Viewing cable 09VILNIUS706

09VILNIUS7062009-12-23 09:07:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius

DE RUEHVL #0706/01 3570907
P 230907Z DEC 09
C O N F I D E N T I A L VILNIUS 000706 
E.O. 12958: DECL: 12/23/2019 
Classified By: Acting Deputy Chief of Mission John M. Finkbeiner for re 
asons 1.4 (b) and (d). 
¶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. 
¶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 
relations department. 
¶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. 
Labor regulations 
¶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. 
Pension reform 
¶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." 
¶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 
¶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." 
¶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.