Has the Bank of Lithuania chief been too talkative?

Vitas Vasiliauskas
Vitas Vasiliauskas DELFI / Mindaugas Ažušilis

The ruling majority and Seimas Budget and Finance Committee (BFK) chairman Stasys Jakeliūnas, who is leading them into battle against the head of the Bank of Lithuania (BL), were unable to pass a no-confidence motion against Vitas Vasiliauskas. But have the passions calmed and will the Seimas’ relations with the LB be sunny, asks lrytas.lt editorial Laiko ženklai?

That’s naïve to hope for. Firstly, the BFK inquiry into bank influence on the 2009-2010 crisis in Lithuania has been extended and its conclusions will have to be presented on October 31 this autumn. Thus, S. Jakeliūnas has ample time to grill both the LB and Scandinavian banks, as well as V. Vasiliauskas himself.

Of course, the central bank of a country is an overly important institution to risk its authority simply due to a personal grudge, which is what the opposition is noisily trumpeting about.

However, there are more serious bases for the BFK inquiry than just the discord between S. Jakeliūnas and V. Vasiliauskas.

Investigations about the financial crisis

Members of parliament have the right to investigate, why the 2009-2010 crisis was so tough for Lithuania, what influence commercial banks had on the country’s finances and the interest rates of citizens, who took loans, whether the VILIBOR metric was manipulated and whether the state performed borrowing policy correctly by refusing aid from international financial institutions.

But the no-confidence motion against V. Vasiliauskas was prepared without awaiting the final conclusions of the investigation and the accusations were based on the LB head not cooperating with the BFK and turning his staff against the investigators, in other terms, making bad statements.

V. Vasiliauskas indeed spoke on the Seimas inquiry in a way that is unsuited for the head of an institution in a respectable country – calling the inquiry “marauding” and even “copulating with corpses.”

Does this not show that V. Vasiliauskas often acts arrogantly because he feels firm support from President Dalia Grybauskaitė?

Whoever wins the country’s presidential elections, V. Vasiliauskas expects to remain untouchable and maintain firm positions.

Perhaps he is led to believe this because I. Šimonytė is a companion of D. Grybauskaitė‘s, while G. Nausėda is a former banker.

Both are related to the crisis in Lithuania in one way or another, the crisis whose causes the Seimas commission seeks to uncover.

Lessons learned?

It would appear that he himself realised he overstepped because he admitted he had made mistakes, but only in carelessly talking – apparently you must always keep in mind that when you express your opinion, even in correspondence, one day this will escape beyond the confines of your institution. Now the Bank of Lithuania head added that it is a good lesson to them, how information system security should be improved.

This speaks volumes. Turns out that V. Vasiliauskas only regrets one nuance – that S. Jakeliūnas found out too much.

When talking about information system security, he likely had in mind the LB analytical report on the influence of the VILIBOR metric on the financial markets, which was not presented to the BFK and became S. Jakeliūnas’ weapon.

Regardless, talks by V. Vasiliauskas that mock the BFK inquiry and his perfunctory communication with investigators has gone beyond limits permissible to a state institution head and reek of arrogance. As mentioned, this can be explained through not only his personality traits, but also his political backing.

Attempts to overthrow V. Vasiliauskas would not be successful even if the Seimas passed a no-confidence motion against the head of the Bank of Lithuania because parliamentarians cannot charge the president to withdraw this official.

Nevertheless, through her advisor, the president unexpectedly declared that she sees how the LB and BFK are failing to come to terms and that both sides are to blame for this.

Loosing support of Grybausaitė?

This shows that the president, whose term is nearing its end, did not rush to blindly defend her protégé V. Vasiliauskas and warned that he is being too talkative.

Of course, there can be long musings on whether the statements of the Bank of Lithuania’s head that insult the BFK are enough to seek his dismissal when the investigation on the bank system’s influence on the financial crisis is still pending and the final conclusions have not been released.

The “Farmers” stand by the position that it is already a basis to demand V. Vasiliauskas’ head, even Prime Minister S. Skvernelis, who avoided stating his opinion so far, has expressed a lack of confidence in the head of the LB.

However, the ruling majority did not manage to rally their ranks, with some among Social Democrat Labour even voting against the motion. A part of the “Farmers” also did not participate during the vote. Perhaps it is an indicator that after the failure in the presidential elections, the ruling party is overcome with confusion?

It would appear that the BFK chairman is not planning to put down his weapons and is unable to even contain his anger at the battle lost to V. Vasiliauskas in Seimas, even if it isn’t the entire war.

But of course, S. Jakeliūnas will not stop halfway. He has already pledged to appeal to prosecutors over misleading information presented to the BFK and his next step is a complaint to the European Central Bank (ECB) for a moral evaluation of the BL leader’s words.


It is unlikely to have any legal consequences, but it will harm V. Vasiliauskas’ reputation.

One can imagine, just how surprised ECB bankers will be upon reading that the head of the LNB believes that Lithuanian MPs are copulating with corpses.

Nevertheless, it is clear that currently V. Vasiliauskas will retain his office, albeit he cannot be certain of his fate after the presidential elections.

If the “Farmers” strengthen their ruling coalition, it may be that one of the candidates elected president will choose to sacrifice the head of the LB, who is causing a ruckus and would do well to remember that the winds of politics are unpredictable, all in the name of calm.


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