Economy

Government savings notes distributed for EUR 2.5 million

2024-06-25T12:19:07+03:00

The distribution of the tenth issue Government savings notes (GSN) ended on Monday, where residents purchased GSN for EUR 2.5 million and 282 transactions were made. Residents will be paid 3.1 per cent of annual interest on this new one-year GSN issue.

After renewal of GSN distribution this year, residents could purchase the ninth issue GSN on 3-17 June. The redemption of this issue will be on 18 June 2025. GSN are distributed via dealers selected by the Ministry of Finance – Swedbank and SEB banks.

During the aforementioned period, Swedbank concluded 240 agreements to purchase GSN in the amount of EUR 2 million, while SEB – 42 agreements for EUR 0.5 million.

Preliminary schedule for GSN issue foresees to distribute the twelfth issue on 1-15 July to be redeemed on 16 July 2025. The schedule is updated on monthly basis and published on the website of the Ministry of Finance.

The GSN interest rates are set for each issue individually, taking into account the appropriate term average Government borrowing rate on behalf of the State. GSN interest rates are fixed no later than one working day before the start of placement of savings notes and published together with other GSN issue distribution terms and conditions on the website of the Ministry of Finance.

The GSNs are the Government securities to be purchased solely by natural persons. It is a safe investment that generates returns, similar to term deposits with a commercial bank, only in this case the residents would entrust their savings to the Government. In turn, the GSNs is an opportunity for the Government to form one more borrowing instrument – to borrow from residents directly and thus attract the residents’ savings not invested elsewhere.

Anyone willing to purchase GSNs during their emission will be able to do so via the distributors chosen by the Ministry of Finance, Swedbank or SEB, on their online bank with a few clicks of buttons. SEB will make it possible to purchase GSNs in bank branches as well (more information is available here and here).

When the time comes to redeem the GSNs, the investor will not have to do anything – the money for the redeemed GSNs and the interest due will be automatically transferred to the same account from which the payment for the purchased GSNs was made.

https://finmin.lrv.lt/

Seimas approves the Defence Fund package

2024-06-24T15:53:28+03:00

The Defence Fund package, which will increase the national defence spending to 3% of gross domestic product (GDP) for the period 2025-2030, prepared by the Ministry of Finance was approved by the Seimas. According to Minister G. Skaistė, the package consists of four parts: the extension of the solidarity contribution, corporate income tax decisions, excise duty decisions, and the concept of the security contribution.

“Given the geopolitical situation, russia’s increased investment in the military industry and the fact that Lithuania is located on the border of the European Union, we must do everything we can to ensure Lithuania’s security and deter the enemy from ideas to set foot in our country. I am delighted that the Seimas has managed to mobilise and adopt the Defence Fund package prepared by us, which will ensure the necessary level of defence funding and preparedness for threats, and will strengthen both air and ground defence capabilities,” Minister G. Skaistė noted.

Tax decisions of the Defence Fund

Thecorporate income tax decisions include raising the corporate income tax rate for business by 1 pp. from the current 15 % to 16 % and increasing the reduced corporate income tax rate for small companies by 1 pp. to 6 %, as well as withdrawing of sectoral corporate income tax exemptions for health care institutions and life insurance companies and the limitation of the car purchase price and rental cost deduction in relation to the CO2 emissions of the car, thus also contributing to the achievement of environmental (the Green Deal) objectives. These decisions will provide an additional EUR 37 million for the Defence Fund in 2025, and more than EUR 132 million in 2026-2027 each year.

The largest part of the Defence Fund package consists of excise decisions: additional excise duties on alcohol and tobacco, which will contribute to the three-year excise plan and a 6-cent (part of excise duty + VAT) defence component per litre for petrol, diesel, green diesel for farmers, oil gas and other energy products within two years. These decisions will allow the Defence Fund to secure an additional almost EUR 87 million in 2025, more than EUR 168 million in 2026, and EUR 186 million in 2027.

On Tuesday, the Seimas also approved another component of the Defence Fund, the Solidarity Contribution. It has been extended by one year until 2026, thus maintaining the logic of the contribution as a temporary solution to the significant increase in the profits of financial institutions, which was mainly driven by economic and geopolitical factors and responses in the last two years, rather than business decisions. The extension of the solidarity contribution by one year will generate EUR 60 million for the Defence Fund. 110 Members of the Seimas voted in favour of the amendments to the Law on the Temporary Solidarity Contribution, with one vote against and 10 abstentions.

Theconcept of the Security Contribution – a 10 % contribution on insurance contracts without applying it to life insurance and civil liability insurance of natural persons – has been submitted for public consultation by 21 June. As the regulation is completely new, the concept, unlike other proposed decisions, is first presented to the public and then a draft law will be drawn up. This decision will generate an additional EUR 50 million in 2025, and EUR 100 million each year in 2026-2027.

In total, the decisions of the Defence Fund will ensure additional funding of almost EUR 259 million in 2025, more than EUR 425 million in 2026, and almost EUR 444 million in 2027.

Defence and civil protection needs and additional decisions

According to the data of the Ministry of National Defence, defence funding needs for the next five-year period are composed of fixed and variable components. A steady and continuous need to reach 3 % of GDP in 2025 and to maintain this level of financing by 2030 will require an additional 0.5 % of GDP per year. This will be EUR 400 million in 2025, EUR 440 million in 2027. These needs will be addressed by the proposed Defence Fund decisions. The additional variable component need until 2030 amounts to up to EUR 50 million per year. These needsare to be met by borrowing through defence bonds and notes, with a possibility to be acquired not only by natural persons but also by legal entities and by establishing that the cost of borrowing may not exceed 2 %.

For the implementation of civil protection strengthening and development needs, it is proposed to channel EUR 25 million of personal income tax (PIT) revenue per year from economic growth received by municipalities to the implementation of the civil protection strengthening and development programme: the development of shelter infrastructure; prevention and preparedness initiatives; provision of supplies for uninterrupted activities and for ensuring needs of the population.

It should be noted that on the initiative of Prime Minister Ingrida Šimonytė, three meetings with representatives of parliamentary parties, trade unions and employers’ associations and three consultations with social partners (business, trade unions and NGOs representatives) were held in search of a broad consensus on possible decisions to increase defence funding. Based on consultations-discussions, “traffic lights” for possible decisions were formed, and the format of proposals was agreed – additional revenue decisions would be provided in the form of a separate law on the national defence fund. The Defence Fund approved today by the Seimas, which consists mainly of proposals that have received broad support from political parties, business, trade unions and NGOs, ensures the implementation of defence needs.

www.finmin.lrv.lt

EIMIN: Amendments to the Online Business Protection Law submitted to Parliament

2024-06-14T14:08:10+03:00

An initiative by the Ministry of the Economy and Innovation will soon make it easier for online businesses to defend their rights against unfair online intermediary platforms and search engine providers.

They will only need to contact the Competition Council to report unfair behaviour by online intermediary platforms and search engines, such as disconnection from the platform without warning, non-transparent use of preferential terms or failure to inform them of possible removal from the platform. Such amendments have been submitted to the Seimas for consideration.

"We are increasing the transparency requirements for online intermediary platforms and search engines when they offer their services to businesses. This will help to combat more effectively the unfair practices that intermediary platforms impose on smaller businesses. This will ensure even more effective remedies for businesses," said Aušrinė Armonaitė, Minister of the Economy and Innovation.

The draft law is the result of the implementation of an EU regulation on improving the fairness and transparency of online intermediary services provided to business customers. It provides that the Competition Council will monitor the compliance of online intermediation platforms with the requirements of the EU Regulation and will have the power to impose fines for violations of the EU Regulation.

"It will be easier for small businesses to defend their infringed rights against unfair online platforms. This will encourage small and medium-sized enterprises to be more proactive in making the most of the opportunities offered by online platforms. The appointment of the Competition Council as a supervisory authority will reduce the burden on the courts and make it easier, cheaper and simpler for small businesses to apply to the Competition Council rather than go directly to court to defend their interests," said Ieva Valeškaitė, Deputy Minister of the Economy and Innovation.

The Competition Council will investigate complaints of infringements and impose sanctions, cooperate with the supervisory authorities of other EU Member States, assist them in cross-border investigations and exchange information.

The Competition Council's monitoring of e-marketplaces has shown that at least several dozen providers of online intermediary platform services and internet search engines are operating in Lithuania or providing services to business customers.

https://eimin.lrv.lt/

Lithuanian Airports are looking for a duty-free shop operator

2024-06-11T18:08:45+03:00

Lithuanian Airports (LTOU) is launching an international lease tender to select a duty-free shop operator for Vilnius and Kaunas airports. The selected partner is expected to start operations at Vilnius and Kaunas airports in 2025. LTOU representatives say that the tender is expected to attract the attention of international market players and applications are expected by the second half of September.

The future duty-free operator will lease and operate in a total of 2,574 sqm of space at the airports in the capital and Kaunas.

Currently, both Vilnius and Kaunas airports have Heinemann Duty Free stores operated by Travel Retail Vilnius.

It is recalled that a total of four international tenders for the selection of leasing partners have been announced or will be announced in 2024. The first one was announced for the operator of an everyday convenience store, and now the selection of a duty-free operator has been announced.

One tender has also already been launched for the selection of a catering operator, which will set up and operate six catering outlets at Vilnius Airport. Later this year, another tender for a catering operator will be launched for the installation and management of three catering facilities.

Strategic infrastructure development

Strategic infrastructure development projects are currently underway at both Vilnius and Kaunas airports: a new departures terminal is being built in Vilnius, the passenger terminal is being reconstructed in Kaunas.

It is estimated that by 2025, these passenger terminal expansion projects will enable Lithuanian airports to handle a 10 million passengers per year.

In 2025, once the construction of Vilnius Airport's new departures terminal is completed and all the systems required for the departures process have been relocated there, reconstruction of the existing space in the current terminal will begin, with the conversion of the existing terminal into commercially viable space.

More information on the conditions of this tender and other tenders announced by Lithuanian Airports can be found at https://tenders.ltou.lt

www.vno.lt

Lithuania participates in Money20/20, one of the largest fintech exhibitions

2024-06-10T15:06:27+03:00

The Minister of the Economy and Innovation Aušrinė Armonaitė opened the Lithuanian stand at Money20/20, one of the largest financial technology (fintech) exhibitions in Amsterdam. This year, 8 fintech companies from Lithuania are participating in the national stand.

"Lithuania is participating in the exhibition as one of the leaders in fintech. We are the largest fintech centre in the EU in terms of the number of licences issued, and we have one of the strongest ecosystems. This exhibition is an opportunity for our companies to establish contacts and expand international partnerships, as well as to showcase Lithuania's potential and attract the world's largest fintech companies to our country," said the Minister of the Economy and Innovation A. Armonaitė.

Lithuania's fintech sector has been growing successfully in recent years. According to the latest Fintech Sector Review, there are currently around 270 fintech companies operating in Lithuania, serving 27 million customers across the EU. The sector employs more than 7,000 people.

Money20/20, one of the largest fintech exhibitions, attracts professionals from all over the world. This year, fintech companies Ondato, DeRISK Business Solutions, Baltic Amadeus, Noviti Finance, Neopay, ConnectPay, European Merchant Bank | EMBank, Paysera will present their fintech solutions at the national stand organised by the Innovation Agency and Rockit. Last year, the exhibition attracted more than 8,000 exhibitors from 50 countries.

https://eimin.lrv.lt/

Third Baltic LNG and New Energies Forum Brings Energy Experts from Across Europe

2024-06-07T12:05:58+03:00

This week, Klaipėda is hosting the third Baltic LNG & New Energies Forum, which focuses on regional cooperation for energy security and a smooth energy transition. The international forum, organized in collaboration with the international energy terminal operator KN Energies, brings together over 150 participants from the European energy sector, including international experts and decision-makers.

This year's event emphasizes increasing Europe's LNG supply capacity and adapting existing energy infrastructure to meet future energy needs and reduce carbon dioxide (CO2) emissions. It also highlights the importance of regional cooperation in developing energy infrastructures suited to new energy sources, such as hydrogen, offshore wind, and biomethane, which will play crucial roles in achieving Europe's climate goals.

"Europe now has two key energy goals: to move rapidly towards climate neutrality and to secure its energy needs and stable supply while minimizing geopolitical risks. Reconciling these objectives requires coordinated action and the development of necessary infrastructure. New challenges and objectives dictate essential changes in the energy system transformation, which we have the opportunity to discuss at the Forum," said Inga Žilienė, Lithuanian Vice-Minister of Energy. The Vice-Minister reviewed the main aspects of the National Energy Independence Strategy, addressing key issues at the event.

To emphasize the importance of new energy sources and the growing industry focus on them, this year's event has been renamed from the Baltic LNG and Gas Forum to the Baltic LNG and New Energies Forum.

"With the climate neutrality deadline looming, Europe and our region need to accelerate energy transformation while ensuring energy security and independence. This requires cooperation between countries, which is a precondition for a stable and assured transition from strategic dependencies and CO2-intensive energy to climate-oriented infrastructure. The Baltic LNG and New Energies Forum is a relevant and timely platform for promoting such cooperation and finding the best solutions, which is particularly relevant to KN Energies as it aims to become climate neutral by 2050," said Darius Šilenskis, CEO of KN Energies.

According to Šilenskis, Lithuania has valuable experience in achieving energy independence, and Klaipėda's role as a regional hub for LNG and terminal services makes the country strategically important for the Baltic region's energy supply chains. It is therefore no coincidence that energy experts and industry representatives are gathering in Klaipėda.

During the Forum, industry experts, company and association representatives, regulators, and decision-makers from various countries gave presentations, commented on case studies, and reviewed the latest trends in the sector.

Topics included the potential of new energy sources, the role of LNG in the green transformation, market forecasts for LNG products, the potential role of Ukraine's gas infrastructure in securing Europe's energy independence, and discussions on technological innovations in energy infrastructure, among others.

https://enmin.lrv.lt/

EIMIN to fund participation of tourism sector representatives in events abroad

2024-06-06T16:08:11+03:00

The Ministry of the Economy and Innovation is consistently investing in the growth of Lithuania's tourism sector by announcing a call for funding for tourism representatives to participate in exhibitions and business events abroad.

"Last year we received 1.4 million foreign tourists, and this year we expect a quarter more. This new measure is therefore an opportunity for participants in the tourism ecosystem to establish international contacts, implement joint initiatives and at the same time stimulate the growth of the sector," said Aušrinė Armonaitė, Minister of the Economy and Innovation.

Inbound tourism operators and tourism associations operating in Lithuania can apply from 12 June to 12 July this year.

"Presentation of Lithuanian tourism products in foreign markets and participation in international events will not only contribute to the sale of Lithuanian products and projects, but will also help to improve Lithuania's publicity and image at the global level and attract tourists to the country," says Karolis Žemaitis, Deputy Minister of the Economy and Innovation.

Tourism associations must bring together at least 10 tourism service providers offering inbound tourism services. They must also have been established for at least one year.

The main activity of tour operators must be inbound tourism, i.e. revenues from inbound tourism must exceed revenues from other types of tourism or account for more than 55% of revenues. Tour operators must also hold a Tour Operator's Certificate, issued before 1 January 2023, authorising them to carry out the activities of an incoming tourism tour operator.

The applicant may receive funding to participate in a maximum of 3 different events abroad until 31 March 2025. The maximum financial contribution for a project is up to 80% of the costs and the total maximum amount available per applicant is €4,000.

According to data from the first quarter of this year, the number of foreign tourists in 2024 is fast approaching pre-pandemic levels. It is predicted that we will receive around 1.7 million foreign tourists in 2024.

https://eimin.lrv.lt/

Lithuanian, German and Japanese Ministers of Transport in Berlin agree to promote development and use of e-fuels in transport

2024-06-05T16:12:09+03:00

Lithuanian Minister of Transport and Communications Marius Skuodis, participating today in the international conference E-Fuels Dialogue 2024 in Berlin, signed a joint declaration with his German and Japanese counterparts to promote the use of e-fuels in transport. Lithuania sees the production and use of e-fuels and other alternative fuels as an important opportunity for the country's economy, since the development of these fuels will help our country become the centre of green energy in the Baltic region.

The declaration was signed by Mr Skuodis together with Dr Volker Wissing, German Federal Minister for Digital Affairs and Transport, and Taku Ishii, Japanese Parliamentary Vice-Minister of Economy, Trade and Industry.

"Every effort to contribute to climate neutrality is important and no technology should be excluded. E-fuels constitute a necessary step towards the decarbonisation of industry and transport. Lithuania, with its large renewable energy potential, should take advantage of its convenient location next to Europe’s major industrial centres by becoming a significant producer of hydrogen and related synthetic fuels. Today's signing of the Berlin e-Fuels Declaration by the three countries is expected to give an even stronger impetus to international cooperation in the development of e-fuels," said Mr Skuodis.

CO₂ nearly neutral e-fuels are becoming increasingly important across all transport modes, including aviation, shipping, logistics. Synthetic fuels, also known as e-fuels or electro fuels, are liquid or gaseous fuels produced from renewable energy sources using chemical technologies.

Wind, hydro and solar energy are already being developed at an accelerating pace in Lithuania, and renewable energy capacity is expected to triple in the near future. By 2030, Lithuania aims to become a 100% green energy country and an exporter of surplus green energy. According to Minister Skuodis, Lithuania has the potential to become a significant player in the production and transport of green fuels in Europe, by producing e-fuels in several strategic companies in the country. It also has plans to increase production capacity to ensure the development of such fuels in the transport sector.

One of the key projects in recent years has been the development of a 100-hectare site in the southern part of the Port of Klaipėda and the creation of an off-shore wind farm to generate green electricity. The Port of Klaipėda is also preparing to develop infrastructure for the production and refuelling of green fuels (hydrogen).

The Declaration highlights the aspirations of Lithuania, Germany and Japan to develop international cooperation and contacts, as well as sharing experience in the development of e-fuel infrastructure. It emphasises the need to promote the production and use of renewable energy-based fuels in all areas of transport, and the efforts to create a regulatory environment conducive to transport innovations.

The document also says that e-fuels produced from renewable energy sources have a key role to play in contributing to both the zero-emission target by 2050 and a competitive, climate-neutral economy. The development of e-fuel production and infrastructure is seen as a promising way to combat climate change.

Currently, the cost of producing synthetic fuels (e-fuels) is still higher than fossil fuels, mainly due to the cost of renewable hydrogen and CO₂ capture technologies.

https://sumin.lrv.lt/

A. Armonaitė presents Lithuania's investment environment to Italian armaments manufacturer Leonardo

2024-06-04T12:10:07+03:00

On Monday, the Minister of the Economy and Innovation Aušrinė Armonaitė will meet with Stefano Pontecorvo, President of the Italian company Leonardo, and present the simplified regulatory framework for companies to develop defence and security industry activities in Lithuania.

"We have taken some bold decisions to improve the performance of the security and defence industry in Lithuania, from facilitating the ability to manufacture our own products for European defence to making it easier to develop major projects. Rheinmetall's ammunition plant and other foreign and Lithuanian companies are already benefiting from these changes. We are open to cooperation and welcoming new potential investors to our country," said the Minister of the Economy and Innovation A. Armonaitė.

Leonardo is a leading global Aerospace, Defence and Security (AD&S) company. It plays an important role in major international strategic programmes and is a trusted technology partner for institutions and companies.

“We are particularly proud of the opportunity given to us by Minister of Economy and Innovation Aušrinė Armonaitė to illustrate Leonardo's technological and production capabilities, both military and civilian, to the Lithuanian government,” Leonardo President Stefano Pontecorvo stressed. “I hope that fruitful cooperation will result from this meeting.”

Leonardo employs over 53,000 people worldwide. Last year, Leonardo generated revenues of €15.3 billion and new orders of €17.9 billion.

The Ministry of the Economy and Innovation is working hard to attract more foreign investment to Lithuania and strengthen the defence and security industry. One of the initiatives is the drafting of amendments to the laws relevant to the Lithuanian defence and security industry, which propose to remove excessive requirements for the development of the sector and to avoid dependence on foreign suppliers by reducing restrictions on the production of armaments.

The Seimas also approved the Ministry's proposal to simplify the procedures related to territorial planning, land parcel formation and construction for large-scale projects aimed at ensuring the urgent needs of national security and defence.

Previously, the indicative timeframe within which the necessary preparatory processes for a large-scale production project to meet the urgent needs of national security and defence could be carried out in Lithuania prior to the start of construction of production facilities was approximately 2-2.5 years. The amendments reduce this period to an estimated six months.

In addition, on the initiative of the Ministry, the restriction on defence activities in Lithuania's free economic zones (FEZs) has been removed. This will encourage companies to expand their activities and create good jobs.

https://eimin.lrv.lt/en/

S&P Global Ratings announces Lithuania’s credit rating

2024-06-03T15:47:57+03:00

On Friday evening, the international credit rating agency S&P Global Ratings changed the ‘A+’ long-term debt rating (negative outlook) previously granted to Lithuania to ‘A’ with a stable outlook, leaving the ‘A-1’ short-term debt rating in effect. The agency based its decision on geopolitical risks in the region due to the protracted war in Ukraine.

According to Standard & Poor’s methodology, after establishing a positive or negative outlook, the agency has two years to take a decision to upgrade or downgrade the country’s credit rating accordingly. In December 2022, the credit rating agency Standard & Poor’s changed Lithuania’s credit outlook from stable to negative (the ‘A+’ credit rating was granted to our country in February 2020) on the grounds of the protracted war in Ukraine. The adjusted rating of the agency remains in the higher investment rating group.

On Friday,the agency took the same decision for Latvia and Estonia, downgrading their credit ratings to ‘A’ and ‘A+’ respectively, with stable prospects.

“The decision of the credit rating agency was determined by the geopolitical situation in the region due to the ongoing Russian war against Ukraine. Lithuania takes its security seriously: over the past four years, in response to increased risks, we have doubled our defence spending, and we are currently discussing at political level additional sustainable sources of revenue that will allow us to increase defence spending to 3% of GDP”, says Minister of Finance Gintarė Skaistė.

Standard & Poor’s is of the opinion that Russia’s war against Ukraine and geopolitical risks in the region will affect Lithuania’s public finances, economic growth and competitiveness in the medium term. However, they acknowledge that these effects are difficult to predict.

Experts believe that risks will be offset by the accelerating economic recovery due to stronger domestic and foreign demand and continued prudent fiscal policy.

According to Standard & Poor’s analysts, Lithuania’s rating is strengthened by the country’s effective economic policies and membership of the euro area, as well as the low level of public debt. They forecast that the Lithuanian economy should return to growth of 2% this year.

The agency's latest report is available here.

After Standard & Poor’s changed Lithuania’s long-term credit rating, it equalised the ratings granted to our country by two other agencies, Fitch Ratings and Moody’s Investment Service (the values of credit ratings can be found here). Two weeks ago,Fitch Ratings reaffirmed Lithuania’s ‘A’ long-term credit rating granted in January 2020, leaving a stable outlook. In April this year, the same high credit rating – ‘A2’ (stable outlook) – was reaffirmed for Lithuania by credit rating agency Moody’s Investment Service (upgraded in February 2021), ‘A’ (high) with a stable outlook – by credit rating agency DBRS Morningstar (upgraded in November 2021).

More information on Lithuania’s credit ratings is available here.

Additional information:

A credit rating is an indicator that provides investors/creditors with consolidated information on the level of the borrower’s ability to meet its financial obligations. A high credit rating indicates a lower risk of default of the borrower/issuer and, accordingly, lower borrowing costs.

S&P Global Ratingsis part of a group of influential credit rating agencies such as Fitch Ratings and Moody’s Investors Service. They use certain classification and symbols to express credit ratings and to determine the credit value for borrowing countries and companies by using standardised credit ratings.

https://finmin.lrv.lt/