LITHUANIA'S NEW GOVERNMENT TAKES OFFICE WITH BROAD

C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 001523

SIPDIS

STATE FOR EUR/NB

E.O. 12958: DECL: 12/15/2014
TAGS: PGOV PREL LH
SUBJECT: LITHUANIA'S NEW GOVERNMENT TAKES OFFICE WITH BROAD
GUIDELINES BUT FEW SPECIFICS

REF: A. VILNIUS 1505


B. VILNIUS 1496

C. VILNIUS 1455

Classified By: Pol/Econ Officer Christian Yarnell
for Reasons 1.4 (b) and (d)


1. (C) SUMMARY: The 13th Government of Lithuania took power
on December 14, when Parliament approved the Cabinet and
program of Prime Minister Algirdas Brazauskas. Negotiations
over two Ministerial posts proved difficult, with the
President forcing substitute nominees and ultimately
accepting as Interior Minister a controversial figure with
alleged ties to a well-known criminal. The Government's
program, while lacking many specifics, calls for construction
of a new nuclear power plant and for a heavy social/economic
agenda highlighting greater redistribution of wealth. The
program also calls for continuity in foreign and security
policy, emphasizing the importance of the transatlantic
relationship and Lithuania's role as a regional leader in
promoting democracy. With eight new ministers taking office,
the broad policy goals of the new government remain unclear.
We will immediately engage with members of the new government
to encourage continued pursuit of political, economic, and
trade objectives favorable to U.S. interests and foreign
policy goals. END SUMMARY.


2. (U) The Lithuanian Parliament approved the Cabinet and
program of Prime Minister Algirdas Brazauskas on December 14
by a vote of 68 to 44, with three abstentions. Brazauskas
and his 13 Cabinet Ministers officially took office after a
swearing-in ceremony the same day. Lithuania's 13th
government is the broadest coalition government in the
country's post-Soviet history, and comprises the following
four parties: Social Democratic Party (led by Brazauskas),
New Union (led by Parliamentary Speaker Arturas Paulauskas),
Labor Party (led by business magnate Viktor Uspaskich),and
Peasant Party (led by former PM Kazimiera Prunskiene). The
Conservatives (led by MP Andrius Kubilius),the Liberal
Center Union (currently led by Vilnius mayor Arturas Zuokas),
and the Liberal Democratic Party (led by impeached former
President Rolandas Paksas) all officially declared themselves
to be in opposition.

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The Cabinet
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3. (SBU) The December 14 vote marked the end to difficult
negotiations over the composition of the Cabinet, with
President Adamkus forcing two successive substitutions for
the Minister of Science and Education nomination and one
substitution for the Minister of Interior slot. Adamkus
challenged but ultimately accepted the final candidate for
MOI, Gintaras Furmanavicius. Lithuania's investigative
services cleared Furmanavicius, but he remains a
controversial figure because of allegations of previous
business association with an accused embezzler (ref B),and
Adamkus cautioned that he will ask Furmanavicius to resign
should evidence of wrongdoing come to light. Juozas
Antanavicius, the first replacement for Education Minister,
withdrew his candidacy when information emerged revealing
past collaboration with the KGB. Remigijus Motuzas, who
subsequently assumed the job of Minister of Education, has a
solid track record in government service and is known for his
loyalty to Brazauskas.


4. (U) The final Cabinet line-up is as follows:

-- Prime Minister: Algirdas Brazauskas (Social Democrat)

-- Agriculture: Kazimiera Prunskiene (Peasant Party)
-- Culture: Vladimiras Prudnikovas (Labor)
-- Defense: Gediminas Kirkilas (Social Democrat)
-- Economy: Viktor Uspaskich (Labor)
-- Education: Remigijus Motuzas (Social Democrat)
-- Environment: Arunas Kundrotas (Social Democrat)
-- Finance: Algirdas Butkevicius (Social Democrat)
-- Foreign Affairs: Antanas Valionis (New Union)
-- Health: Zilvinas Padaiga (Labor)
-- Interior: Gintaras Jonas Furmanavicius (Labor)
-- Justice: Gintautas Buzinskas (Labor)
-- Labor: Vilija Blinkeviciute (New Union)
-- Transportation: Zigmantas Balcytis (Social Democrat)

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The Program
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Social Agenda


5. (SBU) The Parliament-approved program outlined the broad
goals of the new government, while shedding some of the more
unrealistic campaign promises made by coalition partners.
Brazauskas's program aims for "a socially-oriented market
economy," promising a greater redistribution of wealth, lower
unemployment, and a significant increase in the average and
minimum wage by 2006. Increased subsidies to farmers,
government intervention to control market prices, and pension
reform, all election campaign proposals of various coalition
parties, are conspicuously absent from the Brazauskas
program. The program does, however, pledge to pursue the
construction of a new nuclear reactor to replace the
Soviet-era facility in Ignalina (ref A). Brazauskas has
given a green light, and Prunskiene, the primary champion of
the NPP construction initiative, already announced her
support for French-controlled Framatome ANP, which is
currently conducting a feasibility study for a new facility.

Foreign Policy Continuity


6. (U) The government program pledged continuity in its
foreign and national security policy, emphasizing a need to
bolster trans-Atlantic ties and to maintain good relations
with neighboring countries. FM Valionis stressed that
Lithuania would seek to become a "regional leader," promising
to raise the profile of economic and social development in
Kaliningrad. He also noted that a "new field of activity"
has emerged in Ukraine, and that Lithuania will champion its
eastern neighbor's bid for EU membership. Defense Minister
Kirkilas, formerly chair of the Seimas foreign affairs
committee, underscored that the government program obliged
Lithuania to "continue successful work with NATO Alliance
partners in the hot spots of the world."


7. (U) Opposition figures hailed the government's foreign and
security policy as the best element of the program. Some MPs
voiced concern, however, that the program did not go far
enough in supporting democracy in Russia and Belarus. Vaclav
Stankevic, influential member of the Foreign Affairs
Committee, bluntly stated, "Our duty is to help Belarus'
opposition create democracy." The opposition disparaged the
social program as nothing more than a "collection of slogans
and generalities," with the Liberal Center voicing its
concern that the government's agenda will lead to a
substantial increase in taxation, and criticized the
government for failing to specify a target date for the
introduction of the euro. (NOTE: The Chairman of the
Lithuanian Central Bank has said that Lithuania is on track
to join the euro zone in 2007.)

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Comment: Cabinet a Mixed Bag
--------------


8. (C) Holdover FM Valionis is a true Atlanticist with a
commitment to the major policy goals of the United States.
Yet while Valionis will strive to ensure continuity in
Lithuania's foreign policy, the broader policy goals of
Lithuania's 13th government remain to be seen. One prominent
wild card is Uspaskich and his ideologically ambiguous Labor
Party, which controls the most votes in Parliament despite
its junior status within the Government. We are beginning to
build a relationship with Uspaskich to promote implementation
of economic policies favorable to U.S. investment and
commerce. We will cultivate the interest he has shown in
foreign investment, while working to ensure a level playing
field for American businesses.


9. (C) Ag Minister Prunskiene, who has consistently called
for Lithuania to follow more "European" policies, is also of
concern. Although charged with agricultural affairs,
Prunskiene is a political heavyweight capable of influencing
policy in other spheres, including Lithuania's bid to retain
a nuclear-energy production capacity and to construct a new
plant.


10. (C) Since independence, the shelf life of Lithuanian
governments has been relatively brief. We have therefore
been in the position of dealing with an unfamiliar cast
before. Because of the congruence of Lithuanian and American
interests, our bilateral relationship has flourished anyway.
We intend to emulate our past successes, introducing
ourselves to the eight Ministers new to their roles and
enlisting them in our effort to promote policies favorable to
U.S. foreign policy goals.
Mull