Employers establish new business council

On 2 December 2013, the four main employers’ associations in Lithuania signed a memorandum establishing a business council to coordinate their activities and promote sustainable economic development. The memorandum stipulates that the signatory parties will agree on all important proposals and decisions without restricting each other’s activities. The agreement also covers issues in the energy sector, in which business competitiveness is currently being threatened.

Memorandum signed by employers

On 2 December 2013, a memorandum establishing the Lithuanian Business Council was signed by the four main national employers’ organisations: the Confederation of Lithuanian Industrialists (LPK), the Investors’ Forum (IF), the Lithuanian Business Employers Confederation (LVDK) and the Association of Lithuanian Chambers of Commerce, Industry and Crafts (LPPARA) signed .

The memorandum states that Lithuania, like other European Union Member States, is making strong efforts to definitively overcome the economic crisis and to create conditions for a more competitive economy and higher employment levels, and seeking smart, sustainable and inclusive economic growth. The memorandum suggests that, to achieve this, Lithuania needs balanced regional development. The employers’ organisations also express concern over the energy sector; currently, energy dependence remains high, meaning that this sector has low competition and high energy prices.

Lithuania’s business goals

In signing the memorandum, the LPK, the IF, the LVDK and the LPPARA agreed to combine their efforts, expertise and experience to establish the Lithuanian Business Council, which will ensure economic growth, sustainability and business development, as well as considering what Lithuania needs to do to maintain rapid economic growth, enhance competitiveness, build an investment-favourable environment, and to improve business conditions and investment facilities.

The memorandum stipulates that the signatory parties will agree on all important proposals and decisions without restricting each other’s activities. The parties also agree to focus their efforts on the sustainable development of the Lithuanian economy.

The memorandum became effective on the date it was signed, and it will remain in place for an unlimited period of time. It may be terminated, with proper notice, by any signatory. Its immediate goal is to make the regulation of labour relations more flexible.

The Lithuanian Business Council also stated that it intends to pay more attention to the energy sector. LPK President Robertas Dargis commented that energy prices are rising and will probably continue to rise, and this poses a threat to business competitiveness. Business representatives have therefore said that they hope they will be able to participate in the creation of the country’s energy strategy.

Commentary

The changing global landscape poses challenges to long-term growth in Lithuania. There is also a mismatch between education and market needs. Skills demand and supply imbalances became particularly obvious during the economic crisis and this is a growing problem, given gaps in education and labour market policy. Migration policy is not being used appropriately to attract talent and lack of labour market flexibility and social policy do not encourage participation in the labour market.

Lithuania lags behind other European countries when it comes to attracting foreign investment. Innovative measures – such as public-private partnerships – need to be implemented to finance the investment that is needed. Effective use also needs to be made of European Union structural funds, and small- and medium-sized enterprises should be given greater access to funds.

Inga Blaziene, Institute of Labour and Social Research of the Lithuanian Social Research Centre

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