Lithuanian Prime Minister Gintautas Paluckas announced his resignation on July 31 following a widening corruption scandal involving close family members, which has severely undermined public trust in the nation’s political leadership. His decision marks the collapse of Lithuania’s 19th government less than a year after its formation, plunging the Baltic state into renewed political uncertainty.

The resignation came after an investigation by Lithuania’s Financial Crime Investigation Service (FNTT) uncovered possible misuse of over €170,000 in European Union development funds. These funds were allocated to an electric boat charging facility project in a village without direct water access – casting doubt on the project’s legitimacy from the outset. The project was managed by UAB Dankora, a company co-owned by Paluckas’ sister-in-law.

Further scrutiny revealed that a significant portion of the public funds allocated to Dankora was used to purchase battery systems from UAB Garnis, a company in which Paluckas holds a 49 percent stake. This apparent conflict of interest and misuse of EU funds became the heart of the controversy, ultimately forcing Paluckas to resign amid mounting political and public pressure.

Until last week, Paluckas had resisted calls to step down, despite two pretrial criminal investigations launched into his financial affairs. President Gitanas Nausėda, who had initially shielded Paluckas from political fallout, was compelled to change course after FNTT raided UAB Dankora’s offices and separately searched Paluckas’ brother’s apartment, exposing deeper family involvement in the scandal.

The situation escalated rapidly following a joint investigative

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