1 APPROVED BY Government of the Republic of Lithuania Resolution No 1437 of 15 December 2014 BORROWING AND DEBT MANAGEMENT GUIDELINES OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA FOR CHAPTER I GENERAL PROVISIONS 1. The purpose of the Borrowing and Debt Management Guidelines of the Government of the Republic of Lithuania for (hereinafter the Guidelines) is to establish the principles of the development and implementation of the effective public finance borrowing and debt management policy in order to increase national macroeconomic stability and economic development. The guidelines shall be followed by the Government of the Republic of Lithuania (hereinafter the Government) in borrowing on behalf of the State and managing debt liabilities assumed after circulation of Government Securities (hereinafter GS), signature of loan agreements and other debt instruments. 2. The Guidelines shall be prepared considering the increase in debts of the European Union (hereinafter the EU) Member States and, accordingly, unabated borrowing requirement of the EU Member States for refinancing the debt liabilities assumed. Therefore, the competition increases between the governments of the EU Member States seeking to sell debt securities under the most favourable terms. The need to become distinguishable by selling debt securities is getting stronger among individual issuers, especially of relatively smaller ones such as Lithuania. It is also essential for the EU Member States, especially for relatively smaller ones, to improve financial assets liquidity positions of the treasury by facilitating access to various financing sources, and to further develop the domestic debt securities market. 3. The concepts used in the Guidelines shall be understood the same as they are defined or used in the Republic of Lithuania Law on State Debt and the Rules on Issue and Circulation of Securities of the Government of the Republic of Lithuania, Taking Loans on Behalf of the State and Signature of Other Debt Instruments approved by Government of the Republic of Lithuania Resolution No 1329 On Approval of the Rules on Issue and Circulation of Securities of the Government of the Republic of Lithuania, Taking Loans on Behalf of the State and Signature of Other Debt Instruments of 3 December CHAPTER II STATUS QUO ANALYSIS 4. Annual growth of the gross domestic product of the Republic of Lithuania (hereinafter GDP), in accordance with the chain-linking method, was one of the highest in the EU and represented 3.3 % in In the 1 st half of 2014 GDP grew by 3.2 %.
2 2 5. The general government deficit in 2013 constituted 2.6 % of GDP and, as compared to the general government deficit in 2012, decreased by 0.6 percentage point. The Government implements a consistent budget deficit reduction strategy in order to achieve the medium-term objective general government structural budget deficit not exceeding 1 % of GDP at current prices. 6. In 2013 the general government debt level, after evaluation of the concluded transactions in financial derivatives, represented 39 % of GDP and it was one of the lowest in the EU (the average of the EU Member States 85.4 %). 7. Lithuania s credit ratings on long-term borrowing in foreign currency assigned by international credit rating agencies (hereinafter the agency) Moody s, Standard & Poor s and Fitch Ratings are Baa1 / A- / A-, accordingly. In April 2014 the agency Standard & Poor s upgraded Lithuania s long-term borrowing rating even by two notches from BBB to A-. Such a decision has been made considering the exceeded Lithuania s economic growth and results of public finances in The agency also evaluated that Lithuania will meet all criteria necessary for euro adoption, and the country will be invited to join the euro area in According to the agency, the ratings could be upgraded if Lithuania s fiscal indicators exceeded the agency s expectations. In June 2014 other agency Fitch Ratings considering the approval of the recommendation for Lithuania s acceptance to the euro area from 2015 adopted at the Meeting of EU Ministers for Economic and Financial Affairs, also the fact that euro adoption will strengthen Lithuania s economic policy, and exchange rate risk elimination will have a positive impact on national banking system balances, upgraded Lithuania s long-term borrowing rating from BBB+ to A-, and short-term borrowing rating from F2 to F1. 8. Lithuania s creditworthiness improved in The 5-year country s CDS price decreased from 367 basis points on 1 January 2012 to 122 basis points on 31 December At the end of the 1 st half of 2014 the price decreased down to 97 basis points. 9. The European Central Bank reduced the basic interest rate from 1 % at the beginning of 2012 to 0.05 % in September According to the data of the surveys of commercial banks made by business and financial news agency Bloomberg, the European Central Bank should not change the basic interest rate in the 4 th quarter of From the beginning of 2014 the US Federal Reserve Bank gradually reduces the buying-in of securities from USD 85 billion at the beginning of the year to USD 15 billion in October. The average overnight interbank interest rate in euros (EONIA) in 2013 was 9 basis points, while the average rate of 9 months in 2014 was 13 basis points, however, after the European Central Bank reduced the basis interest rate down to 0.05 %, in September EONIA went down to -2.4 (minus) basis points. The average 6-month Euribor in 2013 was 33.6 basis points, while 9-month Euribor in basis points, however, at the end of September 6-month Euribor fell down and reached 18.3 basis points. 10. The yield of long-term Lithuanian euro-denominated GS issued on foreign capital market is less than the yield of litas-denominated GS issued on domestic market in 2013 and In 2013 the yield of the Eurobonds to be redeemed in 2016 and 2018 was, on average, by 33 basis points lower than the yield of GS in litas of the same maturity. In 2014 the difference in
3 3 9-month yields remained the same as in basis points. However, the difference in 6- month maturity interbank interest rates (Vilibor and Euribor) over 3 quarters of 2014 was, on average, just 9 basis points, while in 2013 this difference made up, on average, 33 basis points. 11. Evaluating the amounts of risk premium on different maturity GS issued on domestic market and their fluctuation trends, it was noticed that in 2013 the risk premium on 2-year maturity bonds as well as on 3-year maturity bonds (in the 2 nd quarter of 2013) is significantly lower than the risk premium of longer (5 10-year) maturity domestic bonds. This was due to investors priorities resulting in greater demand for bonds of such maturity (2 3 years) (as compared to bonds with longer maturity) encouraging greater competitiveness in purchasing GS of this particular maturity. 12. In February 2013 the Government borrowed EUR 400 million on foreign capital markets by tapping the previous issue of euro-denominated Eurobonds due In January 2014 the Government borrowed EUR 500 million on foreign capital markets placed the Eurobond issue to be redeemed in In May the Government borrowed EUR 185 million by issuing on German market GS with the longest maturity since the beginning of independence of Lithuania to be redeemed in In 2013 the Government borrowing on behalf of the State totalled LTL 7,518 million at nominal value. On domestic market, LTL 3,215 million of nominal value bonds and T-bills were issued through GS auctions, of which LTL 475 million of nominal value bonds with residual maturity of 5 or more years. The Government nominal value savings notes issued make up LTL 509 million. The nominal value GS of LTL 1,399 million were issued through bilateral negotiations and the loan of LTL 850 million was taken on domestic market. On foreign market, during the period concerned the Government borrowed LTL 1,543 million, of which GS made up LTL 1,381 million and loans from foreign creditors LTL 162 million. In 2013 the Government repaid LTL 6,707 million of loans. 14. Over 9 months of 2014 the Government borrowed LTL 4,731 million in total at nominal value, on domestic market the nominal value bonds and T-bills in the amount of LTL 2,575 were issued through GS auctions, of which LTL 619 million of nominal value bonds with residual maturity of 5 and more years. The amount of sold Government savings notes made up LTL 429 million. The agreement for credit line for the amount of LTL 432 million has also been signed. On foreign market, during the 1 st half of 2014 the Government borrowed LTL 2,365 million, of which LTL 1,726 million Eurobonds placed on international markets and LTL 639 million bonds placed on German market. During this period, the amount of repaid loans by the Government totalled LTL 4,665 million. 15. At the end of 2013 the major share of the debt on behalf of the State consisted of the issued GS 86 % of total debt and loans 14 % of total debt, while at the end of September of 2014 of the GS 87 % of total debt and loans 13 % of total debt. At the end of 2013 the share of the domestic debt from total debt on behalf of the State made up 25.1 %, and at the end of August %. The debt on behalf of the State is hedged against possible exchange rate risk. Considering transactions in financial derivatives, at the end of 2013 the debt on behalf of
4 4 the State in euro represented 80 %, in litas 20 %. Till the end of September of 2014 the debt on behalf of the State in euro and litas has not changed. 16. Refinancing risk indicators of the debt on behalf of the State do not pose a threat to public finances. The short-term debt by residual maturity constituted 11.1 % of total debt at the end of 2013 (14.1 % at the end of September 2014), weighted average residual maturity of the debt 4.9 years (at the end of September 2014 it was the same 4.9 years), weighted maturity of the domestic debt 2.4 years (at the end of September 2014 it was 2.6 years), weighted maturity of foreign debt 5.6 years (at the end of September 2014 it was the same 5.6 years). 17. In managing refinancing risk, a special attention is given to significant Eurobond issues USD 1.5 billion, EUR 1 billion and EUR 1.4 billion to be redeemed in 2015, 2016 and 2018, accordingly. Repayment maturities of all domestic and foreign debts are gradually placed, the measures for mitigation of refinancing risks are foreseen, and therefore, the repayment of debt does not pose a threat to public finances. 18. The share of the debt on behalf of the State with variable interest rate from total debt on behalf of the State represented 0.9 % at the end of 2013, 0.6 % at the end of September Financial Macaulay duration showing a medium term during which the payments for issued GS do not depend on the changes in the interest rate level, and which is calculated as the weighted average of the cash flow maturity, made up 3.6 years at the end of 2013, of which of the domestic debt 2.3 years. At the end of September 2014 Macaulay duration was 3.8 years, of which of the domestic debt 2.6 years. The average weighted residual debt portfolio duration till the change in interest rates was 4.3 years at the end of 2013, and 4.4 years at the end of September In preparation of the Republic of Lithuania Law on Approval of Financial Indicators of the State Budget and Municipal Budgets for 2013, the expenditure appropriations planned for the Debt on Behalf of the State Management Programme constituted LTL 2,303 million, however, due to one-off accounting factors, actual expenditures of the Programme were lower. The approved appropriations for the Debt on Behalf of the State Management Programme for 2014 are LTL 2,200 million. The planned expenditures of the Programme for 2015 make up LTL 2,144 million. 20. Guarantee obligations assumed by the State, including also Lithuania s obligations with regard to the guarantees issued to international financial institutions, at the end of 2013 made up LTL 919 million, or 0.8 % of GDP, at the end of August 2014 LTL 872 million, or 0,7 % of the projected GDP for According to the data of the Central Securities Depository of Lithuania, 49.7 % of GS circulated in Lithuania at the end of 2013 were purchased by monetary financial institutions, 12.1 % by insurance companies and pension funds, 12.6 % by households. The investments by non-residents to Lithuanian GS accounted for 3.4 % of the issued GS. Accordingly, 47 % of GS circulated in Lithuania at the end of June 2014 were purchased by monetary financial institutions, 17.9 % by insurance companies and pension funds, 13.9 % by households. The investments by non-residents to Lithuanian GS accounted for 5 % of the issued GS.
5 5 22. In 2013 trade volumes on the secondary GS market of Lithuania in the Stock Exchange of the public limited company NASDAQ OMX Vilnius remained relatively low, as compared to the turnover amounts of GS transactions made outside the Stock Exchange. In 2013 the secondary GS market turnover in the Stock Exchange reached LTL 229 million (of 9 months in 2014 LTL 287 million). In 2013 GS trade volumes outside the Stock Exchange made up LTL 3.6 billion (in the 1 st half of 2014 LTL 2.9 billion). 23. According to the data announced by the Bank of Lithuania, the asset value of the second pillar pension funds at the end of 2012 made up LTL 4.8 billion, at the end of 2013 LTL 5.4 billion, and in the 1 st half of 2014 LTL 5.9 billion. In 2013 Lithuania s security market, as compared to 2012, increased by 8.8 %, while in the 1 st half of 2014, as compared to the 1 st half of 2013, by 7.8 %. CHAPTER III MACROECONOMIC PROJECTIONS, ESTABLISHED BUDGET BALANCE TARGETS AND OTHER SIGNIFICANT BUDGET POLICY CHANGES 24. The Guidelines are prepared considering the projections of economic indicators of Lithuania (of 8 September 2014) published on the website of the Ministry of Finance of the Republic of Lithuania (hereinafter the Ministry of Finance), according to which, GDP growth of % is projected in , also decrease in average annual unemployment level down to 8.6 % and increase in average gross monthly salaries by % in In preparation of the Republic of Lithuania Law on Approval of Financial Indicators of the State Budget and Municipal Budgets for 2015, the Ministry of Finance projected the deficit of 1.2 % of GDP in 2015, deficit of 0.5 % of GDP in 2016 and surplus of 0.2 % of GDP in The persons, who concluded contracts on the second pillar pension accumulation in the pension funds, in 2013 were permitted to choose one from 3 options of further pension accumulation starting from 2014: option one to suspend transfer of the share of social insurance payment to the private pension funds, option two to continue accumulation by transferring additionally the contribution of 1 % (from %) from the participant s income from which the state social insurance payments are calculated (additional 1 % (from 2016 of 2 %) pension contribution from the national employees last-year average salary is transferred from the State budget), option three to leave everything unchanged and to accumulate the pension under the same conditions. About 0.4 million residents decided to accumulate by transferring additional contributions for the pension, 0.7 million to accumulate funds in the pension funds under previous conditions and only 24 thousand residents took the possibility of refusing accumulation of funds for the pension in the pension funds. Starting from 2020, it is foreseen to increase the contribution to the second pillar pension funds up to 3.5 % of the participant s income from which the state social insurance payments are calculated. In 2014 the planned contribution is 2 %, in % (in %).
6 6 CHAPTER IV ANALYSIS OF ADVANTAGES, DISADVANTAGES, OPPORTUNITIES AND THREATS 27. After performance of the State borrowing and State debt management analysis, external and internal factors were evaluated. The following borrowing and debt management advantages, disadvantages, opportunities and threats were established: advantages: the Government follows a policy oriented towards sustainable public finances and this creates possibilities of further mitigation of the borrowing need for deficit financing and national risk premium; decreasing risk premium of the Lithuanian GS diminish Government debt management costs; decreasing Lithuania s credit risk is manifested by upgraded borrowing ratings issued by Fitch Ratings and Standard & Poor s in 2014; the debt on behalf of the State is secured against exchange rate risk; debt portfolio refinancing risk and interest rate risk do not pose a threat to public finances; disadvantages: a share of domestic debt from total debt on behalf of the State is still lower than before the financial crisis in , when this indicator reached about 30 %; turnover of the secondary GS market in the Stock Exchange is significantly lower, as compared to the transactions outside the Stock Exchange. It makes it difficult to evaluate GS liquidity and to establish their pricing; the general government debt, despite decreasing budget deficit, is still growing in nominal terms; the agency Fitch Ratings names the Lithuanian domestic GS market as small ; opportunities: planned euro adoption improved the country s credit ratings and will, accordingly, cause lower borrowing costs; increasing Lithuanian GDP and decreasing borrowing need for deficit financing create opportunities for mitigation of the general government debt level; foreseen decrease in the unemployment level, growth of salaries and, accordingly, growth of the salary fund, also undergoing pension accumulation reform will increase the volumes of transfers to the secondary pillow pension funds in monetary terms and will enlarge Lithuania s insurance market. This should help to strengthen the development of the domestic GS market and to increase demand for long-term domestic GS; market interest rates remaining relatively low makes opportunities for issuers to fix low interest rates for long-term period; threats:
7 still unstable situation in some euro area countries, also geopolitical risk due to the situation in the Ukraine; feasible growth of market interest rates in the future will increase the Government borrowing costs; after adoption of the euro in 2015, a greater possible competition with other euro area countries on attractiveness of investments into GS. CHAPTER V GOVERNMENT BORROWING AND DEBT MANAGEMENT OBJECTIVE AND TARGETS IN The Government borrowing and debt management objective in shall be to ensure the financing of the state expenditures determined by the laws of the Republic of Lithuania and to serve assumed debt liabilities with the borrowed funds at the lowest possible costs and tolerable risk in the medium term. 29. The Government borrowing and debt management targets in shall be the following: to borrow at the lowest payable risk premiums and by ensuring the implementation of other borrowing and debt management targets; to seek for tolerable interest rate, refinancing and exchange rate risk by following risk limits set in the Guidelines and in line with international practice, and to ensure the management of credit, operational and liquidity risk; to apply refinancing risk management measures in the process of redeeming large (in equivalent of EUR 1 billion and larger) Eurobond issues in 2015, 2016 and 2018, such as premature redemption of Eurobonds, GS replacement, up-front accumulation of financial resources, signature of credit line contracts with financial institutions holding no lower ratings than AA- / Aa3 issued by at least two agencies (rating requirement shall not be applied if a credit line contract is signed with international institutions) or a combination of these measures; to improve financial assets liquidity of the State Treasury: to develop relationship with investors; to evaluate possible demand for alternative borrowing instruments; to attract the largest possible share of idle funds of entities attributed to general government (or entities controlled by this sector) to the State Treasury; to develop and to support the effective and liquid domestic GS market; to increase the share of the domestic debt from total debt on behalf of the State and to extend maturity of the domestic debt; to borrow on foreign capital markets, to issue liquid GS issues.
8 8 CHAPTER VI TARGET IMPLEMENTATION CRITERIA 30. Targets shall be considered to be implemented on the basis of the following criteria: target one (subparagraph 29.1 of the Guidelines) performed regular analysis of the volumes of the GS risk premium and their replacement trends and decisions on borrowing are made after evaluation of this information and other targets set out in this Chapter; target two (subparagraph 29.2 of the Guidelines): risk limits set out in paragraph 31 of the Guidelines have been followed; credit and liquidity risk limits approved by the Minister of Finance have been followed and operational risk management procedures established by the Minister of Finance have been fulfilled; the schedule for fulfilment of new debt liabilities is drawn up in a way according to which the payments, after evaluation of the previous debt liabilities, are relatively evenly staggered in time rule; target three (subparagraph 29.3 of the Guidelines) less than 4 months before the redemption of the Eurobonds, refinancing risk of these issues is reduced at least by 25 %, 10 weeks before by 50 %, 6 weeks before by 100 %. When a credit line contract is signed to mitigate the risk, the funds under these contracts shall be borrowed (withdrawn) no later than 6 weeks before the redemption date of the Eurobonds, and repayment dates of loans under credit lines shall be no earlier than 60 days following the redemption date of the Eurobonds; target four (subparagraph 29.4 of the Guidelines): developing relations with investors, during the implementation of the Guidelines at least 3 annual meetings has taken place with the investors giving focus on diversification of investors and bilateral meetings; in evaluating possible demand for alternative borrowing instruments, annual survey of financial intermediaries and/or investors (domestic and/or foreign) regarding the demand for new borrowing instruments used and to be used by the Government was organised; in order to attract to the State Treasury the largest possible share of idle funds of entities attributed (or closely related) to general government during the implementation of the Guidelines: annually performed analysis of information submitted in the sets of national accounts and/or information received under separate queries of the Ministry of Finance and/or following the procedure established by the Minister of Finance with regard to financial assets accrued in the entities attributed to the general government sector; it was analysed and established what amendments to which legal acts would have a positive effect on liquidity of financial assets of the State Treasury by inducing the attraction of the temporary idle monetary resources held in the State Treasury by other entities attributable to the general government sector or closely related ones, and prepared drafts of corresponding legal acts;
9 legal acts for attraction of temporary idle monetary resources of the entities controlled by the general government entities, after evaluation of the Government borrowing need and related risk, and thus offering a possibility of enhancing liquidity of financial assets of the State Treasury were adopted; target five (subparagraph 29.5): during the implementation of the Guidelines at least 10-year GS yield curve has been supported focusing on the issue of 2 3 year, 4 6 year and 7 10 year residual maturity bonds; by issuing new Government domestic bonds, relatively liquid issues of at least EUR 100 million were created; at least 2 or 3 domestic GS early redemption auctions in line with the new GS sale were organised 4 12 months before the redemption dates of the GS issues with nominal maturity of 3 years or longer, and the last tapping of the replaced issues took place earlier than 18 months before the date of the first auction for GS replacement. In organising the auctions for GS replacement, the investors were offered medium-term and long-term GS issues which were offered to replace maturing GS issues; 23 %; target six (subparagraph 29.6): the share of the domestic debt from total debt on behalf of the State will exceed during the implementation of the Guidelines the weighted average maturity of the domestic debt has been extended for at least 2.8 years; target seven (subparagraph 29.7) when borrowing on foreign capital market, issued long-term bonds are acknowledged by market participants as benchmark-sized (at least of EUR 1 billion). CHAPTER VII DEBT RISK LIMITS 31. In implementation of the Guidelines and assuming new debt liabilities, the Government will follow the following risk limits that are in line with international practice: the indicator of short-term debt on behalf of the State by residual maturity and to total debt on behalf of the State ratio will not be higher than 25 %; average weighted residual maturity of the debt on behalf of the State will be longer than 4 years; average weighted residual maturity of the debt on behalf of the State before the change in interest rates will be longer than 3.5 years; ratio of the debt by variable interest rate to total debt on behalf of the State will not be higher than 10 %; taking into account transactions in financial derivatives, the debt in euro will represent 100 % of total debt;
10 10 3 % of GDP the overall level of the State obligations under guarantees will not be higher than CHAPTER VIII FORECASTS FOR BORROWING AND DEBT INDICATORS 32. The general government debt level, after evaluation of financial derivatives, in 2013 was 39 % of GDP. It is projected that by the end of 2017 the general government debt level will fall down to approximately 38 % of GDP. However, if a possible accumulation of funds for redemption of a large Eurobond issue at the beginning of 2018 is excluded, the debt level at the end of 2017 should fall down to approximately 35 % of GDP. It is projected that the level of interest rate burden on the general government debt will represent less than 2 % of GDP on annual basis. 33. The projected Government borrowing need, after evaluation of applicable refinancing risk management measures in redemption of Eurobond issues, in , on average, will make up EUR 2.5 billion each year. 34. On domestic market, the Government will borrow by issuing short-term and longterm GS placed through auctions and retail. It is planned that borrowing need on domestic market in , on average, will make up about EUR 1.2 billion on annual basis. 35. Taking into consideration new planned loan agreements with the European Investment Bank, Nordic Investment Bank and the Council of Europe Development Bank, in the Government will borrow funds from international financial institutions for financing investment project costs (it is projected that total borrowed amount over 3 years will exceed EUR 0.4 billion). 36. It is projected that according to the borrowing scenario based on the cost risk analysis, in implementation of the Guidelines targets, the average weighted residual debt maturity in will remain close to 5 years (the limit at least 4 years), domestic debt maturity will fluctuate from 2.6 to 3 years (the objective at least 2.8 years at the end of 2017). The average weighted residual debt portfolio maturity before the change in interest rates will remain about 4.6 years (the limit at least 3.5 years). It is foreseen that in the share of the domestic debt from total debt on behalf of the State will constitute about 23 % and more (the objective more than 23 %). The projected ratio of the short-term debt to total debt in 2015, 2016 and at the end of 2017 will be up to 20 % (the limit no more than 25 %). CHAPTER IX OTHER INFORMATION ON PLANNED BORROWING 37. Under great demand of securities and acceptable profitability on domestic market (as compared to the profitability on foreign markets), in it will be endeavoured to borrow larger amounts as projected in the Guidelines on domestic market (on account of foreign markets). This will aim at increasing the share of the domestic debt from total debt higher (up to 30 %) than envisaged in the Guidelines.
11 It is not planned to borrow significant amounts for the medium term under variable interest rate considering the fact that Lithuania s risk premium may further diminish with implementation of the continuous sustainable public finances-oriented policy by the Government and after joining the euro area in 2015, also considering extremely low current levels of the market interest rates. 39. Projected better (i.e. by the share concerned lower than the established risk limits) achievement of refinancing risk indicators creates flexible possibilities for the Government to increase short-term borrowing volumes under unfavourable situation on foreign financial markets by issuing GS on domestic market without prejudice to the established risk limits. 40. Managing refinancing risk in redemption of Eurobond issues and establishing net change limit of debt liabilities in the Law on Approval of Financial Indicators of the State Budget and Municipal Budgets for the Year Concerned, it is foreseen to evaluate feasible additional borrowing need for early accumulation of funds for redemption of Eurobonds. 41. Borrowing calculations made by the Ministry of Finance shall be based on cost and risk analysis under different interest rate scenarios established by applying deterministic and stochastic modelling of interest rates. Additionally performed alternative borrowing calculation aims at establishing whether the debt management would be effective in financing the larger share of the Government borrowing need from short-term domestic market borrowing instruments by evaluating total borrowing potential on domestic market and other targets set in the Guidelines. It was established that a relative increase in the short-term debt would create possibilities in to save, on average, 0.01 % of interest calculating from GDP on annual basis. Though a relative short-term debt limit would not be contravened, however, a short-term debt ratio would increase by 2 percentage points. The target of extending domestic debt maturity (during the implementation of the Guidelines to reach at least 2.8-year maturity) would not be implemented, and the domestic debt to total debt ratio after 2014 would decrease down to approximately 23 % and a risk of non-fulfilment of one of the targets would arise (the share of domestic debt from the debt on behalf of the State more than 23 %). Therefore, the alternative borrowing scenario is not considered to be acceptable. 42. Following the decision to invite Lithuania to join the euro area from 2015 made by the Council of the European Union on 23 July 2014, euro-denominated Government bonds were started to issue (not tap) through auctions on the domestic market. CHAPTER X OTHER PROVISIONS 43. The Ministry of Finance shall inform the Government about the implementation of the provisions of the Guidelines by the end of the 1 st half of each year. The Guidelines shall be published on the website of the Ministry of Finance in Lithuanian and English. The information on the implementation of the Guidelines shall be presented in public annual publications State Debt for the preparation of which shall be responsible the Ministry of Finance. Additionally, the Ministry of Finance shall perform quarterly monitoring of the implementation of the Guidelines.
12 The State budget expenditure related to borrowing and debt management shall be financed from the Debt on Behalf of the State Management Programme implemented by the Ministry of Finance.