LFMI News and Activities: May 2012

In May, the Lithuanian Tripartite Council debated Government-proposed amendments to the Labour Code that envisaged the first-ever thorough revision of employment regulation in Lithuania. The package contains proposals that would render labour relations more flexible to correspond to the real needs of the market and the existing reality. Supporting the Government’s proposals, we took part in the sittings of the Tripartite Council and in the public debates, highlighting that these changes would be beneficial both for employees, employers and the unemployed. When misleading information appeared, intimidating society that the new Labour Code would bring back the times of serfdom to Lithuania, LFMI disseminated arguments, explaining that the proposed changes were not drastic liberalisation as depicted and that they would not impinge on the employees’ rights. Although the Tripartite Council agreed only on four minor proposals okayed by the unions, the Lithuanian Government later approved of the entire package of proposals and will submit it to the Parliament.

We also worked actively on the amendments to the Law on the Pension System Reform, currently considered at the Parliament, which would essentially change the second pillar pension system in Lithuania. In the last three years, the government kept slashing transfers to personal pension accounts, promising each time to restore the transfers to the initial level, 5.5%. However, instead of keeping the promise, the Government is now offering people to contribute to pension saving additionally, shelling out 1 to 2% from their own pockets. For people who will choose to do so, the government will grant a respective-size subsidy from the national budget. Taking part in Parliamentary sittings, we voiced our position that the Government-proposed pension model would increase people’s financial burden, while the permission to return to the state social insurance system (Sodra) would provoke people’s headlong decisions and complicate the situation of the social insurance in the future.

Just like every year, we announced the Tax Freedom Day in Lithuania, which fell on May 20 this year. LFMI proposed to declare this date the Taxpayer Appreciation Day and include it in the Law on Memorable Days, so honouring the people whose taxes are used to finance civil servants and state-owned areas, such as healthcare and social security, education, defence and the police.

At the end of May, we submitted to responsible institutions a euro exit and stable money plan. LFMI has worked out this plan in response to the on-going financial crisis in the euro zone which is increasing the probability that some euro zone countries will be forced or will choose to leave the euro zone. This would be a significant challenge both for the exiting country and the euro zone itself, but we believe that at the same time it would serve as a unique opportunity to re-establish sound currency and people‘s confidence in money. LFMI’s plan is tailored for countries exiting the euro zone to help them build stable and sound money. LFMI‘s proposal can be also used by the euro zone when attempting to strengthen the euro and to restore people‘s confidence in the single currency.

We also announced our traditional essay contest Liberty Studies and invited students and self-studying people to analyse the price phenomenon – how the price is formed and what role it plays on the market.