AN OVERVIEW OF LITHUANIA’S FIVE-YEAR MEMBERSHIP IN THE INTERNAL MARKET OF THE EUROPEAN UNION: PRE-ACCESSION EFFORTS, IMPACT AND CURRENT TRENDS
AN OVERVIEW OF LITHUANIA’S FIVE-YEAR MEMBERSHIP IN THE INTERNAL MARKET OF THE EUROPEAN UNION: PRE-ACCESSION EFFORTS, IMPACT AND CURRENT TRENDS

Summary/Abstract: . The overview of Lithuania’s five-years membership in the internal market of the European Union was written with three aims in mind, namely to review Lithuania’s pre-accession efforts, to discuss the current deepening of the EU internal market, and to analyse data on the impact of the internal market on the economies of the EU member states, including the case of Lithuania. The deepening of the internal market is discussed mainly through the case study of the Services Directive which was the flagship EU post-enlargement initiative in this area. The debate around this directive and its impact are in the focus of this overview. The article argues that the membership in the internal market of the European Union brought an important additional stimulus for growth to the relatively small and open economy of Lithuania. It brought motivation and pressure to modernize also its public administration. Lithuania’s long-term economic growth is intrinsically dependent on its further integration to the EU’s internal market and emerging opportunities to continue modernization of the Lithuanian regulatory system, improvement of the business environ¬ment, reducing the administrative and bureaucratic burden and creating a more effective public sector. The first quantitative calculations (in 2007) of the membership contribu¬tion to the growth of Lithuanian economy show that the impact of membership has led to an economic growth by 2.7 percentage points higher than in the no-membership scenario. This impact has been twice higher than forecasted by an ex ante assessment in 2002. The share of membership of the internal market and free trade in this additional GDP growth is 1.8 percentage points. The authors argue that the negotiations on the draft Services Directive were one of the key positive elements of Lithuania’s post-enlargement EU policy. Although Lithuania favoured a more ambitious scope of the directive contained in the first proposal of the European Commission, even the adopted ‘trimmed’ text is an important step forward as it opens new opportunities for Lithuanian and European services providers and should help them to recover after the economic crisis.

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