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2020.03.17 09:22

Lithuanian government's business support plan: 10 key measures

updated
BNS2020.03.17 09:22

The Lithuanian government endorsed on Monday an unprecedented economic stimulus package, totaling 5 billion euros, to help mitigate the negative impact of the coronavirus crisis on workers and businesses.

The plan earmarks 1 billion euros for boosting the economy, and 500 million euros for shoring up the healthcare system, for preserving jobs and for maintaining business liquidity each.

Read more: Lithuanian government approves €2.5bn business relief plan

Here is a list of the ten key measures:

1. The government's net borrowing limit to be raised from 900 million euros to 5.4 billion euros.

2. In an effort to preserve jobs, the government will cover up to 60 percent of the cost of paying a worker for downtime, but no more than the minimum monthly wage of 555 euros.

3. Self-employed people who have paid their social security contributions will each receive up to 250 euros per month.

4. Households will be able to defer payments on electricity and gas or pay them in installments.

5. The plan provides for deferring or rescheduling tax payments for businesses affected by the coronavirus crisis as well as for exempting taxpayers from fines and penalties.

6. Resources from EU investment funds will be reallocated towards health, employment and business.

7. The guarantee limit for the Agricultural Credit Guarantee Fund and the state-owned credit guarantee agency INVEGA will be increased by 500 million euros.

8. Investment programmes (1.2 billion euros) will be accelerated by speeding up payments and increasing the intensity of funding.

9. The plan calls for unfreezing funds under the Climate Change and Road Maintenance and Development Programmes and for accelerating the apartment buildings' renovation programme.

10. The Bank of Lithuania has promised to ease regulatory measures to increase commercial banks' lending potential by 2.5 billion euros.

Read more: Lithuania's economy may shrink 1.2 percent due to coronavirus – central bank

Lithuanian president expects domestic reserves, EU to help ease coronavirus economic shocks

Meanwhile, a more flexible attitude by EU bodies and Lithuania's accumulated reserves will help mitigate the economic shocks caused by the coronavirus, President Gitanas Nausėda said on Monday.

"Today's situation is more favourable both because of EU institutions' adequate, responsible and flexible approach to what individual countries are doing in their economic policies and because, unlike in 2008, we have certain reserves," Nausėda said after meeting with Prime Minister Saulius Skvernelis.

Read more: Lithuanian government aims for €1.5bn reserve in case of downturn

"Unlike in 2008–2009, a different kind of anti-cyclical economic stabilisation policy is being pursued" to stem the economic slowdown, the president said.

"Even the measures announced today are related to EU-wide regulation," he added. "Tax deferrals, the lowering of the tax burden and public spending increases are designed to mitigate the impact of the coronavirus on key trade markets and our own domestic market."

"Such things would be impossible if the strict [EU] regulations that now exists both in terms of state aid to businesses and in terms of the Stability and Growth Pact remained in place," he added.

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