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Lithuania passes 2019 budget, no extra cash for striking teachers

FILE PHOTO: Lithuanian Prime Minister Saulius Skvernelis speaks after talks with German Chancellor Merkel in Berlin, Germany, February 23, 2017. REUTERS/Hannibal Hanschke/File Photo

VILNIUS (Reuters) - Lithuania’s parliament approved a 2019 budget on Tuesday that boosts defence spending but does not meet demands of teachers who have gone on strike to demand higher wages.

Revenues are expected to be 17.2 billion euros ($19.6 billion) and expenditures 17.0 billion euros next year, including 1.9 billion euros in EU support. The government expects a surplus of 1.5 billion euros by year-end.

Lawmakers voted to raise the outlay for defence to up to 2.05 percent of gross domestic product (GDP), a finance ministry spokesperson said, from 2 percent of GDP planned for this year.

The NATO member state’s main political parties are committed to increasing defence spending every year for the next decade, reaching at least 2.5 percent of GDP by 2030. U.S. President Donald Trump has repeatedly pushed European allies in NATO to pay more for collective defence.

Lithuania’s central bank, however, has warned the government it is unlikely to meet its revenue target and will face a “significantly worse” public finance balance in 2019 than the stated goal of a surplus of 0.4 percent of GDP.

Prime Minister Saulius Skvernelis has refused to raise pay for teachers, thousands of whom have been on strike over wages.

Last week Skvernelis blamed the strikes on the opposition Homeland Union Party, which has expressed support for teacher demands, for what he described as an attempt to topple his government by “stoking chaos”.

($1 = 0.8790 euros)

Reporting By Andrius Sytas; Editing by Simon Johnson and Mark Heinrich