Finance

The Government approved the Economy Stimulation Plan (ESP) prepared by the Ministry of Economy providing for 5.7 billion litas support for business. The Plan is expected to slow down the decline in the Lithuanian economy and help to preserve businesses and jobs. Within two weeks, a detailed list of the tasks of the plan must be completed along with their implementation terms, and executors of tasks appointed.

The Government approved this plan after a public discussion and debate with the associated business entities. They submitted over 200 specific proposals to the Ministry for the stimulation of the economy and improvement of business environment, many of which are included in the plan of the ESP means.

Business stimulation plan consists of five parts: expansion of business funding opportunities; extension of energy efficiency of buildings, accelerated use of the EU structural assistance; improvement of business environment (Saulėtekis); promotion of export and investment. They include measures to revive the country’s credit market, to accelerate and simplify the assimilation of structural support of the European Union (EU) and to preserve jobs. The plan also provides for substantial improvement of the business environment and facilitation of exports and investments.

The plan provides that the holding fund, "Investment and Business Guarantees" (INVEGA), the facilities of Agricultural Credit Guarantees and Employment Fund will be used for the access of financial resources to the market. Business Fund will aim to accumulate at least 1.3 billion litas, the possibility of using them will be granted to all banks operating in Lithuania. The Government will give at least 100 million litas to small loans amounting to 175 thousand litas. They will be available for business in April-May 2009.

Increasing of energy efficiency of buildings is one of the priorities in the state project plan. It is provided that the Government will implement a programme of insulation of public buildings valued at 0.8 billion litas and funded from the municipalities and the EU structural funds, with particular focus on the renovation of schools. It will also seek to implement at a rapid pace the multi-apartment house modernization program worth 1 billion litas, which will substantially increase energy efficiency of multi-apartment houses. The Government will propose financing mechanisms of renovation to attract bank funds, and the total amount of funds will amount to 3 billion litas.

The Government will seek to absorb 5 billion litas of the EU structural funds in place of the planned 3.3 billion litas until the end of this year. It is planned that submitted invoices could be paid in advance.

ESP also provides the means for the program of improvement of business environment. Among others, there are suggestions of registering businesses online, creating a tax credit system for persons starting small family businesses, simplification of legal regulations of private limited-liability companies. The Government will also reduce a list of business controlling authorities, by closing or merging some of them.

In order to help the exporting businesses to cope with the increased risk of export, the Government is to double the EU structural funds intended for the projects of companies in finding foreign markets and the increase of business internationalization. In the year 2009 this will total to 100 million litas.