Lithuania recently announced wage cuts of 20 to 40 percent for health and education workers, after having previously cut public employees’ wages in December. The cuts are a concession to intense pressure from the International Monetary Fund to cut “spending” in order to avoid bankruptcy.
The IMF, a tool of the capitalist ruling classes of the imperialist countries, has imposed strict conditions on economies seeking assistance—which most often comes in the form of burdensome loans that must be repaid. The strict conditions always spell disaster for the working and poor people of a nation.
Spurred by foreign investment and credit from Western banks, Lithuania’s was among the fastest growing economies in Europe last year. In the first quarter of 2009, however, Lithuania’s economy shrank by 12.6 percent, the largest contraction in gross domestic product recorded by a former Soviet Socialist Republic. This is indicative of the periodic crises of capitalism, a feature unknown to socialist systems.
