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Lithuania: Center-Left Parties Likely to Win


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Risk Category Year Ago Current 07/12 Worst Case Best Case Worst Case Best Case
Political Risk 71.5 71.0 64.5 76.5 66.0 79.0
Financial Risk 31.0 34.5 36.0 38.5 30.5 39.0
Economic Risk 33.5 36.0 33.5 36.5 29.5 38.5
Composite Risk 68.0 70.8 67.0 75.8 63.0 78.3
Risk Band Mod. Low Mod. Low Mod. Low

Center-Left Parties Likely to Win October Election
Lithuania’s center-right ruling coalition is limping toward the next parliamentary election in October 2012 and it is unlikely that the governing partners will retain power after the vote.
The center-right Homeland Union-Lithuanian Christian Democratic (TS-LKD) Party heads the current coalition after it received 19% of the vote during the 2008 election. The TS-LKD negotiated with the Liberal Movement, Liberal and Center Union and the National Resurrection Party to form a government that currently controls 80 seats out of 141 in Lithuania’s parliament, which is known as the Seimas. Andrius Kubilius, leader of the TS-LKD, assumed the role of prime minister for the second time, after having served from 1999 to 2000.
After navigating a sharp economic decline during the global recession, support for the ruling coalition has gradually declined. Frustration with ruling governments has been part of the normal political cycle in Lithuania since its independence. In general, parties have difficulty maintaining long-term popularity, leadership personalities are divisive and the public throws its support behind populist agendas. In addition, Lithuania’s fractious political atmosphere lends itself to weak coalitions, which the current government in power exemplifies.
In September 2011, the National Resurrection Party collapsed and the Liberal and Center Union absorbed its membership. The right-wing Lithuanian National Union, a faction that merged with TS-LKD in 2008, withdrew its partnership in December 2011. In addition to growing divides within the ruling coalition, recent opinion polls reflect a steep drop in support for the prime minister and his base of like-minded political parties. A survey from June notes that only 8.4% of respondents support the TS-LKD, which is far lower than its percentage of the vote in 2008. It is worth noting, however, that the figure is slightly higher than the 7.6% of support that it received in May. The remaining members of the current ruling coalition are polling lower than the 5% necessary to gain entry to the Seimas.
Support for Prime Minister Kubilius is worrisome as well. In June, only 4.2% of survey respondents supported the head of government, which is actually a slight improvement over his 2.8% popularity rating during the previous month.
As the center-right coalition falters, center-left and moderate parties have increased their level of support and appear poised to retake control of the government after the election in October. In the same poll from June, the centrist Labor Party and the center-left Social Democratic Party received 17.1% and 13.7% of support, respectively. The figures represent a slight drop in popularity from the 19.3% and 15.0% that they garnered in May. The Order and Justice Party seems to be filling the void on the center-right end of the political spectrum as the TS-LKD stumbles. In June, 10.7% of respondents favored the Order and Justice Party, which is an improvement from 8.6% in May.
While Lithuania’s political parties struggle to establish a broad base of support, President Dalia Grybauskaite has retained the trust of the majority of Lithuanians. In the same June poll, 55.3% of those surveyed trusted the president, which is slightly lower than 60.8% in May. It is worth noting that President Grybauskaite is politically independent, but her support mainly stems from center-right party members.
In an effort to regain popularity before the election, the center-right coalition recently raised the monthly minimum wage from 800 litas ($295) to 550 litas ($300). Trade unions, opposition parties and President Grybauskaite were advocating for a larger increase, but the government warned that too large of an increase could hurt small businesses. In addition, the center-right coalition said that Lithuania should exercise caution considering broader economic trouble in Europe. The increase will have an immediate impact on the 20% of Lithuania’s population that currently earns a minimum wage salary.
Although there are disagreements regarding the scale of certain initiatives, there is broad consensus on policy direction. For instance, all major political parties in Lithuania support an open economy and a pro-Western foreign policy and a change in government following the election in October will not change the country’s overall political orientation.
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