Pestel (pesl) Framework Lithuania + Spain

1.1. PESTEL (PESL) framework

Political factors. Lithuania is a parliamentary democracy with a relatively stable government. Since 2004 it is a member of European Union and has implemented a Schengen Convension in 2007, which has eliminated border controls with other Schengen members while simultaneously strengthened border controls with non-member states. Politicians expect to implement Euro currency as a home currency by 2014. The general corporate tax rate in Lithuania is 15%. Micro companies (those with up to 10 employees and up to LTL 500,000 income per year) may be entitled to a reduced rate of 5% (http://www.taxrates.cc/html/lithuania-tax-rates.html). In addition to withholding a 3% pension social insurance and 6% health insurance contributions on behalf of an employee, an employer must contribute to social insurance at a rate between 30.98% and 31.7% of the employee's gross salary, depending on the risk group (http://www.taxrates.cc/html/lithuania-tax-rates.html).

Spain is a parliamentary monarchy. As well as Lithuania it is a member of European Union and Schengen Agreement. Although, Catalan and Basque nationalists, desiring to obtain autocracy remain an issue for Spain, overall, Spain is politically stable. According to the Economist intelligence unit, due to the high taxes, Spain continues to experience significant tax fraud, particularly among small businesses; the black economy is estimated to account for around 20% of GDP.

Economic factors. Unemployment rate in Lithuania increased from 13,7% in 2009 to 17,8% in 2010 (International Monetary Fund, 2011). Inflation rate is also rising and it was at 3,8% in March of 2011. However, latest predictions for Lithuania economy suggest that economy will grow by 5,8% in 2011 and 4,7% in 2012. Also, forecast for this year shows that GDP would grow 3,4%. Economic sentiment indicator shows the country's economic health. In Lithuania it increased from -5% to 1% in March and this show that there are more optimists than pessimists (Ministry of Economy of the Republic of Lithuania, 2011). In Spain unemployment rate is higher and increased from 18% in 2009 to 20,1% in 2010. However, the inflation rate was almost the same like in Lithuania.

The average monthly wage in Spain was 1802 EUR in the first quarter of 2010 (http://www.econstats.com). While the average price for the trip visiting Baltic countries and coast is 1599 EUR. Considering the economic situation in Lithuania and Spain we could expect that tourism industry will slowly expand in near future.

Socio-cultural factors. By age, 15.7% of the population was under 16 years of age, 41.8% was between 16 and 44 years old, and 42.5% was 45 years old or older. 97.4% of Spanish population is literate. However, according to a survey by la Fundación de las Cajas de Ahorros (FUNCAS) 49.7% of Spaniards