The Government Welcomes the Launch of the New EU Financial Perspective

Today, the Government approved the draft Programme for the European Union Funds’ Investments 2021-2027 and draft revised Partnership Agreement that will launch a new EU investment period in Lithuania. Minister of Finance Gintarė Skaistė noted that the investment programme approved by the Government is balanced and meets the needs of the State.

“Lithuania seeks to compete successfully on the international market, therefore, EUR 8 billion of the planned new EU Financial Perspective and today approved by the Government is primarily allocated to investments in transformation of the Lithuanian economy, creation of innovation and high added value. A successful delivery of changes  may only be achieved by investing in public policy areas that need new impetus or business continuity management — education, capacity building, labour market responsive to changing needs,” said Minister G. Skaistė.

According to the Minister, these investments are one of the tools of the European Union to achieve the goals of importance for Lithuania and the Community as a whole — to ensure the long-term economic and social well-being of the population as well as to strengthen the resilience and competitiveness of the Lithuanian economy. These goals become even more relevant in the context of Russia’s demonstrated military aggression against democratic Ukraine.

The Government, without waiting for the formal approval of the Programme, has already enabled the launch of public projects in the areas of transport, green transition, employment, as investments are urgently needed. Other projects will be able to benefit from the EU investments in the near future.

In order to achieve the ambitious objectives set by the Government, the investments under the Programme for the European Union Funds’ Investments 2021-2027 will focus on the following key areas:

  • innovation and digitisation, cooperation between science and business, commercialisation of knowledge;
  • education, capacity building, a skilled workforce able to innovate and respond to changing needs while addressing the challenges of social exclusion;
  • green transformation — promotion of renewable energy sources, sustainable mobility and circular economy;
  • strengthening the resilience of health systems;
  • smart, safe and intermodal connectivity, including the improvement of cross-border, national and regional mobility;
  • sustainable and integrated urban and regional development, based on regional solutions to increase attractiveness and economic potential, to attract investments and to improve the quality of life.

It should be noted that the Cohesion Fund is not broken down by region, while the European Regional Development Fund and the European Social Fund+ are broken down by the Central Western region of Lithuania and Capital region.

The Partnership Agreement foresees EUR 4.7 billion of the European Regional Development Fund, EUR 1.5 billion of the Cohesion Fund, EUR 1.4 billion of the European Social Fund, EUR 321 million of the Just Transition Fund and EUR 87 million of the European Maritime and Fisheries Fund to be invested in Lithuania.

The Programme funds presented at the Government meeting are planned considering the need to reduce regional disparities in the country. The initial offer of the European Commission earmarked only EUR 43 million, or even 97 % less than the current 2014-2020 period, for the Capital region. In order to avoid a drastic decline in investments and to achieve the goals set, the additional investment transfer of EUR 650.88 million and the investments from the Cohesion Fund in the Capital region, covering Elektrėnai, Šalčininkai district, Širvintos district, Švenčionys district, Trakai, Ukmergė district and Vilnius City and district municipalities, agreed with the EC have significant internal imbalances in economic and social development. In total, including national funding, the investments in the Capital region will amount to more than EUR 1.3 billion.

The Capital region embraces 40 % of the country’s small and medium-sized enterprises, 54 % of innovative enterprises, 40 % of companies exporting high value added products, 75 % of the country’s universities and research institutions, and musters about 55 % of researchers and researchers. This potential must be harnessed for the country’s progress − the share of funds targeted towards the development of the Capital region will generate the added value, foster economic development, enhance competitiveness and integration into international value chains.

It should be noted that, despite this transfer, about 88 % or EUR 4.1 billion of the European Regional Development Fund and the European Social Fund+ is allocated to the Central and Western region of Lithuania. Moreover, in order to accelerate the development of the Central and Western region of Lithuania, the development and implementation of business ideas will be financed exclusively in this region, if necessary, the support is provided not only through financial instruments, but also through grants, and the implementation of projects will require less contribution from own funds.

The Government paid particular attention to the proper involvement of socio-economic partners in the programming process. The partners actively participated in consultations with ministries on where and how to target investments in the most efficient way. In total, 70 thematic consultations took place, involving around 200 representatives from different institutions, experts and stakeholders. At the same time, targeted written consultations were also organised on the e-citizen platform.

The draft Programme for the European Union Funds’ Investments 2021-2027 and draft revised Partnership Agreement will be shortly submitted to the European Commission for approval. However, in order to launch necessary investments as soon as possible, EUR 8 million of spending on the implementation of the first projects has already been allocated last year. There are no obstacles for publication of calls for projects selected through public planning right now. And this month it will be possible to issue calls for joint and competitive projects. Regional projects are expected to start already in May.

Please note that the Partnership Agreement is a concise strategic document underlying the negotiations between the EC and Lithuania on five funds – the European Regional Development Fund, Cohesion Fund, European Social Fund+, Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund. This Agreement foresees investments of almost EUR 6.35 billion from five funds. Lithuania will contribute an additional EUR 1.7 billion from national co-financing, therefore the total investment volume will be about EUR 8 billion. It consists of 3 programmes: the Programme for the European Union Funds’ Investments 2021-2027, Lithuanian Fisheries Sector Programme 2021-2027 and the Programme for the Reduction of Material Deprivation. 

The draft Programme for the European Union Funds’ Investments 2021-2027 is available HERE and HERE