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The European Commission Reminds Lithuania That It Will Have to Repeatedly Submit the Draft Budgetary Plan 2017

Date

2016 10 26

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After the formation of a new Government Lithuania will have to repeatedly submit the Draft Budgetary Plan 2017 to the European Commission – as provided for in the procedural documents. This is emphasized in the European Commission letter of 25 October 2016 sent to Lithuania.

The Ministry of Finance notes that the European Commission in its letter to Lithuania, unlike in those to other euro area countries, does not request  additional clarifications on the budget and does not comment on the Draft Budget submitted to it on 17 October. The conclusion on the Draft Budget will be provided in November.

In its letter to Lithuania the European Commission confirms that it has received Lithuania’s appeal to use the flexibility in implementing structural reforms (“Social model”) provided for in the EU Stability and Growth Regulation.

Moreover, the European Commission calls the attention to the fact that the final assessment of the Draft Budgetary Plan 2017 and structural reforms will be provided when the Government formed by the new Seimas (Parliament) of the Republic of Lithuania will repeatedly submit the Draft Budget and approve the continued implementation of the structural reforms.

“Now it is crucial to behave responsibly and not to assume new additional long-term commitments”, states Minister of Finance Rasa Budbergytė.

According to the Minister, the Draft Budget submitted to the Commission is drawn up and submitted on 17 October in compliance with the time limits and other requirements set in the EU Regulations.

The Ministry of Finance reminds that Lithuania provided the European Commission with comprehensive information on the social model  (structural reform in the social and labour market area) and, in accordance with the procedure, requested the Commission to assess its compliance with  the  Stability and Growth Pact. This document provides for a possibility for the EU countries, which implement relevant structural reforms, not to include their costs in assessing the public finance balance.

It is planned that the aforementioned structural reform along with the increased non-taxable revenue rate will substantially contribute to the enhancement of economic growth possibilities and reduction of social inequality, thus implementing the European Council recommendations on the restructuring of the overall pension reform and labour market reform enabling better employment conditions.

The Draft Budget also presents the economic development prospects in the medium term, planned expenditure changes in 2017. In addition, the Ministry of Finance provided the detailed information on the planned better tax administration measures.

The Draft Budget of Lithuania submitted to the European Union authorities is prepared in accordance with the Draft Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets for 2017, Draft Laws on the State Social Insurance and the Compulsory Health Insurance Fund approved by the Parliament after the submission.

After the formation of the new Government the Draft Budget will be repeatedly sent to the European Commission and the Euro group having included the decisions to be made by the new Government.

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