EU recommendations urge Lithuania to liberalize labor market

Conclusions drafted by the European Commission emphasize the need for Lithuania to take additional measures to enhance participation in the labor market by youth, unskilled workers and people of older age.

Regardless of the economic growth, Lithuania's unemployment rate remains above 10 percent, with 211,500 registered jobless people in the country.

Consequently, Lithuania is asked to revise its labor laws, as far as they are related with flexible contract terms and conditions, firing provisions and flexible work hours, improve the efficiency of internship schemes in order to employ more young people.

Just like in other European countries, liberalization of labor relations in Lithuania is mainly opposed by trade unions.

The EU report also urges Lithuania to make planned progress to correct the excess deficit in time. Lithuania's government seeks the fiscal deficit – the gap between spending and revenue – to be under 3 percent of the gross domestic product (GDP) this year.

In order to collect more budget revenue, Lithuania is advised to consider the possibility of raising taxes that least affect economic growth, such as housing and environment taxes including taxes on cars.

Furthermore, Lithuania was urged to adopt legal acts on full reform of the pension system and implement all aspects of reforms package for state-run companies, take action to improve energy efficiency of old buildings.

Lithuania's economy grew 6 percent last year, with 2.5 percent GDP growth expected this year.

EU proposals are advisory and it is up to national administrations whether to take them into consideration.