International Herald Tribune
The Associated Press
Monday, October 27, 2008
VILNIUS, Lithuania: Four center-right parties agreed Monday to form a coalition government after sweeping a majority of seats in a parliamentary election.
Led by the victorious Homeland Union, a conservative party that is critical of Russia, the potential partners warned that Lithuania was headed for tough economic times and that reforms were urgently needed.
“We clearly understand the challenges that Lithuania is facing as a global financial crisis is looming and are ready to take full responsibility for the future of the country,” the parties said in a statement.
The Homeland Union leader, Andrius Kubilius, a former prime minister, was likely to be nominated by the president to form the next government.
The outcome showed voters’ concerns over double-digit inflation and fears that the global financial crisis could hit growth and jobs in the Baltic country of 3.4 million people.
The economy is the main challenge facing the next government. But it is also likely to face a delicate balancing act in relations with Russia, an important energy supplier.
Kubilius said Monday that Homeland Union wanted to control the defense, economy, finance and foreign ministries. The party won 44 seats in the parliamentary elections. A first round took place two weeks ago, with runoff elections Sunday.
The other coalition parties – the National Revival Party, the Liberal Movement and the Liberal and Centrist Union – won a combined 35 seats, giving the center-right bloc 79 votes in the 141-member legislature.
The governing Social Democrats took 26 seats, losing their grip on power in the former Soviet republic, which regained independence 17 years ago and joined the European Union and NATO in 2004.
Kubilius has said he would soften the blow of the economic slowdown by reducing personal income tax and by closing tax loopholes so that budget revenues do not suffer too much.
Gross domestic product growth slowed to 3.1 percent in the third quarter, data showed Monday, down from 5.2 percent in the previous three months. Economists expect the pace of the slowdown to pick up.
Relations with Moscow could also become cooler because the center-right parties criticized what they see as a new aggressive approach by the Kremlin after Russia’s brief war with Georgia in August.
But the government faces likely growing dependence on Russian energy resources after a planned shutdown of the Soviet-era Ignalina nuclear power plant at the end of 2009.