Lithuania, a country of three million people, takes over the reins of the EU for the next six months. A country ravaged by the economic downturn that is turning itself around.
We’re in Vilnius, the capital city of Lithuania. Euronews met with some of the entrepreneurs boosting the bottom line of Lithuania PLC.
Less than two years ago, three young brothers set up their own company producing electronic components and lasers for the manufacturing, healthcare et defence industries. Today, they sell their products to Germany, the United States and Japan.
“ We are a small country, everything goes here quite quickly, and I believe this is the right chance for a new company, as we have all the necessary financial tools, starting from major investors, venture capital funds, a very good banking system “, says Dominykas Vizbaras, CEO of Brolis semiconductors.
Back in 2009, Lithuania was mired in crisis. Its export-driven economy shrank by 15 percent. The government at the time decided to on a drastic cure: a raft of tough austerity measures. Ingrida Simonyte was the finance minister back then:
“ Nearly 1/5th of that were tax hikes, and the 4/5th were expenditure cuts of all sorts. The time span of this living beyond our means was quite short, so that’s why I guess it was much easier to kind of get back to a basic level because the problems had not turned structural. And in some other countries, I would assume that problems became structural. “
While other European countries mulled over what to do, the Baltic countries were the first to act. And in 2010, Lithuania’s economy started growing again.
But the cuts were uncompromising: lower salaries, lower pensions, lower unemployment benefits, a freeze on the minimum wage and an increase in VAT.
Today, the average wage in Lithuania is just over 2,000 litas, a little more than 600 euros per month.
“ If we have the minimum wage which is now 850 litas (246 euros), and during heating period, when we have to pay tremendous amounts for heating and some other housing facilities, about 50% of that sum goes just for heating, and of course we are human beings, we have some other needs you know ! “, complains Snieguolė Andruškaitė, a public sector trade unionist.
Lilija Morkuniene, a pensioner, who retired a year ago, considers herself privileged with her 300 euros a month. But she worries about the number of people leaving the country: “ Half a million people emigrated from Lithuania, half a million, yes. And it’s a very big problem in Lithuania. Only old people are left. “
“ People want to leave better and better and if you have opportunities, it’s simple, you try it “ , explains a student.
“ Going away from the problems is not the solution. We must come back, we must create our own future here “ , adds a fellow student.
“ In western Europe, it’s very boring to live because everything is achieved, and in Lithuania it’s very interesting because you can strike it big here! “