CONSERVATIVES WIN SECOND ROUND; CENTER-RIGHT

C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000912 SIPDIS E.O. 12958: DECL: 10/26/2018 TAGS: PGOV PREL LH SUBJECT: CONSERVATIVES WIN SECOND ROUND; CENTER-RIGHT COALITION LIKELY REF: VILNIUS 855 AND PREVIOUS Classified By: Charge d'affaires a.i. Damian Leader for reasons 1.4 (b) and (d). ¶1. (C) Summary: With preliminary results in, the Conservative Party appears to have won a significant plurality in the new Seimas (parliament) with 44 (of a total 171) seats. The Conservatives are moving quickly with probable coalition partners National Revival, Liberal Movement, and Liberal and Center Union in announcing their intention to form a government. Should they be successful, we expect this coalition to take steps to address the impact of the global financial crisis. We also expect the new government to be as pro-American and pro-NATO as its predecessor. End summary. Conservatives Well-Placed to Lead Coalition -------------- ¶2. (U) Building on their October 12 first-round success, Lithuania's Conservatives rolled to further victory in the October 26 second-round Seimas elections, winning 26 of the 44 single-mandate runoffs in which they competed. Combined with the 18 seats they earned via party list (note: revised upward from reftel),their 44 seats place them well to lead coalition talks. ¶3. (U) Four runoff races currently face a recount because the candidates were separated by less than 50 votes. The recount can only benefit the Conservatives, as initial results in all four races show their candidates losing. ¶4. (U) Pending final results, the distribution of seats in the new Seimas looks as follows: Conservatives 44 Social Democrats 26 National Revival 16 Order and Justice 15 Liberal Movement 11 Labor 10 Liberal and Center Union 8 Polish Electoral Action 3 Peasant Nationalists 3 Social Liberals 1 Independent 4 ¶5. (U) The Conservatives, National Revival, Liberal Movement, and Liberal and Center Union announced their intention to form a coalition, signing a cooperation agreement October 27. Their 79-seat majority could easily increase based on recounts or by having independents or others (like the sole Social Liberal member) join. Timeline to a New Government -------------- ¶6. (U) Once election results are final, the new Seimas must be convened by the President within 15 days. The latest this could happen would be November 18. Then, the President officially proposes the candidacy of a Prime Minister, to be approved by the Seimas within 15 days (not later than December 4). Once the Prime Minister is approved, s/he has 15 days to present her/his program and proposed Cabinet to the Seimas (nlt December 19),which then has no more than 15 days to consider and approve them (nlt early January). Although the mechanism for forming a government was not necessarily designed for speed, the potential coalition has already indicated it hopes to move through the process quickly. One reason to do so would be to allow the new Seimas to consider the 2009 budget, which must be completed prior to the end of the year. Positions -------------- ¶7. (U) Much horsetrading remains to be done before a coalition is formed, but the parties are already staking claims to posts. Conservative Party leader Andrius Kubilius has already announced that his party would seek the top slots at the Economy, Finance, Defense, and Foreign Ministries. Revival Party leader Arunas Valinskas has said he expects his party to get both Interior and Justice Ministries, as well as the Seimas Speaker's post (not necessarily for himself). Regarding the choice for a Prime Minister, President Adamkus has already been quoted saying that according to "prevailing world practice," the government would be formed by the party which won the most seats. What Policies Should We Expect? VILNIUS 00000912 002 OF 002 -------------- ¶8. (C) The National Revival Party, newly established, has little track record to judge by, but ran on a platform of responsible government. The Conservatives and both Liberal parties have generally pro-business stances, and, should the coalition successfully form, we expect this to be reflected in its policies. At a four-party press conference held October 27, Kubilius made it clear that the coalition's first concern would be taking steps to address the impact of the global financial crisis, in part by tackling budget deficits and slowing GDP growth. ¶9. (C) Members of this four-party coalition have a history of close relations with the United States, and strongly support NATO. We expect this trend to continue. At the October 27 press conference, they pledged to work to battle corruption, and to improve Lithuania's energy policies. The latter will include a close look at the formation of LEO LT and its structure, "to make sure it properly represents the country and society." LEADER