Multiannual budgetary framework in the Republic of Lithuania

Abstract

It is recognised that the successful functioning of a state as a political organisation requires appropriate funds that are fi rst of all collected in the state budget. In his book Public Finance published back in 1892, Charles F. Bastable stated that ‘the collection of funds for state purposes and the use of the resources so obtained is [...] a vital part of the political organisation’. A state, in order to achieve the objectives set to it as a political organisation, must collect the funds required to implement these objectives, distribute and use them in a rational manner, i.e. conduct appropriate activities in the sphere of public fi nance. This is not possible without developing an appropriate regulatory framework for the accumulation and use of state funds manifested as a whole of relevant legal rules and their enforcement. At the same time, the development of an independent system of public fi nance and its regulatory framework should be viewed as an essential precondition of independence of a state. This is especially relevant for the Republic of Lithuania (hereinafter – ‘Lithuania’) which after the restoration of independence had to take immediate steps to build a system of its public fi nance as an independent state since previously Lithuania had had neither an autonomous budget nor an independent tax or monetary system, i.e. it had had no fi nancial independence. It is no accident that the Provisional Basic Law of Lithuania approved by the Law of 11 January 1990 already included provisions on the budgetary framework of Lithuania as an independent state. According to Article 47(1) of the Provisional Basic Law ‘the budgetary framework of the Republic of Lithuania shall consist of autonomous budgets of the State of Lithuania and