Week in Lithuania | LTG Link secures 200-million-euro loan for train purchase; MPs open debate on tighter regulation for foreign workers

Last weekend, President backed higher corporate income tax for defence funding; IMF curtailed Lithuania’s 2024 GDP growth forecast to 2.2%.
US-led military exercise Saber Strike starts Lithuania
Saber Strike, a military exercise organized by the US Armed Forces, kicks off in Lithuania on Friday, the 19th of April. Approximately 600 US troops and 120 wheeled tactical vehicles redeployed from Poland will take part in the exercise, which will also involve elements of the Lithuanian Land Force and the rotational US battalion in Lithuania. They will jointly conduct live fire training. The exercise is organised by the US Armed Forces in central and eastern parts of Europe. This year’s exercise covers Germany, Poland and Lithuania and runs from the 8th to the 30th of April. The aim of the exercise is to demonstrate the ability to rapidly redeploy elements of the land force to another region, reinforce existing land force units and achieve a deterrent effect.
LTG Link signs 200-million-euro loan agreements with NIB, EIB for train purchase
LTG Link, the passenger arm of Lithuania’s state railway group Lietuvos Geležinkeliai (Lithuanian Railways, LTG), on Friday, the 19th of April, signed loan agreements, worth 200 million euros, with the Nordic Investment Bank (NIB) and the European Investment Bank (EIB). “NIB and EIB will provide loans of 100 million euros each to finance acquisition of nine electric and six battery-powered trains, which will replace around one third of the passenger train fleet,” LTG said in a press release. In June 2023, LTG Link announced it would purchase 15 new electric and battery-powered trains from Stadler Polska, the Polish subsidiary of the Swiss rolling stock manufacturer Stadler Rail, for a total of 226.5 million euros, and signed a respective contract. LTG then said that the first trains were scheduled to be delivered to Lithuania in 2025, and passengers would be able to travel on them as early as the middle of 2026, with all 15 procured trains expected to be running in 2027.
MPs kick off debate on tighter requirements for foreign workers
The parliament started on Thursday, the 18th of April, debating a legislative package tightening the requirements for foreign nationals coming to work in Lithuania and for their employers. The amendments to the Law on the Legal Status of Aliens and the Law on Employment on Thursday passed the first reading in the Seimas with 95 voters in favour, none against and 14 abstentions. The package was tabled to the parliament by the Interior Ministry. Interior Minister Agne Bilotaitė said that the number of foreign nationals coming to live in Lithuania is increasing, which begins to pose additional challenges, primarily related to national security. If the legislation is passed, companies will be required to hold the necessary licenses, not to have been penalised for not reporting changes in data or providing false data, also impose an obligation on employers to employ foreign nationals on a full-time basis and would reinstate the requirement for employers to provide information on foreign employees’ qualifications and experience.
ECHR rejects Kirkorov’s complaint on not being allowed to Lithuania
The European Court of Human Rights (ECHR) decided on Thursday, the 18th of April, to reject a complaint from Russian pop star Philipp Kirkorov against the migration authority’s decision to ban him from entering Lithuania. The Strasbourg-based court found that Kirkorov’s application was “inadmissible”, according to a press release published by the Court on Thursday. To substantiate its decision, the ECHR cited arguments that by regularly giving concerts in Crimea, Kirkorov supported the Russian State’s policy of aggression and that he referred to himself as Vladimir Putin’s “representative on stage”. According to the Court, the ban on Kirkorov’s entry into Lithuania was not disproportionate in view of national interests, public policy interests and the applicant’s actions. Lithuania’s Supreme Administrative Court (LVAT) dismissed the Russian pop star’s appeal against the entry ban in the fall of 2021. In the ruling, which was final and not subject to appeal, the court acknowledged that Kirkorov’s actions posed a threat to national security. Kirkorov was blacklisted in Lithuania at the Foreign Ministry’s request in January 2021.
President endorses increasing corporate income tax for defence funding
President Gitanas Nausėda said on Wednesday, the 17th of April, that he supports additional taxation on corporate income but stresses that he is “categorically against” raising the value-added tax (VAT). The government intends to set up a special fund for defence, to be resourced from proceeds from higher taxes, in order to increase the fixed funding for national defence from 2.5 to 3% of gross domestic product (GDP). The Cabinet is also expected to draft proposals in the coming weeks on how and which taxes to change. The President did not specify which corporate income tax rate he would support. However, he reiterated his opposition to the previously proposed idea of reducing the municipalities’ budgets.
IMF curtails Lithuania’s 2024 GDP growth forecast to 2.2 %
The International Monetary Fund (IMF) revised Lithuania’s 2024 economic growth forecast down to 2.2%, from 2.7% projected last October, IMF announced on Tuesday, the 16th of April. The country’s 2025 GDP growth forecast was downgraded as well – to 2.5%, from 2.6%. Both the global and Lithuanian economies have weathered the consequences of Russia-induced energy price shock quite well. However, a critical long-term challenge is now emerging: the declining economic potential due to slow productivity growth, ageing populations and geopolitical fragmentation, the central Bank of Lithuania quoted its governor, Gediminas Simkus, as saying. According to the latest forecasts published by the IMF on Tuesday, average annual inflation in Lithuania is decelerating faster than projected by the Fund last fall and is now expected to reach 1.5% this year, instead of 3.9% forecast in October. Next year, it should reach 2.3%, instead of 3% envisaged in the IMF’s autumn forecast.
Lithuania, Rheinmetall sign letter of intent on ammunition factory
The Lithuanian government and Germany’s defence industry giant Rheinmetall signed in Vilnius on Tuesday, the 16th of April, a letter of intent on the construction of an ammunition factory in the country. The document was signed by Economy and Innovation Minister Aušrinė Armonaitė, Defence Minister Laurynas Kasciūnas, and Maximilian Froch, Director of Strategic Program Organisation International at Rheinmetall. The content of the document is not yet public. At the ceremony, Prime Minister Ingrida Šimonytė used a quote from Ukrainian President Volodymyr Zelensky, who has said that “freedom must be better armed than tyranny”. Armonaitė said that Rheinmetall’s investment will be one of the largest in Lithuania’s history and the largest among defence industry companies. According to the minister, Rheinmetall’s investment shows that the German company “trusts Lithuania’s talented people and believes that Lithuania is a safe country for significant investments”. Government officials have confirmed that state-owned land in the northern district of Radviliškis is being considered as one of possible sites for Rheinmetall’s factory.
Lithuania prefers to pay, rather than accept migrants
Lithuania should pay 3.16 million euros rather than taking in 158 migrants assigned to the country under the EU’s migration reform, Irena Šegalovičienė, Gitanas Nausėda’s chief economic and social policy advisor, told the Žinių Radijas radio station, said on Tuesday, the 16th of April. Under the EU’s migration reform package approved by the European Parliament last week, Lithuania would have to take in around 158 migrants or pay 3.16 million euros annually. These figures were announced by Interior Minister Agne Bilotaitė. According to the advisor, Lithuania is already facing migration challenges after having admitted Ukrainian, Belarusian, and Russian migrants. Although 158 migrants are not a large number, it would still cost the state to ensure their accommodation, integration, and well-being, Šegalovičienė said.
Lithuania’s second offshore wind farm tender collapsed
Lithuania’s second 700 megawatt (MW) offshore wind farm tender fell through as only one bid was received, the National Energy Regulatory Council (NERC) said on Monday, the 15th of April. The minimum number of bids was set at two. The second auction was considered more attractive by market participants and experts because it offered a 15-year state incentive to the winning bidder. Ignitis Renewables, which previously had no such plans, earlier on Monday confirmed having submitted its bid for the second offshore wind tender.
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