Lithuania's new government signals softer line toward China

By Burak Bir

LONDON (AA) - Lithuania's incoming government pledged on Tuesday to ease tensions with China, signaling a new beginning after years of strained relations with Beijing.

The incoming government, led by Prime Minister-designate Inga Ruginiene, presented its program to parliament, pledging a significant increase in defense spending, tax stability, and a softer stance toward China, the country's broadcaster LRT reported.

The new government signals a reset with China by ending the program that labeled China a security challenge and instead promising to restore diplomatic representation to a level "comparable with other EU member states."

Relations with Beijing collapsed in 2021 after Lithuania allowed Taiwan to open a representative office in Vilnius under the name "Taiwanese," prompting Beijing to withdraw its diplomats.

Since May, no accredited Chinese diplomats have been present in Lithuania, according to the report.

Meanwhile, once approved, the Cabinet will commit to spending at least 5% of GDP on defense -- one of the highest ratios in NATO, which surpasses the outgoing government’s pledge of 3.5%.

On economic policy, the new government pledged no further tax increases beyond a special levy on banks.

The decision comes after parliament passed a sweeping tax reform earlier this year that raised income, property, and corporate taxes.

Ruginiene, a former labor union leader, was elected as the country's new prime minister in August, weeks after her predecessor, Gintautas Paluckas, resigned on July 31 following investigations into his business dealings.