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Matteo Meyer, World News Anchor

Featuring:

Cameron Dolbow, Macro Economic Analyst

Gina Song, Representative from Ministry of Finance

Margaret Xiao, Representative from Lithuanian Labor Exchange

Kevin Xiong, General Economics Analyst

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Lithuanian Politics

Less than 51% of voters turned out in the last few elections

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Current Economic Situation

Presented by Cameron Dolbow

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Gini Coefficient of the EA and Lithuania

Source: Eurostat

100 Total Inequality

0 Total Equality

30.8 Euro Area

36.9 Lithuania

24.4 Slovenia

27.0 Germany

45.0 U.S.

Also Relative to Other Countries

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At-Risk-of-Poverty Rate of the EU and Lithuania

Source: Eurostat

28.3%

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Unemployment Rate of the EA and Lithuania

Source: Eurostat

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Youth Unemployment Rate of the EA and Lithuania

Source: Eurostat

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Inflation Rate of the EA and Lithuania

Source: Eurostat

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GDP Growth of the EA and Lithuania

Source: Eurostat

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How the Euro Affects the EU

Presented by Kevin Xiong

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Terms of Membership for EU Countries

Price stability

  • 2.2% inflation in Lithuania

Sustainability in the government budget

  • 0.6% public deficit in Lithuania
  • 43.8% government debt in Lithuania

Normal fluctuation margins

A low long-term interest rate

  • 0.31% in Lithuania

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How Using the Euro Affects Policy

Limits possible monetary and fiscal policies Lithuania can implement when in need of economic reform

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Solutions

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Creating Opportunities for Workers

Presented by Margaret Xiao

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Current Labor Market Situation

Structural problems in education, regulations, and labor policy lead to instability of young people’s jobs

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Problem: businesses face a shortage of qualified labor.

Source: Eurostat

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Problem: mismatch between supply and demand.

Source: Cedefop Skills Forecasts (2015)

41%

*Elementary occupations: simple tasks

*

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Current Labor Market Situation

Problems today can lead to long-term damage for young people

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The Solution

  • Revamp vocational education and apprenticeship
  • Educate students about benefits of vocational training
  • Create incentives for enrollment and hiring
    • Work Opportunity Tax Credit (WOTC)
      • Already implemented in U.S.
  • Establish institutions outside of major cities

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Reforming the Flat Tax System

Presented by Gina Song

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The Current Tax System

(“Lithuania Individual ...”)

(“Lithuania Individual ...”)

19% social security tax

20% flat income tax

Taxable Income

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Gini Coefficients Before and After Taxes

Source: OECD Income Distribution Database

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The Solution

  • Progressive income tax system
  • Progressive social security tax
  • Changes in the VAT tax
    • Lower for necessities
    • Raise for luxurious spending

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Matteo Meyer, World News Anchor

Featuring:

Cameron Dolbow, Macro Economic Analyst

Gina Song, Representative from Ministry of Finance

Margaret Xiao, Representative from Lithuanian Labor Exchange

Kevin Xiong, General Economics Analyst

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Appendix

Amadeo, Kimberly. “What Countries Use the Euro?” The Balance, www.thebalance.com/what-is-the-euro-3305928.

“Bank of Lithuania Projections: Challenges in the Labour Market Will Constrain Economic Growth.” Bank of Lithuania, 19 Dec. 2017, www.lb.lt/en/news/bank-of-lithuania-projections-challenges-in-the-labour-market-will-constrain-economic-growth.

Bruce, Stephen. “European Employment Law 101: Employment At-Will Is Truly a Foreign Concept.” HR Daily Advisor, 8 Apr. 2013, hrdailyadvisor.blr.com/2013/04/07/european-employment-law-101-employment-at-will-is-truly-a-foreign-concept/.

“Definition of Price Stability.” European Central Bank, www.ecb.europa.eu/mopo/strategy/pricestab/html/index.en.html.

“Earnings and Wages - Average Wages - OECD Data.” OECD, data.oecd.org/earnwage/average-wages.htm.

“Euro Adoption.” EUR-Lex, eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aec0014.

“Exchange Rate Policy.” Bank of Lithuania, www.lb.lt/en/mp-exchange-rate-policy#ex-1-2.

“GDP and Spending - Real GDP Forecast - OECD Data.” OECD, data.oecd.org/gdp/real-gdp-forecast.htm.

“GDP and Spending - Real GDP Forecast - OECD Data.” OECD, data.oecd.org/gdp/real-gdp-forecast.htm.

“Gini Coefficient By Country 2020.” World Population Review, 17 Feb. 2020, worldpopulationreview.com/countries/gini-coefficient-by-country/.

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Appendix

“Going for Growth 2017.” OECD, 2017, www.oecd.org/economy/growth/Going-for-Growth-Lithuania-2017.pdf.

“How Can Governments Respond to Income Inequality?” OECD ILibrary, OECD, 15 Dec. 2015, www.oecd-ilibrary.org/social-issues-migration-health/income-inequality/how-can-governments-respond-to-income-inequality_9789264246010-7-en;jsessionid=klbQUyOrWRF6eYJtH07PE7zl.ip-10-240-5-50.

“How Europe Spends Its Money.” The Economist, 17 Sept. 2015, www.economist.com/graphic-detail/2015/09/17/how-europe-spends-its-money.

“Inequalities in Lithuania.” Make Europe Sustainable for All, June 2019, gcap.global/wp-content/uploads/2019/06/9.3.a-report-LT.pdf.

“Inequality Hurts Economic Growth, Finds OECD Research.” OECD, www.oecd.org/newsroom/inequality-hurts-economic-growth.htm.

Jahnke, Wilfried, and Bettina Landau. “Effects of a Single European Monetary Policy.” BIS, www.bis.org/publ/confp04m.pdf.

“Lithuania - Other Taxes and Levies.” KPMG, KPMG, 2 Sept. 2019, home.kpmg/xx/en/home/insights/2015/10/lithuania-other-taxes-and-levies.html.

“Lithuania Adopts State Budget with Higher Corporate Tax on Banks.” Baltic News Network, 18 Dec. 2019, bnn-news.com/lithuania-adopts-state-budget-with-higher-corporate-tax-on-banks-208609.

“Lithuania Government Budget Deficit 2019.” Countryeconomy.com, countryeconomy.com/deficit/lithuania.

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Appendix

“Lithuania Individual - Taxes on Personal Income.” PwC, 2020, taxsummaries.pwc.com/ID/Lithuania-Individual-Taxes-on-personal-income.

“Lithuania Moves to Tackle Challenges Posed by Emigration.” Foreign Policy Research Institute, 29 Mar. 2016, www.fpri.org/article/2016/03/lithuania-moves-tackle-challenges-posed-emigration/.

“Lithuania National Debt Clock: How Much Is The Government Owing In 2020?” Commodity.com, 30 Dec. 2019, commodity.com/debt-clock/lithuania/.

“Lithuania: Skills Forecasts up to 2025.” Cedefop, 31 Oct. 2016, www.cedefop.europa.eu/en/publications-and-resources/country-reports/lithuania-skills-forecasts-2025.

“Measuring Progress.” European Commission, ec.europa.eu/eurostat/web/ess/about-us/measuring-progress.

“OECD Income Distribution Database (IDD): Gini, Poverty, Income, Methods and Concepts.” OECD, www.oecd.org/social/income-distribution-database.htm.

“The Pros and Cons of a Progressive Tax Policy.” Investopedia, 29 Jan. 2020, www.investopedia.com/ask/answers/042715/what-are-pros-and-cons-progressive-tax-policy-and-who-benefits-most-it.asp.

Schimelpfening, Nancy. “Why Do People Commit Suicide?” Verywell Mind, 4 Feb. 2020, www.verywellmind.com/why-do-people-commit-suicide-1067515.

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Appendix

“The Social and Employment Situation in Lithuania.” European Parliament , Policy Department A: Economic and Scientific Policy, 2013, www.europarl.europa.eu/RegData/etudes/note/join/2013/507447/IPOL-EMPL_NT(2013)507447_EN.pdf.

“Social Exclusion.” World Health Organization, 25 Sept. 2017, www.who.int/social_determinants/themes/socialexclusion/en/.

“Statistical Overviews on VET - Lithuania.” Cedefop, 14 Mar. 2018, www.cedefop.europa.eu/en/publications-and-resources/country-reports/statistical-overviews-vet-lithuania.

“Vocational Education and Training in Lithuania.” Cedefop, 2013, www.cedefop.europa.eu/files/4128_en.pdf.

“World Bank Open Data.” The World Bank, 13 Feb. 2020, data.worldbank.org/.

“Your Key to European Statistics.” Home - Eurostat, ec.europa.eu/eurostat/web/main/home.

“Bad Economic News Increases Suicide Rates, Research Shows.” World Economic Forum, 7 June 2019, www.weforum.org/agenda/2019/06/bad-economic-news-increases-suicide-rates-new-research/.

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Matteo Meyer, World News Anchor

Featuring:

Cameron Dolbow, Macro Economic Analyst

Gina Song, Representative from Ministry of Finance

Margaret Xiao, Representative from Lithuanian Labor Exchange

Kevin Xiong, General Economics Analyst

31 of 31

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