EU joins criticism of Lithuania's 2016 budget

By bne IntelliNews November 17, 2015

The European Commission reported on November 17 that Lithuania's 2016 budget may not meet requirements of the EU Stability and Growth Pact (SGP) due to overly optimistic assumptions on growth and budget revenue.

The criticism, published alongside opinions from the EU executive on the financial plans for next year submitted by 16 Eurozone countries, only adds to the doubt surrounding the budget put forward by Vilnius. The Lithuanian National Audit Office offered similar warnings on November 16.

Although none of the 16 budget plans was found to be in particularly serious non-compliance, Estonia and Slovakia submitted plans that are compliant with the targets; Latvia's draft budget is "broadly compliant".

Lithuania was joined by Austria and Italy in presenting budgets that the EU says are "at risk of non-compliance with the requirements for 2016 under the SGP".

“The Commission … invites the authorities to take the necessary measures within the national budgetary process to ensure that the 2016 budget will be compliant with the SGP,” it said in a statement.

Lithuania’s National Audit Office claimed the day before that the budget is “on the brink of violating fiscal rules,” and hampers the potential to deal with financial shocks. The body criticised the government’s mid-term proposal for 2016-2018 for a deficit of around 1% of GDP per year. It insists the deficit should be limited to 0.5% to ensure long-term financial stability. 

The audit office also criticised the bill for overly optimistic projections for tax revenue. The finance ministry rejected the auditors’ claim, saying the forecasts are “very conservative”.

Cyprus and Greece did not submit plans as they are under economic adjustment programmes. Portugal missed the deadline,, while an opinion has already been issued on Spain's budget.

Related Articles

Agreements with Armenia highlight of uneventful EU Eastern Partnership summit

The EU and Armenia signed a comprehensive and advanced partnership agreement and a common aviation area agreement at the Eastern Partnership summit on November 24, according to an ... more

EU calls for tax haven blacklist in Paradise Papers fallout

The finance ministers of the European Union member states have called for the creation of a blacklist of tax havens to crack down on tax dodging, the ministers said at a meeting in Brussels on ... more

Labour productivity exceeds growth of labour costs in Estonia in H1

Labour productivity increased faster than the growth of labour costs in the Estonian business sector in the first half of the year, Eesti Pank (The Bank of Estonia) announced on October 25. ... more

Dismiss