Lithuania may lose competitiveness if it abandons new labor code – IMF

Labour Code
DELFI (R.Daukanto pieš.)

An IMF team completed its work in Lithuania on Tuesday.

“Policies under the ‘New Social Model‘ would benefit from adjustments. Abandoning the passed labor code following the presidential veto would be a missed opportunity to achieve needed reforms,” Christoph Klingen, the IMF mission chief for Lithuania, said in a statement at the conclusion of the visit.

“Given the procedural constraints, adopting a new code and expeditiously addressing remaining legitimate concerns of social partners through amendments appears preferable,” he said.

Lithuanian Prime Minister Algirdas Butkevičius welcomed the IMF team’s recommendation and reiterated his opinion that the Labor Code should be adopted, with additional issues to be discussed with social partners at a later stage.

Lawmakers are expected to make a final decision this week on the Labor Code, which has provoked a lot of discussions in the country.

President Dalia Grybauskaitė and trade unions are calling for more concessions to employees, while employers want the adopted Labor Code to be enacted, saying that it would liberalize the labor market and lead to the creation of more jobs.

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