Viewing cable 05VILNIUS771

05VILNIUS7712005-07-25 12:31:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000771 
E.O. 12958: DECL: 07/24/2014 
     ¶B. VILNIUS 769 
     ¶C. VILNIUS 636 
     ¶D. 04 VILNIUS 1352 
Classified By: Pol/Econ Officer Gregory L. Bernsteen 
for Reasons 1.4 (b) and (d) 
¶1. (C) Lithuania's uneasy ruling coalition continues to 
function amid signs that some of the constituent parties are 
already beginning to look to the next election cycle.  The 
dual triggers of Labor Party Chairman Viktor Uspaskich's 
forced resignation as Economy Minister and upcoming municipal 
elections in late 2006 have encouraged the Labor Party 
especially to reevaluate the status quo.  Our sources agree 
that the coalition will remain intact for now.  However, many 
believe that the Labor party will pull out of the coalition 
and go into opposition prior to the elections next year in 
order to blame other coalition members for Labor's failure to 
deliver on its campaign promises.  If Labor pulls out, there 
are few options for alternative coalition formations, and 
none would be as stable as the current group.  We do not 
expect any substantive changes in Lithuania's foreign policy, 
regardless of whether the ruling coalition's composition 
changes.  END SUMMARY. 
¶2. (C) The Labor Party's two most senior representatives 
after leader Viktor Uspaskich, Loreta Grauziniene and 
Viktoras Muntianas, have recently given remarks to the press 
on the future of the ruling coalition.  Grauziniene has 
recommended that Labor discuss pulling out of the four-party 
coalition government, of which they are the biggest faction, 
and go into opposition.  Grauziniene's complaints center on 
an alleged lack of respect for Labor from its partners.  She 
claims that the PM's Social Democrats are attempting to 
exclude Labor from exercising influence over the coalition 
agenda despite Labor having twice as many MPs.  Muntianas 
displayed a more conservative position, taking a "wait and 
see" attitude.  Uspaskich, returning from vacation on July 
23, denied that the party was considering leaving the 
coalition, but Grauziniene said the party leadership would 
still discuss the possibility at their next meeting on July 
¶3. (C) Lauras Bielinis, a political analyst at the Institute 
of International Relations and Political Science, told us 
that Grauziniene's threats are most likely an attempt to 
enforce coalition discipline and gain ground for Labor. 
Bielinis theorizes that it is a similar strategy to Prime 
Minister Brazauskas's recent threat to resign if the Seimas 
did not pass the coalition's tax reform package (ref B). 
Bielinis also said that if Labor were to pull out of the 
coalition this early, some of its members would likely join 
other parties in order to "be in the government."  Juozas 
Olekas, senior member of the Social Democrats in Parliament, 
told us that he believes the Labor Party is just "making 
threats" and that the comments "cannot be taken seriously 
since Uspaskich has not been in Lithuania." 
¶4. (C) Labor's image has suffered lately, with its leader 
resigning from his position as Minister of Economy after a 
Seimas commission found that he had violated rules 
prohibiting conflicts of interest (ref C).  Social Democrat 
MP Algirdas Paleckis hinted to us on July 20 that, tiring of 
the turmoil in Labor's councils, Muntianas and two to three 
other Labor members in Seimas would likely switch to the 
Social Democrats in the near future.  Paleckis commented that 
"(Muntianas) is a smart guy," and that "smart people will 
leave Labor."  Although Muntianas is one of Labor's most 
prominent members, the press has reported that he is not 
satisfied with his status inside the party nor with Labor's 
accomplishments so far.  Muntianas has made several comments 
that conflict with the Labor party line during the past 
several months. 
¶5. (C) Paleckis also discussed a possible scenario in the 
event that Uspaskich is forced to give up his chairmanship of 
the Labor Party.  He believes that there could be a merger 
between the Social Liberals (the party of Arturas Palauskas, 
Seimas Speaker and former interim President after Rolandas 
Paksas' impeachment) and the Labor Party.  Palauskas is a 
statesman who commands a small party.  He began his political 
career as a populist, but generally is considered a 
dispassionate moderate nowadays. 
¶6. (C) Bielinis mentioned a second option should Labor's 
party discipline weaken.  He suggested that the more 
business-oriented and less populist members of Labor could 
join with former members of the smaller opposition Liberal 
and Center Union to form a new faction in Parliament. 
¶7. (C) Several contacts, including both Paleckis and 
Bielinis, are convinced that Labor will pull out of the 
coalition sometime next year prior to the municipal elections 
in late 2006.  Labor would benefit, they suggest, by being 
able to shift the blame for the stalemate in Parliament to 
its coalition partners.  All municipal elections occur across 
Lithuania simultaneously, meaning that Labor could hope for 
another sweep similar to its decisive win in the last 
Parliamentary election. 
¶8. (C) The three other members of the ruling coalition, 
Social Democrats, Social Liberals, and the Peasant's Party, 
do not have much room to maneuver if forced to form a new 
coalition.  Without Labor's MPs, the group would be 
hard-pressed to cobble together a majority.  The only real 
option would be a "Rainbow Coalition" including the 
center-left Social Democrats, Social Liberals and Peasant's 
Party along with the center-right Conservatives and 
Liberal-Center Union.  However, the parties would surely find 
it hard to agree on common goals and power sharing, just as 
they did during the formation of the current government (ref 
D).  Impeached President Paksas' Liberal Democrats tend to be 
shunned by all sides, and are unlikely to participate in any 
coalition unless Labor needs them to fill in the gap if one 
of the smaller parties were to pull out. 
¶9. (C) The coalition will likely remain intact in the near 
term.  The Labor party is interested in extending its 
influence and its current threats are likely meant to support 
that goal.  Labor has twice as many MPs as the Social 
Democrats, but has had much less input on the legislative 
agenda.  As Labor gains more experience in government, it can 
be expected to assert its authority more frequently.  Looking 
ahead, Uspaskich and his fellow party members will have to 
decide whether the freedom they would enjoy in opposition 
merits relinquishing the perquisites of power.