C O N F I D E N T I A L VILNIUS 000706
E.O. 12958: DECL: 12/23/2019
TAGS: PGOV PREL SMIG SOCI ELAB LH
SUBJECT: AMBASSADOR'S INITIAL CALL ON SOCIAL-SECURITY
Classified By: Acting Deputy Chief of Mission John M. Finkbeiner for re
asons 1.4 (b) and (d).
Â¶1. (C) In her first meeting with Minister of Social
Security and Labor Donatas Jankauskas, Ambassador Derse heard
that emigration is a problem for Lithuania as workers seek
better opportunities elsewhere in the EU and usually do not
return, that the GOL is moving forward with overhauling its
debt-laden pension system, and that a planned shift of
responsibility for labor issues from this ministry to another
has been delayed because of the economic crisis. The
Ambassador voiced concerns she has heard from American
businesses about the need for more flexible labor rules, said
she would work to attract U.S. investors to Lithuania, and
said the Embassy would provide what assistance it could to
help Lithuania in the areas of equal opportunity and
nondiscrimination. End summary.
Â¶2. (U) The Ambassador met December 17 with Donatas
Jankauskas, Minister of Social Security and Labor. Also
participating were Vice Minister Audrone Morkuniene and Rita
Skrebiskiene, director of the ministry's international
Â¶3. (C) Jankauskas said that the GOL is concerned that
Lithuania continues to lose emigrants to other EU countries.
He said middle-aged workers seek higher paying jobs elsewhere
in the EU, often so that they will be able to repay bank
loans they took in the boom years that followed Lithuania's
2004 EU accession. Younger people, he said, often go abroad
to study, which frequently is followed by job offers abroad.
While some emigrants do return to Lithuania, most do not,
said Skrebiskiene. Even with this outflow of labor, the
officials said, unemployment has been high since the start of
the financial crisis more than a year ago. And even with
jobs less plentiful in other EU countries, Lithuanians
continue to emigrate in search of work.
Â¶4. (C) The Ambassador said that businessmen had praised
Lithuania's educated and multilingual workforce as one of its
great advantages, and that she would like to see increased
trade and investment between the United States and Lithuania.
But, she said, American businessmen had told her that labor
regulations, particularly regarding wages and hours, were so
rigid as to discourage investors. The minister agreed that
reforms were needed, and said the GOL was working on them.
He said his ministry and the Ministry of Economy were jointly
working on the issue and "we think it will not be too
difficult to make these administrative changes." He said an
overhauled labor code also was being considered, but that
such a major step would be further in the future. "We have
our social partners in the National Agreement, and we're
trying to keep social peace. For the next year, rules on
labor relations will be amended only in conjunction with our
social partners in the National Agreement." Two months ago
the GOL signed what it calls the "National Agreement" with
major labor unions and organizations representing business,
employers and investors. In it, the government pledged to
refrain from tax increases or changes in labor law before the
end of next year without consulting with those partners. The
Ambassador told the minister that she wanted to work with the
GOL on proposals to increase U.S. investment, and would
closely follow the GOL's labor reform efforts.
Â¶5. (C) Jankauskas said the GOL also is continuing with
reform of its pension system, which over the past two decades
"became too complex and not transparent." The
social-security system, known as SODRA, also is mired in
debt. The GOL in recent years has allowed workers to direct
some of their pension withholdings to private pension funds
rather than to the state-run SODRA fund. The next phase,
which Jankauskas said he hoped would be introduced in the
Seimas (parliament) in the spring and take effect in 2011,
would allow additional, voluntary contributions to private
pension funds, but with some degree of government guarantee
of the money. "We want to separate state support and social
insurance and let people with higher pay have that reflected
in their pensions."
Â¶6. (C) When the current government took office just over a
year ago, Prime Minister Andrius Kubilius announced plans to
shift responsibility for labor issues from Jankauskas'
ministry to the Ministry of Economy, which would be restyled
as the Ministry of Innovation, Business and Labor.
Jankauskas told the Ambassador that that plan still existed,
but had been delayed because of the economic crisis. "The
Labor Exchange now is dealing with social problems," he said.
"But the Ministry of Economy will take over long-term
Families, equal opportunities
Â¶7. (C) Jankauskas said the shift of labor issues to another
ministry would allow his staff to focus more energy on
supporting families. He cited the 2008 adoption by the
Seimas of the "State Concept of a Family," which defined a
family as "a community of closely related persons, created on
the basis of the marriage of a man and a woman." He said
Lithuania must "more intensively support families by
supporting work and study and encouraging young couples to
have families and children and to stay in Lithuania, because
our demographic outlook is not very bright."
Â¶8. (C) The Ambassador said she would like to work with the
ministry on issues of equal opportunity and
nondiscrimination, and she congratulated the minister on the
recent opening in Vilnius of the European Institute for
Gender Equality, an EU body. She said she hoped to establish
a good relationship with the institute and help foster equal
opportunities for all. She also said she hoped to welcome
President Obama's new Ambassador for Global Women's Issues to
visit Lithuania for discussions on equal opportunity and
other women's issues.