Implementing decision 2020/1350 - Granting of temporary support to Lithuania to mitigate unemployment risks following the COVID-19 outbreak - Main contents

EN

Official Journal of the European Union

L 314/35

On 7 August 2020, Lithuania requested financial assistance from the Union with a view to complementing its national efforts to address the impact of the COVID-19 outbreak and respond to the socioeconomic consequences of the outbreak for workers and the self-employed.

The COVID-19 outbreak and the extraordinary measures implemented by Lithuania to contain the outbreak and its socioeconomic and health-related impact are expected to have a dramatic impact on public finances. According to the Commission’s 2020 Spring forecast, Lithuania was expected to have a general government deficit and debt of 6,9 % and 48,5 % of gross domestic product (GDP) respectively by the end of 2020. According to the Commission’s 2020 Summer interim forecast, Lithuania’s GDP is projected to decrease by 7,1 % in 2020.

The COVID-19 outbreak has immobilised a substantial part of the labour force in Lithuania. This has led to a sudden and severe increase in public expenditure in Lithuania in respect of wage subsidies during and after time without work and benefits for the self-employed, including benefits for the self-employed engaged in agricultural activities, as set out in recitals (4) to (7).

‘Law on Employment No XII-2470’, which is referred to in Lithuania’s request of 7 August 2020, introduced a scheme to pay subsidies to employers to cover estimated wages for each employed person facing time without work. The employer could choose between subsidies to cover 70 % of the salary, up to a maximum of 1,5 times the minimum wage, or 90 % of the salary (100 % in the case of employees aged 60 and above), up to a maximum of the minimum wage. Employers that have participated in the scheme must retain at least 50 % of their employees for at least three months after the pay subsidy ends.

Subsidies are also paid for employees returning from time without work, for up to six months following their return to work. Subject to a cap of the minimum wage or two times the minimum wage, depending on the economic activity carried out by the employer, the amount of the subsidies paid in the first and second months following return can be as high as 100 % of an employee’s salary, in the third and fourth months, 50 %, and in the fifth and sixth months, 30 %. Those subsidies can be considered to be a similar measure to short-time work schemes, as referred to in Regulation (EU) 2020/672, as they aim to provide income support to employees and help maintain existing employment relationships.

The authorities have also introduced benefits for the self-employed, including the self-employed engaged in agricultural activity with an agricultural holding or farm of no less than four economic size units, amounting to EUR 257 a month and paid during the quarantine period and the following two months. The benefits for the self-employed can be considered to be a similar measure to short-time work schemes, as referred to in Regulation (EU) 2020/672, as they aim to protect the self-employed or similar categories of workers from a reduction in or loss of...