- European Commission Authorizes Support Package for Lithuanian Financial Institutions
- August 20, 2010
- Law Firm: Alston Bird LLP - Atlanta Office
Yesterday, the European Commission approved a package of Lithuanian programs intended to stabilize the financial markets in response to the global financial crisis.
The programs provide eligible credit institutions with new capital in the form of subordinated loans and guarantees on newly issued short- and medium-term debt, other senior financial liabilities (except interbank deposits) and remuneration, as recommended previously by the European Central Bank. The package also includes an asset relief measure, whereby Lithuania will assume certain types of bank assets in exchange for cash or government securities. The European Commission concluded that the package was an adequate means to stabilize a serious disturbance in the Lithuanian economy, in compliance with Article 107.3.b of the EU Treaty.
The package follows previous efforts by the European Commission to ensure the creditworthiness of Lithuanian financial institutions, as well as efforts by the Council of the European Union to resolve Lithuania’s excessive deficits.