‘The long period during which the litas was directly pegged to the euro has undoubtedly had a huge influence on the investors interested in the Lithuanian IT market. Those who have not decided to invest in Lithuania yet, should be prompted to develop their businesses in Lithuania following the adoption of the euro. Nevertheless, it is not the currency name to which the market responds but rather the way a country and the business sector manage to take advantage of the changes,’ – says the general manager of CSC Baltic.
According to Mr. Ursulis, the trend when the demand for IT specialists greatly exceeds the supply in the Lithuanian market will continue. In such a competitive environment, every company will look for the measures that motivate employees most. The adoption of the euro may determine wage escalations but the head of CSC Baltic relates it to the increased labour productivity, company policy, general economic situation in Lithuania and in the neighbouring countries with which international companies have business relationship.
‘The employees are, of course, concerned about the wages they will receive after January 1. Just like other companies we will recalculate them in accordance with the procedure established by law. We will divide them by 3.4528 and will round the up to the digits after the decimal point to the employees’ benefit. It is natural that first it will be psychologically difficult for employees to see significantly lower wages. But if we talk about the future, I personally think that the adoption of the euro in Lithuania will determine the increase in wages as we will gradually approach the standards of Western countries’, admits Mr. Ursulis.
CSC Baltic sells IT services beyond the borders of Lithuania, therefore, payments in euros have been carried out for a long time. When preparing for the currency changeover in Lithuania company adopts the required finance and accounting, wage calculation and other systems and will update the Articles of Association of the company with regard to the replacement of litas with the euro in the value of shares.
Assessing the development of foreign investments in Lithuania, the adoption of the euro is a very important factor which reflects the stability of the country and positively affects the investors’ mood. The fact that the credit-rating agency S&P raised Lithuania’s long-term credit rating from BBB to A- in April 2014 serves as a proof of opening opportunities. Our membership in the euro zone was an especially important motive to make this decision.
‘Responding to the membership in the euro zone the credit rating agency Fitch moved Lithuania from the category ‘Eastern corner’ to the category ‘Eastern periphery’. This category includes Germany, Sweden, Norway, France, the United Kingdom, Switzerland and other countries having A- and higher ratings. It is obvious that the euro makes our country more attractive in the eyes of investors, however, I would not call that the determining factor in this context,’ comments Justinas Pagirys, the Director of Investment Development Department of Invest Lithuania.
He also adds that, for example, when Estonia adopted the euro, the number of investment projects did not change, and in Slovenia this number grew fractionally only.
‘Speaking of the IT services market in Lithuania we have been observing the trend for several years now that call centres which were prevailing in our country have been replaced by more complicated international centres providing financial, analytical, legal, IT services, and carrying out human resources and other functions. We forecast that the adoption of the euro may contribute to the enhancement of this trend – the reliability of Lithuania has been growing along with the payments becoming simpler. Naturally, other advantages Lithuania has, such as, high-quality employees, favourable business environment, have also become more attractive to investors,’ says Mr. Pagirys.
At the present time, Lithuania has more than 26,000 IT specialists and the number will increase by 3,200 graduates in the coming two years.