Lithuania could soon enter a new chapter in its economic development, one that may see the country contributing more to the European Union’s long-term budget than it receives – a historic first.
As the European Parliament met in Strasbourg last week to discuss priorities for the 2028–2034 EU budget, expectations rose that the European Commission will unveil its first official draft in July. Lithuanian lawmakers and officials are already preparing for the implications.
There is a theoretical chance that after 2027, Lithuania may become a net contributor to the EU budget, said MEP Paulius Saudargas of the European People’s Party. “That would happen if our gross national income per capita reaches 90% of the EU average.”
That 90% threshold is critical, as it determines eligibility for the EU’s Cohesion Fund –one of the largest financial instruments supporting less developed member states. Created in 1994, the fund currently benefits countries such as Bulgaria, Croatia, Hungary, and the Baltic states. Lithuania is set to receive €1.645 billion from the Cohesion Fund between 2021 and 2027.
According to the European Commission, Lithuania’s gross national income (GNI) per capita stood at 84% of the EU average in 2023. Saudargas noted that figure may be even higher today – by some measures, Lithuania has already reached 87% of the EU average GDP per capita.
Lithuania is “right on the edge”, said Virginijus Sinkevičius, another Lithuanian MEP. “While some might not like the idea of paying more than we receive, I don’t see it as a bad thing if it means we’ve joined a more prosperous club.”
The EU’s current seven-year budget totals €1.2 trillion, largely supported by contributions from Germany, France, Italy, and Spain. In 2023, Lithuania contributed €668 million to the EU budget and received €2.279 billion in return.
Siegfried Mureșan, a Romanian MEP and co-rapporteur for the EU’s long-term budget, said focusing solely on the net balance of contributions versus receipts misses the point.
“Every member state benefits from the EU budget – whether directly or indirectly – through access to the single market, security, competitiveness, and programs like Erasmus,” Mureșan said. “Governments obsessed with net gains are looking at it the wrong way.”
Awaiting the Commission’s proposal
The Parliament’s vote on May 7 showed diverging views. Of the Lithuanian delegation, only Aurelijus Veryga abstained. The rest, including Saudargas, Sinkevičius, Petras Auštrevičius, and Vilija Blinkevičiūtė, voted in favour of the Parliament’s position. Two others – Rasa Juknevičienė and Petras Gražulis – were absent, with Juknevičienė attending the Kyiv Security Forum.
The Parliament rejected the idea of replicating the Recovery and Resilience Facility model in the next budget. That mechanism ties financial support to implementation of structural reforms. However, lawmakers endorsed making the EU budget both larger and more flexible.
“The current 1% expenditure cap, based on EU gross national income, is insufficient to tackle the growing number of crises,” the text reads.
Parliament also proposed creating a new competitiveness fund and enabling more agile use of unspent funds in emergencies. Saudargas highlighted natural disasters and hybrid threats – including military risks and infrastructure sabotage – as reasons for a flexible emergency fund.
“There was a blackout in Spain recently. Nature or hostile states can disrupt energy and communication systems,” he said. “We must be ready.”
Defence spending is expected to play a greater role in the upcoming budget. “The Parliament is calling for the creation of a European Defence Union and a budget that can run at a deficit,” Saudargas said.
He believes Lithuania could still receive significant EU support as a country on the bloc’s eastern flank. “Our northeastern region may be economically developed but still lacks in security. That could justify more targeted investments,” he added.
Balancing old and new priorities
At a press conference, Mureșan reiterated the EU’s commitment to preserving traditional budget priorities such as agriculture and cohesion while aligning them with emerging needs like defence.
Dual-use infrastructure projects – useful for both civilian and military purposes – can enhance security, he said, adding that agriculture is also tied to food security, which is increasingly important.
Sinkevičius said the Commission’s formal budget proposal is expected before the August recess. Until then, discussions are ongoing behind the scenes.
“There’s still a lot of uncertainty,” he said. “The list of priorities is long, and there’s never enough money.”
Key issues – such as how much to allocate to agriculture, how to manage cohesion funds, and how to respond to crises like Russia’s war in Ukraine – will shape the final deal. Sinkevičius noted that external factors, including tariffs threatened by President Trump and ongoing global instability, are complicating the planning process.
Once the Commission presents its proposal, trilateral negotiations among the EU’s institutions will continue through 2027.
The EU’s multiannual financial framework, or MFF, is funded through a combination of customs duties, a portion of member states’ value-added tax, contributions linked to plastic waste, and GNI-based contributions – the latter accounting for roughly 61.5% of the budget.
Despite its scope, the EU’s annual budget is relatively modest – about €160 to €180 billion, or just 1% of the bloc’s total GNI. By comparison, national budgets often comprise up to 50% of GNI.
Between 2021 and 2027, the MFF was complemented by the €750 billion Recovery and Resilience Facility. Combined, roughly €1.1 trillion was earmarked for cohesion, €373 billion for natural resources and the environment, €143 billion for innovation and digitalisation, and the rest for other EU priorities.
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