“The Lithuanian Government has implemented multiple measures to combat the COVID-19 crisis,” says Rokas Bukauskas, Head of PwC Legal in Lithuania. “It all started with postponing tax payments from the companies which were affected the most, then went on to providing compensation to employees and other measures."
According to Bukauskas, "the Government has already borrowed significant amounts in the financial markets to finance these support measures." In addition, he says, "some of the financing measures went through a slow implementation process because of the red tape involved. However, the public sector institutions were keen to simplify complex procedures and requirements after receiving criticism from the private sector."
Bukauskas reports that Lithuania is starting to open back up, but he says that of course things are still far from normal. “We are still under quarantine, even though we are now going through the relaxing process,” he says. “It’s hard to determine whether the actions the Government took were good enough from this perspective. We'll have to wait a while and see. We have only had a rather small number of COVID-19 cases, so for now, the situation is under control."
Bukauskas adds that the economy has stalled and most investment projects have been suspended for the last couple of months in Lithuania. Nonetheless, he says, “most of the strategic investments that began prior to the crisis continued." In addition, he says, “we have an 11 percent unemployment rate here in Lithuania, but that’s not as dramatic as it could have been. And we have passed the pandemic’s peak, meaning that we should not expect any additional drastic falls.”
“Lithuania is a larger economy than neighboring Latvia and Estonia," Bukauskas notes. “As a result, the Government should be able to provide multiple possibilities for financing after the crisis ends. Of course, you can never really know whether any of the measures you impose are going to work in the long run. However, you still need to try different options and hope for good results. I hope that measures imposed by the Lithuanian Government will prove to be successful."
In any event, Bukauskas, it’s not all bad. “The possibility of new market players emerging and new investors coming is ultimately a good thing,” he says. “People will seek new business opportunities and focus on things such as anti-money laundering or compliance more in the near future. The change, while it will require time, will be an interesting thing to witness nonetheless.”