“Not only the public in the context of tax review should contribute to the financing of state defence but also state institutions by reviewing their expenditure. This means that in some places they should apply the zero-budget method, not relying on what was approved, spent or not spent last year, but should review the measures they are implementing again, directing the saved funds to defence," Minister of Finance Rimantas Šadžius says.
By the minutes of the meeting, the Government instructed the ministries (with the exception of the Ministry of National Defence) to review their management areas and to plan internal public sector expenditure using the zero-budget method. This includes expenditure for administrative purposes, information technology, other goods and services to be procured through public procurement. An important condition is that these savings do not have a negative impact on the services provided to the public.
The ministries will also have to submit proposals for abandoning or reducing the scope of lower-priority activities. Both these proposals and internal public sector expenditure savings are expected to be discussed during the budget negotiations.
The plan for drawing up the draft law on the approval of the budget for 2026-2028 stipulates that the negotiations between the Prime Minister, Minister of Finance and ministers with the institutions will take place earlier this year, in early summer. This means that the institutions will be given certainty about funding for the next three years much earlier.
“Negotiations take place in two stages: first, the institutions are consulted on the needs for the functions and activities carried out, the commitments already made, and then negotiations on the financing of additional measures take place. This year, these processes will fit into two months – after the main decisions on the three-year budget have been taken in the summer, the appropriation managers will be ensured the continuity of funding and will be able to plan most of the work in advance,” Minister of Finance R. Šadžius states.
The Ministry of Finance submits a plan for drawing up the draft law on the approval of the budget for a given year to the Government for approval every year. It provides for specific tasks for institutions participating in the budget preparation process: what data and information they must prepare and when and to whom they must submit it.
The plan for the preparation of the State budget for 2026-2028 envisages that:
• By 20 March, the Ministry of Finance publishes the economic development scenario and general government financial projections for 2025-2028.
• In April, the Ministry of Finance collects the funding needs of the institutions, which they submit as a matter of priority.
• 26 May - 13 June, Consultations between the Ministry of Finance, the Government and representatives of relevant ministries or representatives of other appropriation managers on planned appropriations and desired results: the results achieved by institutions in previous years are assessed, the appropriations used in carrying out progress and ongoing activities and the implementation of recommendations from the systematic expenditure review, proposals on ensuring the financing of the needs for the functions and activities performed are discussed.
• 16 June – 4 July, meetings between the Prime Minister, the Minister of Finance and the relevant Minister on the planned appropriations for 2026–2028 and the desired results in the relevant areas of the state activities. During these meetings, budget indicators are adjusted, and decisions are made on the financing of additional measures.
• By 11 July, the Ministry of Finance notifies the institutions of the maximum spending limits for 2026-2028, taking into account the decisions of the previous meetings on the allocation of funds calculated for each 3 years. After this stage, the institutions detail the 3-year spending plans.
• By 29 August, the institutions prepare draft estimates of the State budget programmes for the years 2026-2028 with preliminary calculations, within the limits of the maximum State budget appropriations notified during the discussions on appropriations.
• By 11 September, the Ministry of Finance updates the economic development scenario and general government finance projections for 2025-2028.
• By 15 October, the Ministry of Finance prepares and submits to the Government a draft law on the approval of the budget for 2026-2028.
The plan for drawing up the draft law on the approval of the budget for 2026-2028 is available here.
