question of whether we have developed sufficient competitive potential for an effective participation in the common market of the EU. The precondition of competitiveness is an ability to produce at a low cost, and low taxes is the key economic lever. What taxes are in Lithuania – high or low? Politicians have clashed heatedly over this issue of late. Some claim that taxes in Lithuania are no worse than those in Europe; others blame the former for lying. In my view, taxes in Lithuania are as high as in Europe, and that is a major problem. Lithuanian taxes do not provide a competitive advantage; they do not help to build potential. Taxpayer-friendly rules have been eliminated quite needlessly. And this was not for the will of the EU commissioners but by decisions of our national government.
It should be added that the parliament got cracking. It hastened to reduce taxes. But don’t get too excited – not for all industries, just for agricultural enterprises. It has been proposed to abolish the road tax, the corporate income tax, the real estate tax and the value added tax for these enterprises. And this is happening at the same time as Lithuania expects a hefty financial support from the EU for its agricultural sector. A support which is being criticized widely and fiercely in Europe itself for backing up the ineffectiveness in agriculture. This ineffectiveness is always paid expensively by all consumers and taxpayers. Sadly, we don’t accept this ineffectiveness, brought by Europe into the area of agricultural support, as an inevitable evil, nor we wait for essential changes in the EU’s common agricultural policy that are being nurtured at the moment. Instead, we double this evil with our decisions. We would be spoiling agriculture only with money, but now we will spoil it also by tax breaks. It will be entirely our own fault if we have evil square.
What conclusion can be drawn from our prospects in the EU? It’s that a fool is a fool. Either in the EU or in the USSR, there is no vaccine against stupidity or populism or, perhaps, the power of political interest. The EU will not rescue us, and our government will not take the trouble to do that either (they will mind just for their own good). So if we want a better life, we can only rely upon ourselves.