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Lithuanian government signs landmark agreement

  • 2009-10-30
  • Oskars Magone

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

VILNIUS 's The Lithuanian governmenthas signed a landmark agreement with the country's largest unions andbusiness associations on cuts to salaries and social benefits.

"This agreement, which follows monthsof negotiations, enshrines our common responsibility and mutualcommitments for preserving Lithuania's solvency and restoring itscompetitiveness," Lithuanian Prime Minister Andrius Kubilius said.

In the document, which is known as the"National Agreement", the government pledges not to raise taxes 'sexcept for a 2 percent increase to social insurance 's until theagreement expires in 2011. It also says the government will ensuresolidarity with the trade unions in making cuts, and will work toensure that the most vulnerable social groups would be leastaffected.

Businesses, meanwhile, agreed toincrease their social responsibility.

The National Agreement covers a widerange of topics, including pensions, maternity benefits, and publicsector wages. It also outlines the dissolution of some stateinstitutions.

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

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

"This is just another publicrelations campaign designed to mask the tragic reality of today'serosion of humane government policy," Valentinas Mazuronis of theOrder and Justice Party told Lietuvos Rytas.

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

Some of the unions that initially tookpart in the negotiations reportedly walked out because the governmentwas unwilling to meet their demands.