On Friday, the president had a meeting with Gediminas Šimkus, the central bank’s board chairman.
"One of the issues discussed was related to foreign exchange reserves. The profits of the Bank of Lithuania are linked precisely to the investment of these reserves. It was agreed to draft amendments to the central bank’s law and to change the calculation of the bank’s contribution to the budget," Vaidas Augustinavičius, economic adviser to the president, told a press conference after the meeting.
The president is able to submit such amendments, he said.
"The Bank of Lithuania is ready to allocate a larger share of the return on foreign reserve investments specifically to defence financing," the adviser said.
Asked about a possible increase in the central bank’s contributions if the formula were changed, the presidential adviser said they would more than double.
For his part, the central bank’s governor Šimkus was not specific about a possible amount of funds. He did said that the Bank of Lithuania had transferred EUR 300 million to the Government in 2023-2024, both in corporate tax payments and in interest payments to public authorities.
The President’s Office earlier told ELTA that the sources it proposes would help to boost defence spending without raising taxes or cutting social expenditure. The proposals would also contribute to the creation of a fully operational national army division by 2030. This would require an additional EUR 12 billion over the period 2026-2030.
The Bank of Lithuania generates the bulk of its profit from management of financial assets, customer services as well as participation in the Eurosystem and monetary policy operations.
Following the Republic of Lithuania Law on the Bank of Lithuania, the amount allocated to the state budget after the allocation of profit to the Bank of Lithuania’s reserve capital cannot exceed 70% of the calculated average of the Bank of Lithuania’s profit (loss) of the last three financial years. Contributions to the state budget are paid once a year, usually by 1 May.