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2020.01.15 14:31

Lithuania in for ‘shock therapy’ as EU funding drops

BNS 2020.01.15 14:31

Lithuania is bracing itself for a financial “shock therapy” once the European Union cuts cohesion funds for the country, the finance minister says.

Under the EU multiannual budget bill for 2021-2027, cohesion funding, aimed at helping poorer member states to catch up, would be cut by around 27 percent for Lithuania.

“We want equal opportunities and we want our national budget to avoid the shock therapy, especially when it comes to cohesion,” Foreign Minister Linas Linkevičius told reporters after a meeting with President Gitanas Nausėda.

Finance Minister Vilius Šapoka says the drop in cohesion funding might push Lithuania into “middle income trap” and slow the country's economy.

“The fact is that a lot of projects, really progressive projects, are funded from this source [cohesion funds]. Naturally, we need to look for alternatives, a plan B, to fund investment to build our country's wellbeing. In any case, whatever those decisions might be, Lithuanian economy will slow down,” Šapoka said.

EU leaders are to gather for the next round of talks on the new budget in late February.