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2020.03.16 12:18

Lithuanian government approves €2.5bn business relief plan

Paulius Viluckas, BNS2020.03.16 12:18

The Lithuanian government has endorsed a 2.5-billion-euro economic stimulus plan to mitigate the effects of the coronavirus epidemic. The measures include subsidies to preserve jobs and tax delays.

Finance Minister Vilius Šapoka said on Monday that the government's borrowing limit would be raised to 5 billion euros, or around 10 percent of the country's GDP.

Read more: Lithuanian government pledges tax breaks and economic stimulus package in wake of coronavirus quarantine

“We are facing this kind of threat for the first time, so the response must be historic. I am asking every responsible politician, businessperson, bank and citizen to respond and contribute,” Šapoka said during the Cabinet's pre-sitting meeting.

The minister says only businesses that will not force their employees to take unpaid leave or dismiss them will be eligible to concessions.

The total value of the planned measures stand at around 2.5 billion euros.

Under the plan, the state will provide assistance to businesses in order to preserve jobs for up to three months during partial or complete downtime.

The bill says workers will have to be paid at least the minimum wage, and it also includes measures to help businesses to preserve their liquidity.

The government will allow business to postpone tax payments or agree on tax payments scheduled without interests.

Tax payers will also be exempt from fines and interest payment, and the recovery of tax arrears will be suspended.

The Lithuanian government's economic stimulus plan also includes resources for the healthcare system. The money will come from the government and state reserve and also the EU and borrowed funds.

On Saturday, Finance Minister Šapoka said during the Cabinet sitting that due to the extraordinary situation, the country's economic response must be “resolute and unprecedented”.

Lithuania was placed under quarantine on Monday.

Read more: Lithuania under quarantine: Key instructions and recommendations