European Structural and Investment Funds in Lithuania

Excerpt from the COM(2015) 639 final, ANNEX II: Country fiches

1. ESIFs in Lithuania

Economic and social challenges in the ESIF context

Lithuania’s economy has shown a remarkable ability to regain competitiveness following the crisis. This has supported solid growth in recent years. To ensure sustainable and inclusive growth over the longer term, however, the country will need to address a number of issues.

The first relates to its capacity to move up the added-value chain. The Lithuania's labour market is held back by constraints on the supply of human capital and skills. The working-age population is shrinking rapidly and participation in the labour market remains relatively low. There is a high risk that skills shortages could worsen over time. The proportion of the population at risk of poverty or social exclusion remains high and inequalities are increasing. Private-sector investment, in particular in R&I, is low, which can inhibit long-term growth. Lithuania needs to continue improving security of energy supply and increasing competition in its energy market. Energy intensity is high, making Lithuania one of the least energy- efficient countries in the EU. Analysis of the national Europe 2020 targets shows significant gaps in increasing R&I spending, improving employability and meeting energy targets. These shortcomings are reflected in the European Semester policy recommendations.

Main priorities and results

The ESIF will contribute to improving the innovativeness and competitiveness of the economy and to strengthening the links between R&I and industrial policies. R&D expenditure per capita in the business sector is expected to reach EUR 60.7 by 2023 (EUR 24.1 in 2011). This will be achieved by strengthening R&I systems in businesses and promoting R&D knowledge transfer between academia and businesses.

EUR 1.2 billion of support for SMEs and agricultural, aquaculture and fishery holdings will be used to help increase the number of enterprises per 1000 inhabitants from 39 in 2013 to 48 in 2023 and the level of productivity and added value to EUR 17 726 per employee per year (EUR 12 432 in 2013). It will also contribute to modernising and improving the economic performance of nearly 8 000 small and medium-sized farms, and to financing the start-up costs of more than 1 100 new young farmers. The ESIFs will also be used to improve the business environment, by making it easier to set up a business, improving SMEs' access to finance and providing tailor-made business services.

The ESIF will help tackle unemployment, improve the quality of education and training and ensure that labour market demand is better met by increasing the level of qualifications and skills of the active labour force and preventing early school-leaving. A total of 55 000 unemployed people will take part in schemes designed to help them return to the open labour market. The ESF will contribute to the creation of 1 800 new jobs in new businesses and support the participation of 5 000 disabled people in professional rehabilitation programmes. As a result, the employment rate for the working population (aged 20-64) is expected to reach 72.8 % in 2023 (69.9 % in 2013). The tertiary attainment rate already being good, and the early school-leaving rate having been reduced, ESIF will be directed to improving the quality of education and its labour-market relevance and to better adjust skills supply with demand. The funds will help to increase adult participation in lifelong learning from 5.7 % in 2013 to 8 % in 2017. More than 60 000 people working in agriculture and forestry will receive training, with the aim of improving the competitiveness of these sectors.

The ESIFs will also be used to help reduce poverty and improve social inclusion. Specifically, the investment will help those furthest from the labour market to return to employment, to increase the participation of older workers in the labour market, and to improve access to and the quality of social and healthcare services. These measures will help to reduce the number of people at risk of poverty or social exclusion by 100 000 by 2020.

EUR 1.4 billion will be allocated to energy and climate change. The measures financed will contribute to a reduction in greenhouse gases of 600 000 tonnes CO2 eq./year. Final energy consumption in the service and household sectors is expected to drop by 7.56 GWh by 2023 and the energy intensity of industry is expected to fall to 1.778 MWh/EUR by 2023 (from 2.592 MWh/EUR in 2012). Investment in energy infrastructure will help to strengthen integration into the EU internal energy market.

EUR 1 billion of investment allocated to transport will extend the TEN-T networks and improve the accessibility. This allocation will allow 300 km of roads and 70 km of railways to be built or renovated, reduce the number of accidents and improve connections between different modes of transport.

EUR 0.9 billion of investment will be allocated to environmental measures and improving resource efficiency. The proportion of municipal waste disposed in landfill will fall substantially (from 78 % in 2011 to 35 % in 2023). The funds will be used to support the environment- and climate-friendly land management practices, including organic farming, on 11% of farmland and the extension of sustainable forestry, thus helping to protect biodiversity. The use of sustainable methods will be extended in fisheries and aquaculture, improving marine ecosystems and aquatic biodiversity in line with the new Common Fisheries Policy. Unwanted catches will be reduced by 43 tonnes and levels of production from organic aquaculture will reach 2 000 tonnes in 2023.

Use of financial instruments and territorial tools

Over EUR 700 million is expected to be made available via financial instruments, and targeted in particular at energy efficiency, SMEs and self-employment. This represents an increase of more than 50 % on the 2007-2013 programming period.

Urban authorities will be responsible for managing EUR 210 million of investment, mainly to be allocated to sustainable urban development and economic and social regeneration. The implementation of local development strategies worth around EUR 100 million in all rural and coastal, and some urban, areas will strengthen local partnerships.

Key information

2. Pre-conditions for effective and efficient use of ESIFs

In accordance with the agreed action plans, Lithuania has adopted the strategies and other policies needed and fulfilled all the ex ante conditionalities.

3. ESIF management

The ERDF, ESF and Cohesion Fund are part of a single programme managed by the Ministry of Finance. The EAFRD and EMFF have separate programmes, but are both managed by the Ministry of Agriculture. The managing authorities are members of each other's monitoring committees, thus ensuring close coordination between the ESIFs. A range of complementary EU (e.g. Horizon 2020) and national policy instruments will be used to maximise the benefit gained from the ESIFs.

4. Simplification for beneficiaries

Lithuania plans to simplify the procedures for all the ESIFs to make greater use of simplified costs options and to improve the IT systems available to beneficiaries (e.g. by creating a single access point, improving the quality of information and providing online forms). 

Source: COM(2015) 639 final, ANNEX II: Country fiches to the Communication from the Commission Investing in jobs and growth - maximising the contribution of European Structural and Investment Funds, Brussels, 14.12.2015.