Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2020/1350 granting temporary support pursuant to Regulation (EU) 2020/672 to the Republic of Lithuania to mitigate unemployment risks in the emergency following the COVID-19 outbreak
Date: 2021-03-29
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU loan, Lithuania, aid to undertakings, coronavirus disease, emergency aid, employment aid, epidemic, fight against unemployment, public expenditure, self-employed person

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   EUROPEAN COMMISSION  Brussels, 29.3.2021  COM(2021) 164 final 2021/0087 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2020/1350 granting temporary support pursuant to Regulation (EU) 2020/672 to the Republic of Lithuania to mitigate unemployment risks in the emergency following the COVID-19 outbreak  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Council Regulation (EU) 2020/672 (“SURE Regulation”) lays down the legal framework for 
providing  Union  financial  assistance  to  Member  States,  which  are  experiencing,  or  are 
seriously threatened with, a severe economic disturbance caused by the COVID-19 outbreak. 
Support  under  SURE  serves  for  the  financing,  primarily,  of  short-time  work  schemes  or 
similar measures aimed at protecting employees and the self‐ employed and thus reducing the 
incidence of unemployment and loss of income, as well as for the financing, as an ancillary, 
of some health-related measures, in particular in the workplace. 

On 25 September 2020 the Council granted financial assistance to  Lithuania 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. 

On 11 March 2021,  Lithuania submitted a new request  for Union financial  assistance under 
the SURE Regulation.  

In accordance with Article 6(2) of the SURE Regulation, the Commission has consulted the 
Lithuanian  authorities  to  verify  the  sudden  and  severe  increase  in  actual  and  planned 
expenditure directly related to Lithuania’s labour market measures and caused by the COVID-
19 pandemic. In particular, the increased expenditure for which additional financial assistance 
is being requested pertains to existing measures referred to in Council Implementing Decision 
(EU) 2020/1350: 

(a) 

(b) 

(c) 

a scheme to pay subsidies to employers to cover estimated wages for each employed 
person facing time without work. Before 1 January 2021, 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. From 1 January 2021, the employer 
can receive subsidies to cover 100% of the salary, up to a maximum of 1.5 times 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; 

a scheme to pay subsidies 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  could  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; 

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. 
In  2020,  the  benefit  amounted  to  EUR  257  and  was  paid  during  the  period  of  the 
quarantine and state emergency and the following two months. In 2021, the benefit 
amounts  to  EUR  260  and  is  paid  during  the  period  of  the  quarantine  and  state 

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emergency  and  one  month  after.  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 income; 

Lithuania provided the Commission with the relevant information.  

Taking into account the available evidence, the Commission proposes to the Council to adopt 
an  Implementing  Decision  to  grant  financial  assistance  to  Lithuania  under  the  SURE 
Regulation in support of the measures above.  

• 

Consistency with existing policy provisions in the policy area 

The present proposal is fully consistent with Council Regulation (EU) 2020/672, under which 
the proposal is made. 

The present proposal comes in addition to another Union law instrument to provide support to 
Member States in case of emergencies, namely Council Regulation (EC) No 2012/2002 of 11 
November 2002 establishing the European Union Solidarity Fund (EUSF) (“Regulation (EC) 
No 2012/2002”). Regulation (EU) 2020/461 of the European Parliament and of the Council, 
which amends that instrument to  extend its  scope to  cover major public  health emergencies 
and to define specific operations eligible for financing, was adopted on 30 March.   

• 

Consistency with other Union policies 

The proposal is part of a range of measures developed in response to the current COVID-19 
pandemic  such  as  the  “Coronavirus  Response  Investment  Initiative”,  and  it  complements 
other  instruments  that  support  employment  such  as  the  European  Social  Fund  and  the 
European Fund for Strategic Investments (EFSI)/InvestEU. By making use of borrowing and 
lending in this particular case of the COVID-19 outbreak for supporting Member States, this 
proposal  acts  as  a  second  line  of  defence  to  finance  short-time  work  schemes  and  similar 
measures,  helping  protect  jobs  and  thus  employees  and  self-employed  against  the  risk  of 
unemployment.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The legal basis for this instrument is Council Regulation (EU) 2020/672.   

• 

Subsidiarity (for non-exclusive competence)  

The  proposal  follows  a  Member  State  request  and  shows  European  solidarity  by  providing 
Union financial assistance in the form of temporary loans to a Member State affected by the 
COVID-19  outbreak.  As  a  second  line  of  defence,  such  financial  assistance  supports  the 
government’s increased public expenditure on a temporary basis in respect of short-time work 
schemes  and  similar  measures  to  help  them  protect  jobs  and  thus  employees  and  self-
employed against the risk of unemployment and loss of income. 

Such  support  will  help  the  population  affected  and  helps  to  mitigate  the  direct  societal  and 
economic impact caused by the present COVID-19 crisis.  

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• 

Proportionality 

The proposal respects the proportionality principle. It does not go beyond what is necessary to 
achieve the objectives sought by the instrument.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the 
Council, a stakeholder consultation could not be carried out. 

• 

Impact assessment 

Due to the urgent nature of the proposal, no impact assessment was carried out. 

4. 

BUDGETARY IMPLICATIONS 

The  Commission  should  be  able  to  contract  borrowings  on  the  financial  markets  with  the 
purpose  of  on-lending  them  to  the  Member  State  requesting  financial  assistance  under  the 
SURE instrument.  

In  addition  to  the  provision  of  Member  State  guarantees,  other  safeguards  are  built  into  the 
framework in order to ensure the financial solidity of the scheme: 

 

 

A rigorous and conservative approach to financial management; 

A  construction  of  the  portfolio  of  loans  that  limits  concentration  risk,  annual 
exposure and excessive exposure to individual Member States whilst ensuring 
sufficient resources could be granted to Member States most in need; and 

 

Possibilities to roll over debt. 

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2021/0087 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

amending Implementing Decision (EU) 2020/1350 granting temporary support pursuant 
to Regulation (EU) 2020/672 to the Republic of Lithuania to mitigate unemployment 
risks in the emergency following the COVID-19 outbreak 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having regard to Council Regulation (EU) 2020/672 of 19 May 2020 on the establishment of 
a  European  instrument  for  temporary  support  to  mitigate  unemployment  risks  in  an 
emergency (SURE) following the COVID-19 outbreak1, and in particular Article 6(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

On  25  September  2020,  the  Council  granted  financial  assistance  to  Lithuania  taking 
the  form  of  a  loan  amounting  to  a  maximum  of  EUR 602 310 000  with  a  maximum 
average maturity of 15 years, following the Lithuania’s request of 7 August 2020, with 
a view to complementing its national efforts to address the impact of the COVID-19 
outbreak and respond to the socio-economic consequences of the outbreak for workers 
and the self-employed.  

The loan was to finance the short-time work schemes and similar measures adopted by  
Lithuania, as referred to in Council Implementing Decision (EU) 2020/13502.  

The COVID-19 outbreak continues to immobilise a substantial part of the labour force 
in Lithuania. This has led to a still sudden and severe increase in public expenditure by 
Lithuania  in  respect  of  the  measures  referred  to  in  Article  3(a)  and  (b)  of 
Implementing Decision (EU) 2020/1350.  

The COVID-19 outbreak and the extraordinary measures implemented by Lithuania in 
2020  and  2021  to  contain  the  outbreak  and  its  socio-economic  and  health-related 
impact  had  and  still  have  a  dramatic  impact  on  public  finances.  According  to  the 
Commission's  2020  autumn  forecast,  Lithuania  was  expected  to  have  a  general 
government  deficit  and  debt  of  8.4%  and  47.2%  of  gross  domestic  product  (GDP) 
respectively by the end of 2020. In 2021, Lithuania’s general government deficit and 
debt  are forecast  to  stand at  6.0% and 50.7% of GDP respectively. According to  the 
Commission’s 2021 winter interim forecast, Lithuania’s GDP is projected to increase 
by 2.2% in 2021. 

(5) 

On 11 March 2021, Lithuania requested further financial assistance from the Union in 
an  amount  of  EUR 354 950 000  with  a  view  to  continue  complementing  its  national 

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OJ L 159, 20.5.2020, p. 1. 
Council Implementing Decision (EU) 2020/1350 of 25 September 2020 on granting temporary support 
under  Regulation  (EU)  2020/672  to  the  Republic  of  Lithuania  to  mitigate  unemployment  risks  in  the 
emergency following the COVID-19 outbreak, OJ L 314, 29.9.2020, p. 35.  

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(6) 

(7) 

(8) 

efforts undertaken in 2020 and 2021 to address the impact of the COVID-19 outbreak 
and respond to the socioeconomic consequences of the outbreak for workers and the 
self-employed. In particular it concerns the measures set out in recitals 6 to 8.  
In the ‘Law on Employment No XII-2470’ of 21 June 2016, as amended in 20203, as 
referred  to  in  Article  3(a)  of  Implementing  Decision  (EU)  2020/1350,  Lithuania 
introduced a scheme to pay subsidies to employers to cover estimated wages for each 
employed person facing time without work, as a support during the state emergency or 
quarantine.  Before  1  January  2021,  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. From 1 January 2021, the employer can receive subsidies to cover 
100% of the salary, up to a maximum of 1.5 times 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.  

Under the ‘Law on Employment No XII-2470’ of 21 June 2016, as amended in 2020, 
as  referred  to  in  Article  3(a)  of  Implementing  Decision  (EU)  2020/1350,  subsidies 
were also paid for employees returning from time without work4, 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 could 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  aimed  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,  as  referred  to  in  Article  3(b)  of  Implementing 
Decision (EU) 2020/1350. This measure was amended  in 20205. In 2020, the benefit 
amounted  to  EUR  257  and  was  paid  during  the  period  of  the  quarantine  and  state 
emergency and the following two months. In 2021, the benefit amounts  to EUR 260 
and  is  paid  during  the  period  of  the  quarantine  and  state  emergency  and  one  month 
after. 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 income 

 (9) 

Lithuania fulfils the conditions for requesting financial assistance set out in Article 3 
of  Regulation  (EU)  2020/672.  Lithuania  has  provided  the  Commission  with 
appropriate evidence that the actual and planned public expenditure has increased by 
EUR 1 101 607 198  as  of  1  February  2020  due  to  the  national  measures  taken  to 
address  the  socio-economic  effects  of  the  COVID-19  outbreak.  This  constitutes  a 

3 

4 

5 

Article 41, part 2-1 of ‘Law on Employment No XII-2470’ of 21 June 2016, as amended by Law No. XIII-
2822 of 17 March 2020, Law No. XIII-2846 of 7 April 2020, Law No. XIII-3005 of 4 June 2020, and Law 
No. XIV-131 of 23 December 2020. 
Article 41, part 2-4 of ‘Law on Employment No XII-2470’ of 21 June 2016, as amended by Law No. XIII-
2822 of 7 May 2020 and Law No XIII-3005 of 4 June 2020. 
Article 5-1 of ‘Law on Employment No XII-2470’ of 21 June 2016, as amended by Law No. XIII-2822 of 17 
March 2020, Law No. XIII-2846 of 7 April 2020, Law No. XIII-2877 of 30 April 2020, and Law No. XIV-35 
of 3 December 2020. 

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sudden  and  severe  increase  because  it  is  related  also  to  an  extension  of  existing 
national measures directly related to short-time work scheme and similar measures that 
cover  a  significant  proportion  of  undertakings  and  of  the  labour  force  in  Lithuania. 
Lithuania financed EUR 144 347 198 of the increased amount of expenditure through 
Union funds. 

(10)  The Commission has consulted Lithuania and verified the sudden and severe increase 
in  the  actual  and  planned  public  expenditure  directly  related  to  short-time  work 
schemes  and  similar  measures,  referred  to  in  the  request  of  11  March  2021,  in 
accordance with Article 6 of Regulation (EU) 2020/672.  

(11)  Financial assistance should therefore be provided with a view to helping Lithuania to 
address the socio-economic effects of the severe economic disturbance caused by the 
COVID-19  outbreak.  The  Commission  should  take  the  decisions  concerning 
maturities,  size  and  release  of  instalments  and  tranches  in  close  cooperation  with 
national authorities.  

(12)  Lithuania  and  the  Commission  should  take  this  Decision  into  account  in  the  loan 

agreement referred to in Article 8(2) of Regulation (EU) 2020/672.  

(13)  This Decision should be without prejudice to the outcome of any procedures relating 
to  distortions  of  the  operation  of  the  internal  market  that  may  be  undertaken,  in 
particular  pursuant  to  Articles  107  and  108  of  the  Treaty.  It  does  not  override  the 
requirement  for  Member  States  to  notify  instances  of  potential  State  aid  to  the 
Commission under Article 108 of the Treaty. 

(14)  Lithuania should inform the Commission on a regular basis of the implementation of 
the planned public expenditure, in order to enable the Commission to assess the extent 
to which Lithuania has implemented that expenditure. 

(15)  The  decision  to  provide  financial  assistance  has  been  reached  taking  into  account 
existing and expected needs of  Lithuania, as well  as  requests for financial  assistance 
pursuant  to  Regulation  (EU)  2020/672  already  submitted  or  planned  to be  submitted 
by other Member States, while applying the principles of equal  treatment,  solidarity, 
proportionality and transparency,  

HAS ADOPTED THIS DECISION:  

Implementing Decision (EU) 2020/1350 is amended as follows:  

Article 1 

(1) 

Article 2 is amended as follows: 

(a) 

paragraph 1 is replaced by the following:  

‘1. The Union shall make available to  Lithuania  a loan amounting to  a maximum of 
EUR 957 260 000. The loan shall have a maximum average maturity of 15 years.’; 

(b)  paragraph 4 is replaced by the following:  

‘4.  The  first  instalment  shall  be  released  subject  to  the  entry  into  force  of  the  loan 
agreement  provided  for  in  Article  8(2)  of  Regulation  (EU)  2020/672.  Any  further 
instalments shall be released in accordance with the terms of such loan agreement or, 
where relevant, be subject to the entry into force of an addendum to the latter, or an 
amended loan agreement concluded between Lithuania and the Commission.’; 

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(2) 

Article 3 is replaced by the following:  

Lithuania may finance the following measures: 

‘Article 3 

(a)  wage subsidies during time without work, as provided for in Article 41 of ‘Law 

on Employment No XII-2470’ of 21 June 2016, as amended in 2020; 

(b)  wage subsidies after time without work, as provided for in Article 41 of ‘Law 

on Employment No XII-2470’ of 21 June 2016, as amended in 2020;  

(c) 

benefits  to  the  self-employed,  as  provided  for  in  Article  5-1  of  ‘Law  on 
Employment No XII-2470’ of 21 June 2016, as amended in 2020; 

(d)  benefits to the self-employed engaged in agriculture, as provided for in Article 
5-2  of  ‘Law  on  Employment  No  XII-2470’  of  21  June  2016,  as  amended  in 
2020;  

(3) 

Article 4 is replaced by the following:  

‘Article 4 

1. 

Lithuania  shall  inform  the  Commission  by  30  March  2021,  and  every  six 
months  thereafter  of  the  implementation  of  the  planned  public  expenditure 
until that planned public expenditure has been fully implemented.  

2.  Where  measures  referred  to  in  Article  3  are  based  on  planned  public 
expenditure  and  have  been  subject  to  an  Implementing  Decision  amending 
the 
Implementing  Decision 
Commission  within  6  months  after  the  date  of  adoption  of  that  decision,  and 
every  6  months  thereafter  of  the  implementation  of  the  planned  public 
expenditure until that planned public expenditure has been fully implemented.’  

(EU)  2020/1350,  Lithuania  shall 

inform 

This Decision is addressed to the Republic of Lithuania. 

Article 2 

Done at Brussels, 

For the Council 
The President 

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