Ruling parties consider up to 600 million euros in extra borrowing

Lithuania’s ruling parties discussed possible changes to next year’s budget, including borrowing up to 600 million euros for energy security investments, at an unannounced meeting in the Seimas, the country’s parliament, on Monday evening, LRT reported.

More than two hours of talks ended without a decision on specific budget changes. Finance Minister Taurimas Valys said participants had discussed reviving some proposals that had previously been rejected. Prime Minister Mindaugas Sinkevičius, Valys, Seimas Speaker Juozas Olekas and representatives of the Democrats and Farmers parliamentary groups attended.

The possible borrowing would use a European Commission exception allowing countries to increase their deficit or debt to fund investments in energy security and reducing reliance on fossil fuels, without breaching fiscal rules. The exception allows an annual limit of 0.3% of GDP for energy security measures and a cumulative limit of up to 0.6% of GDP through 2028.

Valys said the government had received proposals from the Energy Ministry and was awaiting final proposals from the Transport and Environment ministries. Lithuania would need to submit a plan to the European Commission before using the exception. He said the government was proceeding cautiously because the borrowing would increase public debt and that a political decision was still needed.

Energy Minister Lukas Savickas said he had heard no objections from coalition partners to using the borrowing option. The government still needs to agree on which investments to include and how much to seek. Possible uses include electricity interconnections, backup power supply, energy storage, decentralised generation and infrastructure protection.

Olekas said the ruling parties had no major objections to the budget proposal, which is due to be presented to the Seimas on Tuesday. He said the draft reflected priorities including security, defence and family support, while disagreements concerned details. Democratic MP Algirdas Butkevičius said the finance minister had made no promises about new revenue sources.

Next year’s state budget is projected to bring in 22.2 billion euros, including European Union funds, up 5.2% from this year. Spending is forecast at 27.9 billion euros, a 1.3% increase. The general government deficit is projected at 3.8% of GDP, above the 3% limit set by the Maastricht criteria for EU member states.