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The Government Approved the Integrated Plan “New Generation Lithuania”

Date

2021 05 14

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Today, the Government approved the updated integrated plan “New Generation Lithuania” providing for reforms and investments for the development of Lithuania as a country generating high added value. Minister of Finance Gintarė Skaistė notes that this decision will allow to undertake necessary reforms which the Council of Europe has been talking about for almost a decade.

“The approval of the renewed integrated plan "New Generation Lithuania" by the Government today lays foundations for necessary changes for a faster creation of high added value, digitisation, green course, provision of better education, health and social services, as well as for building a more equitable and resilient country. We have ambitious goals that we have embedded in the Government Programme and Action Plan, while the funds of the plan "New Generation Lithuania" will contribute towards achieving these goals," said Minister of Finance Gintarė Skaistė. Upon approval by the Government, today, as we have provisionally agreed with Vice President of the European Commission M. Vestager, we will also formally submit the plan to the Commission”.

Taking into account the proposals received from social and economic partners as well as the public during the public consultation, the plan has been updated by integrating investments in the cultural, educational sectors and additional funds for self-governance needs, where EUR30 million is earmarked for digitisation and increased accessibility of cultural resources by giving priority to selection of cultural heritage sites held in memory institutions, EUR20 million − for the development of digital educational content and resources to enable personalised distance learning not only in a pandemic situation, and extra EUR30 million will be designated to improve municipal public services and their infrastructure. Additionally, EUR 6.3 million will be allocated to studies of sequencing the entire human genome of the representative sample of the Lithuanian population. At the same time, it is noted that a large part of 300 proposals received from social partners and representatives of the public during the consultation has been already financed from other financing sources, the measures have been already foreseen in reforms or other instruments when implementing the Government Programme and strategic documents of Lithuania.

The results of the macro-modelling carried out by experts using the quality of life growth model show a strong impact of the measures of the plan on national gross domestic product – a faster real GDP growth will be ensured in the period 2022-2026, i.e. on average 1.7 % or EUR 825 million per year, and during the entire implementation of the plan (2021-2026) with funds of the plan “New Generation Lithuania” channelled to the national economy, EUR 4.2 billion of GDP will be additionally created. It is estimated that every euro invested will generate a real GDP return of EUR 1.9. Planned reforms and investments will also contribute to improving climate change-related indicators, while in the medium and long term – they will have a positive impact on the labour market and poverty reduction.

It is estimated that the employment rate will increase by 1.6 p.p. in 2025, the unemployment rate will decrease by 2.0 p.p., while youth unemployment (15-24 years of age) will decrease even by 2.3 p.p. as compared to the baseline scenario. The main reason for better indicators is the reforms of active labour market policy measures. These reforms will have a long-term impact on ability of people to get job and stay at work, therefore performance indicators will be better over the entire forecast period (by 2040)

The at-risk-of-poverty rate is also projected to fall by 1 % p.p. in 2025 and decrease by 1.3 p.p. by 2040.

Greenhouse gas emissions will decrease by 22.6 t/million of GDP in 2025, and will continue to abate over time.

At the same time, Minister of Finance G. Skaistė noted that although the investments of EUR 2.225 billion earmarked for the national plan “New Generation Lithuania” are significant for changes in the country, they are not the only ones. This resource represents only about one seventh of the total amount of EUR 16 billion planned for progress in the upcoming periods. This financing instrument forms a part of the European Union overall package “Next Generation EU” for growth and preparedness for future challenges also including such financing instruments as REACT-EU, Just Transition Fund and European Agricultural Fund for Rural Development. Whereas, additional initiatives contributing to important changes, according to the Minister, may be implemented in the future under other progress measures.

The European Economic Recovery and Resilience Facility earmarks the grants of EUR 2.225 billion for Lithuania which will be used for seven pillars, namely green transition, digital transformation, health, social affairs, research and innovation, education, public governance. Green transition and digital transformation are priorities of the entire European Union, to which each Member State must allocate at least 37 % and 20 % of the Fund’s assistance, respectively. Awaring the importance of these priorities, the updated plan “New Generation Lithuania” allocates even more funds for green transformation and digitalisation, i.e. 43 % and 33 % respectively.

For further information on the updated integrated plan “New Generation Lithuania” please refer here.