Lithuanian President Gitanas Nauseda said that he would rather see the government subsidise energy costs than raise defence spending to 3% of GDP in 2023, if there were not enough money for both.
“We must set our priorities very clearly: if our financial and macroeconomic situation allows it, I’d say that both priorities should be considered equally important,” Nauseda told reporters on August 31. “If we do not have the financial means to do so, I’d give preference to the financial stability of our people and their ability to survive this difficult energy period.”
Nauseda added, however, that modernising Lithuania’s armed forces and building infrastructure to host NATO troops was also “extremely important” and that he expected both priorities to be achievable.
“We have a relatively good economic situation and above-target budget revenue. This is why I believe that we might be able to implement both priorities at the same time,” he said.
Prime Minister Ingrida Simonyte has said that subsidising electricity and natural gas bills for households may cost the government between 500 million and a billion euros next year.
According to her, the government is currently drafting next year’s budget and will present it to President Nauseda and the parliamentary opposition once it is ready.
The government earlier this year allocated 570 million euros in budget funds to subsidise electricity and natural gas for households and businesses in the second half of 2022.
Around 370 million euros went to cover the debt of Ignitis, the public supplier, and about 200 million euros were allocated to natural gas and electricity suppliers.
In July, Lithuania’s parliamentary parties signed an agreement committing to keeping defence funding at least at 2.5% of GDP. There calls, however, to raise it to 3%.
Nauseda has earlier suggested that defence spending should be raised to 3% in 2023. (LRT/Business World Magazine)