Lithuanian liberals reject budget, demand debt reduction plan

Lithuania’s Liberal Movement council has rejected the government’s proposed 2027–2029 state budget and called for a plan to reduce public debt and the deficit, LRT reported on Saturday.

The party says the proposal forecasts a general government deficit of 3.8% of gross domestic product (GDP) in 2027, 4.6% in 2028 and 3.9% in 2029. Public debt is projected to rise from 48.2% to 54.3% of GDP over the period.

Liberal Movement chair Viktorija Čmilytė-Nielsen said the need to fund defence did not remove the government’s responsibility to plan other spending. The resolution calls for a specific plan to manage rising debt and reduce the deficit, with clear targets, deadlines and measures. It also urges the government to distinguish borrowing for defence from borrowing to cover other state expenditure.

The party’s council proposed reviewing public spending, eliminating overlapping functions between institutions and ending ineffective programmes. It also called for an assessment of how existing tax revenue is used before taxes on residents and businesses are increased, as well as plans to tackle the shadow economy and improve tax collection. The resolution says initiatives without sustainable funding should be halted.

Finance Minister Taurimas Valys presented the 2027 budget proposal to parliament on Tuesday. It forecasts revenue of 22.2 billion euros and expenditure of 27.9 billion euros. More than 4.8 billion euros, or 5% of GDP, is allocated to defence; the plan also includes increases to pensions, the minimum monthly wage, social benefits and public-sector salaries.

Under European Union Maastricht criteria, the general government deficit should not exceed 3% of GDP and public debt should remain below 60%. Parliament is due to hold its first reading of the budget proposal on November 19 and its second on December 1.