Lithuania's budget for 2017 is being planned with a small deficit that the European Commission is expected to approve if the country's new Labour Code and other social protection system changes are recognized as structural reforms, Finance Minister Rasa Budbergytė said on Wednesday.
Rasa Budbergytė
© DELFI / Šarūnas Mažeika

"We have (a budget deficit of) 398 million euros. This is strictly in compliance with the rule that does not allow us to have more expenses," the minister told members of the parliament's Budget and Finance Committee, while presenting next year's draft budget.

"There will be a deficit of 0.6 percent (of GDP), which the European Commission will likely deem permissible if the Labour Code is regarded and counts as a structural reform," she said.

In Budbergytė's words, next year's budget contains commitments to increase national defense spending and to allocate funds for measures that are part of the new social model.

"We are projecting a small deficit, because there are two key priorities that we stick to. Our draft budget earmarks 150 million euros for national protection and defense as we move closer to the 2 percent (of GDP target) in line with our international commitments to NATO. Another very large portion, 254 million euros, is for the social model," the minister said.

She added that raising the minimum wage and the non-taxable personal income tax threshold would cost the state another 144 million euros.

The government plans to start discussing next year's draft budget on October 10, a day after the first round of general elections. The bill is to be submitted to the Seimas by October 17.

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