The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 18 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.
Over the past twelve months, Lithuania has made limited progress in implementing the 2012 CSRs. There has been progress on correcting the excessive deficit and Lithuania has also advanced the reform of state-owned enterprises, implemented changes to the second pillar pension funds and strengthened the measures to fight youth unemployment. However, increased efforts on these measures would be welcome.
Lithuania still faces important challenges with regard to fiscal sustainability, unemployment and social exclusion, the interconnectedness of its energy sector and energy efficiency. Strengthening policies to get the unemployed back to work, increasing the quality and efficiency of education and accelerating investments in energy and transport links with the rest of Europe would help boost medium- and long-term growth prospects.
2013 European Commission's recommendations for Lithuania in brief
The Commission has issued six country specific recommendations (CSRs) to Lithuania to help it improve its economic performance. These are in the areas of:
- Sustainable public finances
Lithuania has made good progress with reducing its deficit and should be on course to bring it below 3% of GDP in 2014. To achieve this it must continue with growth-friendly fiscal consolidation, while reform of the budgetary framework would lend additional stability. Property and environmental taxes are relatively low in Lithuania and the government should consider raising them as well as taking further steps to improve tax compliance.
- Pension reform
Demographic change will put pressure on Lithuania's public finances unless further action is taken. Current projections show that proportional expenditure on pensions in Lithuania is set to increase by approximately three times the EU average by 2060. To ensure the sustainability and adequacy of pensions Lithuania should implement a comprehensive pension reform.
- Tackling unemployment
Unemployment has been declining in Lithuania, but is still high compared to most other Member States. Lithuania should focus efforts on job search assistance and training for the long-term unemployed and low-skilled and could reinforce the efforts already made to tackle youth unemployment by introducing a youth guarantee and improving apprenticeships. It should also carry out a review of its labour law to identify unnecessary restrictions.
- Poverty reduction
One third of the Lithuanian population is at risk of poverty or social exclusion and a clear strategy is needed to combat this. The government has launched a reform of social assistance, intended to improve work incentives, but should put more emphasis on improving the employability of those on benefits.
- Reform of state-owned enterprises
Lithuania has made significant progress in reforming state-owned enterprises in order to increase competition and efficiency, however, a number of important steps still remain, including strengthening the independence of regulators.
- Energy market and efficiency
Lithuania should construct more physical interconnections of its power grids and natural gas infrastructure with neighbouring countries in order to avoid congestion, to stimulate cross-border trading, to enhance security of energy supply and to allow for a functioning energy market. It should also step up efforts to improve the energy efficiency of buildings as there are over 30,000 multi-apartment blocks with very high energy intensity.
See how Lithuania compares with other EU Member States in key areas
European Semester Documents