President of the Republic of Lithuania President of the Republic of Lithuania

The President and the Vice President of the European Commission discussed economic development scenarios and the response to the crisis

2020-06-08

The President and the Vice President of the European Commission discussed economic development scenarios and the response to the crisis

President Gitanas Nausėda had a conference call with Valdis Dombrovskis, Executive Vice President of the European Commission, responsible for EU financial stability and social dialogue. The conversation focused on the discussion of economic trends in Lithuania and the Community, economic stimulus plans, negotiations on the EU multiannual financial perspective and the security of the Ostravets NPP.

The President agrees with the guidelines provided to Lithuania in the EC recommendations for effective mitigation of the consequences of the pandemic by concentrating funding and investment on economic competitiveness, productivity and action to reduce the social impact of the crisis and exclusion.

The President was happy that the Commission’s recommendations reiterated his aim to use the crisis as an opportunity for the breakthrough of science and innovation in Lithuania, i.e., to create an innovative and green Lithuanian economy based on digital innovation.

The President and the Vice President of the Commission discussed social and economic measures aimed at reducing negative impact of the crisis on the employment and income of the Lithuanian people. The Commission forecasts the risk of a significant decrease in wages and contraction of private consumption in Lithuania.

In response to this risk, the President presented proposals made at his initiative to increase the tax-exempt income and to temporarily reduce the standard personal income tax rate from 20 to 15 percent from 1 July until the end of the year (it will only apply to the income share up to 3 average wages) as well as to grant the lump sums to children, especially for low-income families. “These measures will contribute to the growth of consumption, level out the possible wage cuts, and prevent an increase in emigration and shadow economy during the crisis”, said the President, adding that Germany had just approved a package of similar measures to speed up the recovery.

During the conversation, the two leaders also exchanged views on EU’s response to the economic crisis, the multiannual financial framework for 2021-2027 and the European Recovery Fund. The President emphasized that Lithuania’s position on the size of the EU budget remained unchanged: in the face of this unprecedented situation, the multiannual financial framework should be more ambitious, it was necessary to negotiate more funding for the Cohesion Policy and full convergence of direct payments to farmers. The President reminded Valdis Dombrovskis that Lithuania expected the EU to respect its commitments to provide the necessary funding for the decommissioning of the Ignalina NPP and the Kaliningrad Transit Area Project.

The President emphasized the need to ensure that all Member States could benefit from the European Recovery Fund based on objective criteria for the allocation of funds.

During the conversation, the synchronization of electricity connections with continental Europe as well as the implementation of the Rail Baltika projects, which are highly important for Lithuania, were also touched upon. The threat posed by the unsafe Ostravets NPP and the need to prevent electricity generated by unsafe power plants from entering the European Union market was also addressed.

The President‘s Communication Group

Last updated 2020.06.09 10:22

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