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NextGenerationEU: European Commission endorses Lithuania's €2.2 billion recovery and resilience plan

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The European Commission has adopted a positive assessment of Lithuania's recovery and resilience plan. This is an important step towards the EU disbursing €2.2 billion in grants under the Recovery and Resilience Facility (RRF). This financing will support the implementation of the crucial investment and reform measures outlined in Lithuania's recovery and resilience plan. It will play a key role in enabling Lithuania to emerge stronger from the COVID-19 pandemic.

The RRF is at the heart of NextGenerationEU which will provide €800bn (in current prices) to support investments and reforms across the EU. The Lithuania plan forms part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.

The Commission assessed Lithuania's plan based on the criteria set out in the RRF Regulation. The Commission's analysis considered, in particular, whether the investments and reforms set out in Lithuania's plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.

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Commission President Ursula von der Leyen said: “I am delighted to present the European Commission's positive assessment of Lithuania's recovery and resilience plan. Lithuania's plan focuses on investments and reforms that will accelerate its digital and green transitions. This includes substantial investments in clean energy and high-speed internet networks that will make Lithuania's economy more sustainable, dynamic and innovative. With the support of NextGenerationEU, we can ensure that the benefits of the digital and green transitions are shared by all. We will stand by you every step of the way to ensure that your plan becomes a success.”

Securing Lithuania's green and digital transition 

The Commission's assessment finds that Lithuania's plan devotes 38% of its total allocation to measures that support the achievement of climate objectives. The plan  includes reforms and investments to develop renewable energy power plants and create public and private energy storage facilities. These measures are complemented by reforms and investments to phase out the most polluting road transport vehicles, increase the share of renewable energy sources in the transport sector and accelerate building renovations through supporting the production of modular elements for renovations from organic materials.  

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The Commission's assessment of Lithuania's plan finds that it devotes 32% of its total allocation to measures that support the digital transition. The plan includes considerable investments in connectivity, with a particular focus on the widespread deployment of high-speed networks and developing 2,000 km of high-speed connectivity infrastructure in rural and remote areas. The plan also envisages significant investments in e-governance and developing AI solutions for the Lithuanian language.

Reinforcing Lithuania's economic and social resilience

The plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Lithuania by the Council in the European Semester in 2019 and in 2020.

The resilience, quality, accessibility and efficiency of the healthcare system is expected to be improved thanks to the modernisation of health-care facilities, the development of centres of expertise in infectious diseases and the digitalization of the health-care system. The long-recognised challenges related to the efficiency and quality of the education system are tackled through consolidation of the school network, modernising general education, improving vocational education and training, as well as adult learning, improving the funding of higher education and the students' admission system as well as promoting research and internationalisation of universities. The merger of existing innovation promotion agencies is expected to make research and innovation policies more efficient. The reform of the guaranteed minimum income protection, together with the increase of the unemployment insurance scheme coverage, comprehensive revision of benefits and improvement of the pension indexation mechanism, is set to increase the adequacy of the social safety net and reinforce social resilience.

The plan represents a comprehensive and adequately balanced response to Lithuania's economic and social situation of Lithuania, thereby contributing appropriately to all six pillars referred to in the RRF Regulation.

Supporting flagship investment and reform projects

The Lithuanian plan proposes projects in all seven European flagship areas. These are specific investment projects, which address issues that are common to all Member States in areas that create jobs and growth and are needed for the twin transition. For instance, Lithuania has proposed to invest €242 million to develop offshore and onshore wind and solar power generation and create public and private energy storage facilities and to invest €341 million to phase out the most polluting road transport vehicles and increase the share of renewable energy sources in the transport sector.

The assessment also finds that none of the measures included in the plan significantly harm the environment, in line with the requirements laid out in the RRF Regulation.

The control systems put in place by Lithuania are considered adequate to protect the financial interests of the Union. The plan provides sufficient details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds.

An Economy that Works for People Executive Vice President Valdis Dombrovskis said: “Lithuania's recovery plan will boost its economic growth and put it on a sound footing for the future as Europe gears up for the green and digital transitions. It aims to modernize Lithuania's healthcare and education systems, strengthen social protection, and improve the efficiency of its tax and benefit system. We welcome the plan's focus on major projects of common European interest, particularly in clean energy – such as wind and solar power generation and phasing out polluting road transport vehicles. This plan will help Lithuania to emerge stronger after the crisis. We will stand by Lithuania to fully implemented it.”

Next steps

The Commission has today adopted a proposal for a Council Implementing Decision to provide €2.2 billion in grants to Lithuania under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission's proposal.

The Council's approval of the plan would allow for the disbursement of €289 million to Lithuania in pre-financing. This represents 13% of the total allocated amount for Lithuania.

The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress in the implementation of the investments and reforms. 

Economy Commissioner Paolo Gentiloni said: “Lithuania's plan will unlock €2.2 billion in European support for the country's efforts to tackle the challenges of the 21st century. Investments in electric car charging points and clean buses, building renovation and peatland restoration will give a strong boost to the country's climate and ecological efforts, while both the public and private sectors will benefit from the deployment of high-speed networks, including in remote areas. I particularly welcome the strong social dimension of the plan, with reforms aimed at improving the quality of education and healthcare, increasing the coverage of unemployment insurance and providing additional benefits for vulnerable groups.”

More information

Questions and Answers: European Commission endorses Lithuania's €2.2bn recovery and resilience plan

Recovery and Resilience Facility: Questions and Answers

Factsheet on Lithuania's recovery and resilience plan

Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Lithuania

Annex to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Lithuania

Staff-working document accompanying the proposal for a Council Implementing Decision

Recovery and Resilience Facility

Recovery and Resilience Facility Regulation

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HERA: First step towards the establishment of EU FAB, a network of ever-warm production capacities

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The Commission has published the Prior Information Notice, which provides vaccine and therapeutics manufacturers with preliminary information about the EU FAB call for competition, planned for early 2022. The objective of EU FAB is to create a network of ‘ever-warm' production capacities for vaccine and medicine manufacturing that can be activated in case of future crises. EU FAB will cover multiple vaccine and therapeutic technologies. To be operational at all times, the participating production sites are expected to ensure availability of qualified staff, clear operational processes and quality controls, allowing the EU to be better prepared and respond to future health threats. EU FAB will be able to quickly and easily activate its network of manufacturing capacities to meet demand for vaccines and/or therapeutics needs, until the market has scaled up production capacities. EU FAB will form a key component of the industrial dimension of the European Health Emergency Preparedness and Response Authority (HERA), as announced in the Communication Introducing HERA, the next step towards completing the European Health Union, on 16 September. The Prior Information Notice on the EU FAB is available here.

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Poland ordered to pay the European Commission half a million euro daily penalty over Turów mine

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The European Court has placed a daily fine of €500,000 on Poland to be paid to the European Commission over its failure to respect an order from 21 May to stop extraction activities at Turów open-cast lignite mine, writes Catherine Feore.

The mine is located in Poland, but is close to the Czech and German borders. It was granted a concession to operate in 1994. On 20 March 2020, the Polish climate minister granted permission for an extension to lignite mining until 2026. The Czech Republic referred the matter to the European Commission and on 17 December 2020, the Commission issued a reasoned opinion in which it criticized Poland for several breaches of EU law. In particular, the Commission considered that, by adopting a measure allowing a six-year extension without carrying out an environmental impact assessment, Poland had breached EU law. 

The Czech Republic asked the court to make an interim decision, pending the final  judgment of the Court, which it granted. However, since the Polish authorities failed to comply with its obligations under that order, the Czech Republic, on 7 June 2021, made an application seeking that Poland be ordered to pay a daily penalty payment of €5,000,000 to the EU budget for failure to fulfil its obligations. 

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Today (20 September) the court rejected an application by Poland to overturn the interim measures and ordered Poland to pay the Commission a penalty payment of €500,000 per day, one tenth of what was requested by the Czech Republic. The Court said that they were not bound by the amount proposed by the Czech Republic and thought the lower figure would be adequate to encourage Poland “to put an end to its failure to fulfil its obligations under the interim order”.

Poland claimed that the cessation of lignite mining activities in the Turów mine could cause an interruption in the distribution of heating and drinking water in the territories of Bogatynia (Poland) and Zgorzelec (Poland), which threatens the health of the inhabitants of those territories. The court found that Poland had not sufficiently substantiated that this represented a genuine risk.

Given Poland’s failure to comply with the interim order, the Court found that it had no choice but to impose a fine. The CJEU has underlined that it is very rare that a member state brings an action for failure to fulfil obligations against another member state, this is the ninth such action in the history of the Court.

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€7 billion for key infrastructure projects: Missing links and green transport

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A call for proposals launched under the Connecting Europe Facility (CEF) for Transport programme is making €7 billion available for European transport infrastructure projects. The majority of projects funded under this call will help to increase the sustainability of our overall transport network, putting the EU on track to meet the European Green Deal objective of cutting transport emissions by 90% by 2050.

Transport Commissioner Adina Vălean, said: “We are massively increasing funds available for deployment of alternative fuels infrastructure, to €1.5 billion. For the first time, we are also supporting projects so that our trans-European transport networks are suitable for civilian-defence dual-use and improve military mobility across the EU. Projects funded under yesterday's call will contribute to the creation of an efficient and interconnected multimodal transport system for both passengers and freight, and the development of infrastructure to support more sustainable mobility choices.”

The EU needs an efficient and interconnected multimodal transport system for both passengers and freight. This must include an affordable, high-speed rail network, abundant recharging and refuelling infrastructure for zero-emission vehicles, and increased automation for greater efficiency and safety. Further information is available online.

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