Lithuanian government signs landmark agreement

Oct 30, 2009
Oskars Magone

Lithuanian Prime Minister Andrius Kubilius hammered out the agreement after months of negotiations (Photo: Seimas)

VILNIUS – The Lithuanian government has signed a landmark agreement with the country's largest unions and business associations on cuts to salaries and social benefits.

“This agreement, which follows months of negotiations, enshrines our common responsibility and mutual commitments for preserving Lithuania’s solvency and restoring its competitiveness,” Lithuanian Prime Minister Andrius Kubilius said.

In the document, which is known as the “National Agreement”, the government pledges not to raise taxes – except for a 2 percent increase to social insurance – until the agreement expires in 2011. It also says the government will ensure solidarity with the trade unions in making cuts, and will work to ensure that the most vulnerable social groups would be least affected.

Businesses, meanwhile, agreed to increase their social responsibility.

The National Agreement covers a wide range of topics, including pensions, maternity benefits, and public sector wages. It also outlines the dissolution of some state institutions.

Budget cuts this year amount to approximately 7 percent of the country's GDP.

However, the National Agreement was met with opposition from some members of Parliament.

“This is just another public relations campaign designed to mask the tragic reality of today’s erosion of humane government policy,” Valentinas Mazuronis of the Order and Justice Party told Lietuvos Rytas.

Those that signed onto the agreement include the Cabinet, the Lithuanian Trade Union Confederation, the Lithuanian Labor Federation, Lithuanian Trade Union Solidarumas, Lithuanian Pensioner Union Bociai, Lithuanian Political Prisoners and Deportees Union, the Chamber of Agriculture, the Lithuanian Industrialists Confederation, the Lithuanian Chambers of Commerce, Industry and Crafts, the Lithuanian Business Employers' Confederation, the Small and Medium-sized Business Council, the Investor's Forum, and the Lithuanian business confederation / ICC Lietuva, the Baltic Course reported.

Some of the unions that initially took part in the negotiations reportedly walked out because the government was unwilling to meet their demands.

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