10 years in the EU: Evaluating the progress of Lithuanian welfare state.Comparative Welfare StateLecturer:Anu TootsTallinn University, School of Governance, Law and SocietyTallinn, EstoniaJanuary, 2018Matin AkbarliINTRODUCTIONLithuania gained independence again in 1990. He became an EU member in 2004 and since then has benefited from all the advantages of becoming an independent state and being an equal member of the European community.This was the first step of successful future, so it was opened to Europe by joining the European Union, which was a great and important economic event for Lithuania, with its large European markets and opportunities. Because of the collapse of the Soviet Union in the 1990s, it had a negative impact not only on Lithuanian but all the Soviet countries. As we know, the economy was planned in Soviet times, which would not be easy for an independent state, especially for a state with a goal of moving to a free market. The system was almost completely should rebuilt. The transition from the Soviet socialist to the washington consensus system would be a long and difficult period. As we know, joining the European Union was not an easy one, and it doesn’t happen in one night. There were a number of reforms and changes that the country had to do before it was difficult for a small state such as Lithuania The European Union has been helping and granting subsidies, economic development, expanding trade, and advising the state in many ways, Lithuania had a Soviet-closed economy, with the European countries,after the collapse of the Soviet Union, became the main trading partner of Lithuania, and thus began to receive material assistance from the European Union to further improve and modernize the Lithuanian state management system and began to apply the experiences of European countries on their country.Nevertheless, after more than 20 years of Lithuania’s transition, it is still among the laggards of the EU, according to the following social indicators: poverty, deprivation, income inequality, shadow economy, and minimum wage; the social protection expenditures are also among the lowest in the EU .Moreover, Lithuanian society faces the challenges of the 21st century: the aging of the population and the increase in outward labor migration. The global financial and economic crisis, mostly experienced in Lithuania between 2009 and 2010, has had a significant impact on the Lithuanian social welfare system.Demographic Change and Population AgeingLithuanian society is aging not only because of the declining birth rates but also because of the large migration that has been observed since the 1990s. many studies document a high immigration rate in Lithuania. From 1990 to 2007 Lithuanian society lost 10% of its population due to immigration (about 473.5 thousand people). The last census data of 2011 is a decade more than e. From 2001 to 2011, the population of the country decreased by 12.6% (440.6 thousand). The main reason for the fall was the decrease in international migration (76.9%) and population naturally 101.9 thousand (23.1%).Despite an optimistic tendency in the development of total fertility rate in Lithuania, Eurostat estimates predict negative population estimates. Population projection will not only be based on the assumptions of fertility and mortality but also on the highest external migration in the EU. The studies are influential in the period of major work that left the country. Such negative demographic trends due to high outward migration may have serious implications for the social and economic development of Lithuanian society.PENSIONThe Lithuanian pension insurance system is based on three principles: supported by the World Bank and implemented in many Central and Eastern European countries. The aging population, insufficient level of old age, and the development of a funded pension scheme for other European countries have created incentives for the Lithuanian government to apply for a scholarship. According to pension reform, the pension system is built with three columns. The first column is compulsory,state-run and non-funded (based on payment in Lithuania) based on existing contributions or taxes. The second column is a voluntary privately funded retirement plan that was introduced in 2004. The second column was funded from the mandatory state social insurance premiums. The third column is the additional voluntary funded individual retirement plan funded from the individual income of the insurance. It is active in Lithuania until 2004 for the growing number of retirees. However, two important sources of social insurance premiums began to decline when the financial crisis hit the country: public wages declined and unemployment increased. These changes led to a decrease in social insurance premiums, but the obligations were almost identical (see Figure 9). The state of the state social insurance budget and the ability to pay off the state budget have led politicians to review their contribution to the second funded column. As noted, the second column directs money from mandatory state social insurance contributions. The contributions to the second column will gradually increase. The starting point in Lithuania (2004) was 2.5%. However, due to the global financial crisis, the government should reduce its share (from 5.5% to 2% in 2009) . These measures are temporarily taken, but they are still in place. In 2012, the shareholding scheme temporarily decreased by 1.5%; In 2013, the stake was increased to 2.5% .The decline in the contribution of the state to the second pillar is that retirees will receive lower pensions than expected for future retirees. Other measures were also taken to balance the State Social Security Insurance Budget during the crisis: the level of pension payments for existing pensioners has dropped and debates on the higher age have been started. The Social Insurance Pensions Reduction Act came into force in December 2009. This law is based on reimbursement of social insurance contributions for a period of two years, increasing the basic part of the pension and reducing the additional part. However, this law was not applied to persons with very few elderly or disabled orphans. Retirement pensions and social benefits have dropped to those who are still in the workplace. Social security for employers (elderly pensions, periods of pensions, compensation for special working conditions) were cut off for their insured income. As a result, retirees’ scholarships dropped by about 8% In the EU-27 countries, in 2008, 13% of GDP fell to pensions, and for Lithuania it was almost 10% in the same year. After cutting pension pensions in Lithuania, the same figure for the EU-27 was 13% of GDP, and Lithuania dropped to 8%. Another significant indicator of suspicion was in Lithuania, 29.5% in 2008, and 27% in the EU (according to Eurostat data), 16.5%. Thus, the pension sector was only fiscally acceptable, which helped reduce the social vulnerability of the population. There was another way to solve the problem of retirement age. According to the law, the gradual increase in retirement age in 2011 was 65 years until 2026. By 2011, the retirement age for women was 60 years and 62.5 for men. The retirement age was a positive measure, but in the long run. According to the results of the 2011 Long Term Development Trends in Lithuania pension system, the postponement of retirement age can have a positive impact on the outcome of social insurance by 2025. HEALTH POLICY Prior to the economic crisis of 2008, the following goals were achieved in Lithuania: healthcare accessibility and quality improvement; implementation of preventive programs; increase in salaries of healthcare workers; development of private health sector; modernization of healthcare facilities. Wages increase in 2003 and 2008 to prevent the relapse of doctors . Hospital network reconstruction (2003-2008) covered two goals : 1. Establish a network that provides a more effective service through the merging of large legal entities; 2. Redistribution of hospitals with a more complex structure of services and strengthening the infrastructure of local hospitals for the treatment of widespread diseases, as well as the diagnosis and treatment of complex diseases in large hospitals. The above reforms and goals continued throughout 2010-2011. Health care facilities were neither closed, nor otherwise rebuilt during the economic crisis. However, there were major problems: Long-term waiting lists for bed and polyclinic treatment; requirements for longer patient visits; unequal opportunities for first aid and illegal payments to healthcare workers One of the challenges facing health policy during the economic crisis was health care financing. In 2009, Health Insurance revenues declined, but increased in 2010 and dropped further in 2011 . In 2010, the increase can be explained by mandatory minimal contribution to health insurance for unemployed and those employed abroad, but public health services in Lithuania are used. The measure was taken to prevent the abuse of the public health system for those living in the country who did not make any contribution to the health insurance budget but who sometimes used health services. In 2009, the structure of health insurance also changed. Individual income tax has been deducted from independent health insurance (9%): currently, 6% of income tax is paid by employers and 3% by employers . During the economic crisis, attention is focused on prophylactic health programs and primary health care financing. Due to the reduction of funding, the inclusion of new healthcare programs into the list of programs funded by the State Health Insurance Fund from the compulsory state budget has been suspended. On the other hand, there were no funding programs for prevention, nursing and long-term care reduction. Obligations to increase salaries of health professionals have also been the same In 2010, Lithuania’s overall health expenditures decreased This is only 7% – the lowest in the EU. It is higher than Estonia (6.34%) and Poland (6.98%).Labour Market PolicyAlong with demographic and economic difficulties, preparation for European Union membership and entry in 2004 had a great influence on the content of national market policy: labor market institutions strengthened, European legal norms national legislation, national employment policies harmonized with European Employment Strategy. As part of its preparations for joining a common EU employment policy, national targets were identified, focusing on the development of active labor market policy, the structural development of the labor market, and additional support for the most vulnerable members of society. In general, “the Lithuanian labor market policy has been increasingly influenced by economic and labor migration and global economic changes, and the demand for creating a stable, flexible and secure labor market in Lithuania has been born”ConclusionThe Lithuanian welfare state faces many challenges of the twenty-first century: out-migration, population aging, youth unemployment and long-term unemployment. As a result of all these difficulties, the financial sustainability of the social protection system is under threat. The financial and economic crisis has intensified the financial problems of the social protection and social security has been reformed to reduce the responsibility of the state, but it has increased the responsibility of the individual / family to meet the demands of increasing social risks.Given the continuing outward migration, aging of the population, and the preferences of the ruling elite for the marketing and liberalization of economic and labor market relations, the Lithuanian welfare system may foresee that it will continue on its way towards a liberal welfare state regime.Cognitive Europeanisation, understood as the exchange of ideas through the Open Coordination Method between EU Member States and best practices, does not give visible results on social policy. During the crisis, the Lithuanian government governed the social security unit in such a way as to move away from the basic principles of the European Social Model, such as solidarity, universalism and generosity.The future of social development in Lithuania will depend on the collective efforts of political, administrative elites and ordinary people. The result suggests that the liberal approach has shown a strong attitude in the Lithuanian welfare state system.