Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2020/1350 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
Date: 2022-09-20
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU loan, Lithuania, coronavirus disease, emergency aid, employment aid, epidemic, fight against unemployment, public expenditure, self-employed person

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   EUROPEAN COMMISSION  Brussels, 20.9.2022  COM(2022) 479 final 2022/0294 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2020/1350 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  
 
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  7  August  2020,  Lithuania  requested  financial  assistance  from  the  Union  and  on  25 
September  2020,  with  its  Implementing  Decision  (EU)  2020/1350,  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  requested  again  Union  financial  assistance  under  the  SURE 
Regulation. Further to this request, the Council Implementing Decision (EU) 2020/1350 was 
amended by Council implementing decision (EU) 2021/678 of 23 April 2021. 

On  8  August  2022,  Lithuania  requested  Union  financial  assistance  under  the  SURE 
Regulation for the third time.  

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 caused by the COVID-19 
pandemic.  In  particular,  this  pertains  to  existing  measures  referred  to  in  Council 
Implementing Decision (EU) 2020/1350: 

(a) 

(b) 

a scheme to pay subsidies to employers to cover estimated wages for each employed 
person  facing  time  without  work,  as  support  during  the  quarantine  and  state  of 
emergency. Before 1 January 2021, an 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, an 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. Before 1 July 2021 subsidies were subject 
to  a  cap  of  the  minimum  wage  or  twice  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 to work could be as high as 100% of an 
employee’s salary, in the third and fourth months as high as 50%, and in the fifth and 
sixth months as high as 30%. From 1 July 2021 subsidies were paid for employees 
returning from time without work, for a period of up to two months following their 
return  to  work.  The  subsidy  in  the  first  month  consists  of  100%  of  the  employee’s 
salary, but not more than 0,9 times the minimum wage, in the second month 100% of 

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the  employee’s  salary,  but  not  more  than  0,6  times  the  minimum  wage.  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. 

Lithuania has 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 2020.   

• 

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.  

• 

Proportionality 

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

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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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2022/0294 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

amending Implementing Decision (EU) 2020/1350 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 

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) 

1 
2 

3 

Further  to  a  request  from  Lithuania  on  7  August  2020,  the  Council,  by  means  of 
Implementing Decision (EU) 2020/13502, granted financial assistance to Lithuania in 
the  form  of  a  loan  amounting  to  a  maximum  of  EUR 602 310 000  with  a  maximum 
average  maturity  of  15  years,  and  with  an  availability  period  of  18  months,  with  a 
view  to  complementing  Lithuania’s  national  efforts  to  address  the  impact  of  the 
COVID-19 outbreak and respond to the socioeconomic consequences of that outbreak 
for workers and the self-employed.  

The  loan  was  to  be  used  by  Lithuania  to  finance  the  short-time  work  schemes  and 
similar  measures,  as  referred  to  in  Article  3  of  Implementing  Decision  (EU) 
2020/1350.  

Further to a second request from Lithuania on 11 March 2021, the Council, by means 
of  Implementing  Decision  (EU)  2021/6783  amending  Implementing  Decision  (EU) 
2020/1350,  granted  additional  financial  assistance  of  EUR 354 950 000  to  Lithuania 
by  increasing  the  maximum  loan  amount  to  EUR 957 260 000  with  a  maximum 
average  maturity  of  15  years,  and  with  an  availability  period  of  18  months,  with  a 
view  to  complementing  Lithuania’s  national  efforts  to  address  the  impact  of  the 
COVID-19 outbreak and respond to the socioeconomic consequences of that outbreak 
for workers and the self-employed. 

OJ L 159, 20.5.2020, p. 1. 
Council  Implementing  Decision  (EU)  2020/1350  of  25  September  2020  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.  
Council  Implementing  Decision  (EU)  2021/678  of  23  April  2021  amending  Implementing  Decision 
(EU)  2020/1350  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 
144, 27.4.2021, p. 12.  

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

The  additional  loan  was  to  be  used  by  Lithuania  to  finance  the  short-time  work 
schemes  and  similar  measures,  as  referred  to  in  Article  3  of  Implementing  Decision 
(EU) 2021/678 amending Implementing Decision (EU) 2020/1350. 

The  COVID-19  outbreak  has  immobilised  a  substantial  part  of  the  labour  force  in 
Lithuania. This  has led to a  still  sudden and  severe increase in  public expenditure  in 
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, 2021 and 2022 to contain that outbreak and its socioeconomic and health-related 
impact had and still have a dramatic impact on public finances. In 2020, Lithuania had 
a general  government deficit and debt of  7.3% and 46.6% of gross domestic product 
(GDP)  respectively,  which  narrowed  to  1.0%  and  44.3%  respectively  at  the  end  of 
2021. According to the Commission’s 2022 spring forecast, Lithuania is forecasted to 
have a general government deficit and debt of  4.6% and 42.7% of GDP  respectively 
by  the  end  of  2022.  According  to  the  Commission’s  2022  summer  interim  forecast, 
Lithuania’s GDP is projected to increase by 1.9% in 2022. 

On 8 August 2022 Lithuania requested further financial assistance from the Union in 
the amount of EUR 141 800 000 with a view to continuing to complement its national 
efforts  undertaken  in  2020,  2021  and  2022  to  address  the  impact  of  the  COVID-19 
outbreak and respond to the socioeconomic consequences of the outbreak for workers. 
In  particular,  Lithuania  further  extended  or  amended  short-time  work  schemes  and 
similar measures set out in recitals (8) to (9).  

In the ‘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, ‘Law No XIV-131’ of 23 December 2020, ‘Law No XIV-351’ 
of  27  May  2021,  and  ‘Law  No  XIV-911’  of  20  January  2022(4),  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  support  during  the  quarantine  and  state  of 
emergency.  Before  1  January  2021,  an  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, an 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 by ‘Law 
No XIII-3005’ of 4 June 2020 and ‘Law No XIV-351’ of 27 May 2021(5), as referred 
to  in  Article  3(b),  of  Implementing  Decision  (EU)  2020/1350,  before  1  July  2021 
subsidies were also paid for employees returning from time without work, for a period 
of up to six months following their return to work. Subject to a cap of the minimum 
wage or twice 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  to  work  could  be  as  high  as  100%  of  an  employee’s  salary,  in  the 

TAR 18 March 2020 No. 05703, TAR 9 April 2020 No. 07511, TAR 11 June 2020 No. 12829, TAR 29 

4 
December 2020 No. 28988, TAR 9 June 2021 No. 13151, TAR 27 Janary 2022 No. 01287. 
5 

TAR 11 June 2020 No. 12829, TAR 9 June 2021 No. 13151. 

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third and fourth months as high as 50%, and in the fifth and sixth months as high as 
30%.  From  1  July  2021  subsidies  were  paid  for  employees  returning  from  time 
without  work,  for  a  period  of  up  to  two  months  following  their  return  to  work.  The 
subsidy  in  the  first  month  consists  of  100%  of  the  employee’s  salary,  but  not  more 
than  0,9  times  the  minimum  wage,  in  the  second  month  –  100%  of  the  employee’s 
salary,  but  not  more  than  0,6  times  the  minimum  wage.  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. 

(10)  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 1 264 915 309  as  of  1  February  2020  due  to  the  national  measures  taken  to 
address  the  socioeconomic  effects  of  the  COVID-19  outbreak.  This  constitutes  a 
sudden and severe increase because it is also related to an extension or amendment 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 intends to finance EUR 144 350 000 of the increased amount of 
expenditure through Union funds from the EU budget and EUR 21 505 309 through its 
own financing. 

(11)  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,  as  referred  to  in  the  request  of  8  August  2022,  in 
accordance with Article 6 of Regulation (EU) 2020/672.  

(12)  Financial assistance should therefore be provided with a view to helping  Lithuania to 
address  the  socioeconomic  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.  

(13)  Given that the availability period indicated in Implementing Decision (EU) 2020/1350 
has expired, a new availability period for the additional financial assistance is needed. 
The availability period for financial assistance of 18 months granted by Implementing 
Decision (EU) 2020/1350 should be extended by 21 months and as a consequence the 
total  availability  period  should  be  39  months  starting  from  the  first  day  after 
Implementing Decision (EU) 2020/1350 has taken effect. 

(14)  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. 

(15)  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. 

(16)  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. 

(17)  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 

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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 1 099 060 000. The loan shall have a maximum average maturity of 15 years.’; 

(b) paragraph 2 is replaced by the following:  

‘2. The availability period for financial assistance granted by this Decision shall be 39 
months starting from the first day after this Decision has taken effect.’ 

(c) 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 that loan agreement or, 
where  relevant,  be  subject  to  the  entry  into  force  of  an  addendum  thereto,  or  of  an 
amended loan agreement concluded between Lithuania and the Commission replacing 
the original loan agreement.’; 

(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 last amended by ‘Law No 
XIV-911’ of 20 January 2022; 

(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 last amended by ‘Law No XIV-
351’ of 27 May 2021; 

(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.’ . 

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This Decision is addressed to the Republic of Lithuania. 

Article 2 

Done at Brussels, 

For the Council 
The President 

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