LABOR PARTY WINS ROUND ONE OF LITHUANIAN

C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 001261

SIPDIS

STATE FOR EUR/NB

E.O. 12958: DECL: 10/11/2014
TAGS: PGOV PREL LH
SUBJECT: LABOR PARTY WINS ROUND ONE OF LITHUANIAN
ELECTIONS, BUT GOVERNMENT STILL UP FOR GRABS

REF: VILNIUS 1221

Classified By: Pol/Econ Chief Nancy Cohen
for Reasons 1.4 (b) and (d)


1. (C) SUMMARY: Lithuania's Labor Party took the greatest
number of votes in the October 10 first round of
parliamentary elections, but failed to win enough seats to
form a government or even ensure their leadership when all
the votes are in. The coalition of ruling parties finished
second, in light voting, with right-wing Conservatives and
the populist Paksas Coalition beating predictions. Run-off
elections for single-mandates October 24 will determine the
final configuration of Lithuania's Parliament (Seimas). The
Brazauskas-Paulauskas Coalition is set to best Labor in the
second round. With a majority of seats for any party all but
numerically impossible, leaders and losers are jockeying for
place in a governing coalition. The most likely scenario
would have current Prime Minister Brazauskas head a
Government of Social Democrats, Labor, and Liberal Center.
For the USG, such a combination bodes well. END SUMMARY.

Labor Wins Round One
--------------

2. (U) Tycoon-turned-politician Victor Uspaskich led his
young Labor Party to a first-round victory taking nearly 29
percent of the vote in the October 10 first round of
parliamentary elections. As a result, Labor will seat at
least 22 of the candidates from its party list in the
141-member Seimas. The coalition of ruling Social Democrats
and New Union parties finished second at about 21 percent,
and Conservatives, performing better than expected, bested
the Liberal and Center Union for third. The Coalition led by
impeached former President Rolandas Paksas outperformed
expectations, even though the courts have barred him from
holding office. Leftist ex-Premier Kazimiera Prunskiene
fared poorly. The results were as follow:

Labor Party 28.60% 22 seats
Coalition of Algirdas Brazauskas
and Arturas Paulauskas 20.66 16
Homeland Union (Conservatives) 14.58 11
Coalition of Rolandas Paksas 11.42 9
Liberal and Center Union 9.13 7
Union of Farmers Party and
New Democrats (Kazimiera Prunskiene) 7.22 5

Other parties failed to pass the threshold of votes necessary
to win parliamentary seats in the multiple-mandate contest.


3. (U) The first round of voting determined the allocation of
70 multiple mandates. In addition, five candidates,
including Victor Uspaskich, won majorities in single-mandate
races, throwing three more seats the way of the
Brazauskas-Paulauskas Coalition (BPK),one to Labor, and one
to the otherwise unseated Polish Electoral Action.

Round Two Up for Grabs
--------------

4. (U) A second round of voting October 24 will decide the
assignment of the remaining 66 seats. Labor, having placed
first or second, will run in 44 of the 66 districts whose
seats are at stake, but Conservatives, BPK, and Liberal
Center candidates have reasonable or better chances to win in
many. With the runoffs limited to two candidates, it is at
this point uncertain to whom the also-rans will give their
support, and how the numbers will add up in the end.
(Analysis and projections to follow septel.) Voter turnout
will play significantly in the final outcome. Only 46
percent of registered voters cast ballots in the first round.
Even fewer voters will likely head to the voting booth on
October 24, as it marks the fourth election in Lithuania this
year.

Coalition Building Ahead
--------------

5. (U) At the end of this process, neither Labor nor BPK are
likely to end up with a majority. Under such a scenario,
Lithuania's Prime Minister will have to form a coalition
government. Party leaders will wait until after the second
round before counting their seats and publicly identifying
coalition partners, but they are already laying down some of
the rules and ruling out some possibilities. Uspaskich
already announced that he will not form a coalition with the
Paksas Coalition.


6. (C) A senior advisor to the PM told the Ambassador today
that Brazauskas favors a coalition with Labor, but only on
the condition that he retains his current position as PM.
Under such a scenario, Labor would take over the leadership
of the government in two years. There has been talk,
especially in the Presidency, of a Rainbow Coalition of all
parties excluding Labor and the Paksas Coalition. The
Conservatives, whose numbers would be necessary to form the
coalition, would have few natural allies in such a
Government. It would therefore probably prove short-lived.


Comment
--------------

7. (C) The next Government of Lithuania will probably include
some of the same old faces, including at the top. Uspaskich
is trying to establish himself as non-threatening --
increasingly describing himself as a Centrist and, following
the elections, saying that the voters chose for
Western-leaning leadership. If he completes the make-over in
time, Brazauskas will likely ask him to dance, and the
unlikely pair (unimaginable just six month ago) will lead the
Government as PM and Deputy. For the USG, such a combination
bodes well, promising continuity of policy, a stable economy,
and more assiduous courtship of foreign investors.
Mull