Lithuania centre-right eyes win, coalition building

VILNIUS (Reuters) – Lithuania’s main center-right opposition party, heading for victory in the second round of elections Sunday, is set to woo smaller liberal groups and a new party run by a TV star as its coalition partners.

The expected victory of the Homeland Union against the backdrop of the global economic crisis will put an end to the long-time rule of the center-left Social Democrats, who came third in the October 12 first round of the election.

“We expect to come first after the second round and that will give us an opportunity to form the new government, this time without the Social Democrats,” Andrius Kubilius, head of the Homeland Union-Lithuania Christian Democrats, told Reuters.

The second round will decide 68 seats in run-offs for single mandate constituencies and analysts have said Homeland Union is likely to win about 40 seats in total in the 141-seat parliament after getting 18 seats in the first round vote for party lists.

This means Kubilius faces coalition talks to include his natural allies, the opposition Liberal Movement and the Liberal and Center Union, which is in the outgoing coalition. He also hopes to woo surprise second-placed party National Resurrection, led by TV talent show host Arunas Valinskas.

Kubilius said he has had preliminary talks with Valinskas’ party and they were keen to support a center-right cabinet.

Whoever forms the next government will have to deal with the impact of the global financial crisis, double-digit inflation and keeping a tight rein on the budget deficit as the country eyes eventual adoption of the euro.

The Social Democratic Party came to power in mid-2001 after a center-right coalition split over internal disagreements.

The conservatives’ return could see Soviet-era independence leader Vytautas Landsbergis, 76, a strong critic of Russia, in the foreign minister’s post. Now a member of the European Parliament, he is one of several candidates for the job.

The theme of a newly assertive Russia was exploited most by Kubilius after Russia’s conflict with Georgia.

“Lithuania is interested in good relations with Russia, but that depends on Russia, first of all,” Kubilius said.

On economic policy, Kubilius backs income tax cuts, at the same time closing other tax loopholes. He also favors the eventual adoption of the euro.

Kubilius said he would let the budget deficit rise to allowing state spending to ease the economic downturn, would stay within the European Union deficit limit of 3 percent of gross domestic product.

The more radical wing of his party backs a total ban on abortions, which could cause tensions in any coalition.

If Kubilius fails, the Social Democrats could try again. They won 12 seats in the first round but hope for a total of 25, analyst said. One of their allies is a Russian-born millionaire, nicknamed the “Gherkin King” after one of his businesses.

National Resurrection won 13 seats in the first round while the party of former President Rolandas Paksas, who in 2004 became Europe’s only leader to be impeached, came fourth. He has said he is prepared to remain in opposition.

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