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VILNIUS (Reuters) – Lithuania is setting up a 130m-euro loan fund for companies affected by China’s actions as the country faces economic pressure in Beijing after allowing Taiwan to open a de facto embassy in Vilnius.
Lithuanian businesses reported that they could not export or import to Taiwan, Taiwan, which governs itself, as China sees itself as part of its territory, opening a delegation office last year.
China has pressured multinationals to break ties with Lithuania or to be excluded from its market, a strong move that has led companies to political conflict and put Beijing on the path to a clash with the European Union.
Lithuania’s European Competition Commissioner Margrethe Vestager has promised companies that state aid will be reviewed as soon as possible, the economy ministry said on Friday.
In addition to providing a loan of up to € 10 million to companies, Lithuania wants to allow affected companies to join the next € 200 million loan fund, which is being set up to deal with the effects of the COVID-19 pandemic.
“China’s actions affect the EU’s single market, so a strong and coordinated European political response is needed to discourage such actions,” Minister Ausrine Armonaite said in a statement.
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