LithuaniaEconomy & Finance

The new EU budget – a real threat to Lithuania

EU Budget

Next year will be a turning point for Lithuania from a financial point of view.

Since re-gaining independence, Lithuania received significant support via EU funds. The EU helped a young country to grow stronger and decrease its dependence on Russia.

Many projects started by the country decades ago were successfully financed by European funds. Such assistance was made possible to help develop the economy at a fast rate.

Year on year, Lithuania became increasingly confident in its capabilities, and its inhabitants strongly believed in its European future. EU financial aid helped to start the decommissioning of the old Ignalina nuclear power plant and the building of Rail Baltica, the first high-speed rail line linking the three Baltic countries, amongst many other projects.

Brussels has already allocated 1.5 billion Euros to the Ignalina power plant as part of the current budget up to 2020. But the decommissioning process is only half way through. Lithuania desperately needs at least the same amount of money to safely finish the project. In late 2017, the Lithuanian press reported that background radiation levels at the plant had increased. Confusingly, a spokeswoman for the Lithuanian Energy Minister denied these reports this year in March, but the situation remains alarming nevertheless.

The new EU budget for the next seven years could become a real threat to Lithuania’s position in this regard. It is no secret that the EU is experiencing financial difficulties (SOURCES? More information to explain this needed). Brexit may also cause further financial cuts to the budget. Therefore, the financial outlook for Lithuania is not very encouraging. Its main donor, the EU, will inevitably decrease financial aid. Even now the European authorities stress the necessity of financing Lithuanian projects mainly at their own expense.

Meanwhile, a lack of funding has not prevented Lithuania from increasing its defence budget, with this year’s annual defence budget amounting to 873 million Euros. This is an increase of 149.2 million Euros from 2017.

If instead Lithuania redirected this amount of money annually to such vital project like the decommissioning of Ignalina, the country would easily afford to close the plant during the next 20 years without external assistance. If one compares the necessity of closing the plant and the necessity of buying containers, trucks, military equipment, vehicle spare parts (the biggest purchases projected for 2018 according to the Ministry of Defence), the priorities are clear.

Maybe the Lithuanian authorities should reconsider the country’s priorities? With all this potential additional money, Lithuania could close a dangerous nuclear plant and build a modern railway without asking the EU or other sponsors for money. Let us think about it.

Author: Adomas Abromaitis | Editor: Lidija Liegis

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