Lithuania is Seeking a Loan of €1.8 Billion from the EU

Lithuania is seeking a loan of €1.8 billion from the EU's Recovery and Resilience Facility to support the country's economic recovery. 

As LRT reported, the announcement was made by the Lithuanian Ministry of Finance

According to the Finance Minister of Lithuania, Gintarė Skaistė, the loan will be used for investments and economic stimulation. The primary areas of focus for the new investments will be providing loans to businesses (€1 billion) and producing renewable energy (an additional €700 million).

"We will double the investment program from €2.225 billion, which was prepared in 2021, to nearly €4 billion. The new measures will not only increase the competitiveness of Lithuanian companies by integrating them into global value chains of green technologies, but also strengthen our country's energy self-sufficiency through significant investments in environmentally friendly energy production," said Skaistė.

Under the EU's Recovery and Resilience Facility (RRF) program, Lithuania has already been granted €2.2 billion in grants and has the possibility of receiving around €3 billion in loans. Currently, Lithuania has submitted a plan only for the grants.

Earlier, it was revealed that Lithuania aims to earn over half a billion euros within the next two years through the introduction of an extraordinary tax on bank profits. The money is intended to be used to enhance Lithuania's military mobility.

The proposal for such a tax was put forward by Finance Minister Gintarė Skaistė. According to the proposal, banks' interest income, which exceeds twice the average over the past four years, would be subject to a two-year tax of 60%.

The profit of the banking sector in the Baltic countries has sharply increased, primarily due to high interest rates, including those on mortgage loans.

If the Lithuanian parliament approves the special tax, Lithuania can use the funds collected for defense-related expenses over the next two years, as confirmed by Skaistė.

During a press conference, the Finance Minister stated that banks' own decisions did not impact their substantial profits, which were influenced by extraordinary external circumstances.

The additional funds received will also be directed towards improving roads and expanding airports to ensure that in case of need, NATO allies' forces can quickly come to Lithuania's assistance. The Finance Minister added that due to the economic situation, Lithuanian banks may receive an additional billion euros in profit in both 2023 and 2024, which is three times more than in previous years.