Viewing cable 06VILNIUS562
Title: LITHUANIAN PRESIDENT PROPOSES SOCIAL DEMOCRAT FOR

IdentifierCreatedReleasedClassificationOrigin
06VILNIUS5622006-06-15 13:42:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
VZCZCXRO0400
PP RUEHAG
DE RUEHVL #0562/01 1661342
ZNY CCCCC ZZH
P 151342Z JUN 06
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC PRIORITY 0286
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000562 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/NB, INR/EUC 
 
E.O. 12958: DECL: 06/15/2016 
TAGS: PREL PGOV PINR LH
SUBJECT: LITHUANIAN PRESIDENT PROPOSES SOCIAL DEMOCRAT FOR 
PRIME MINISTER 
 
REF: VILNIUS 526 
 
Classified By: Pol/Econ Officer Randolph Flay for reasons 1.4(b/d) 
 
 
SUMMARY 
------- 
 
¶1. (SBU) President Valdas Adamkus nominated Social Democrat 
and acting Prime Minister Zigmantas Balcytis for the post of 
Prime Minister on June 15.  Parliament needs to vote on the 
nomination before June 22, and may vote as early as June 20. 
The Social Democratic parliamentary bloc has not yet been 
able to form a majority coalition in the 141-member 
parliament.  The Social Democrats' new coalition looks to 
include the right-leaning Liberal Centrist Party, led by 
scandal-tainted Vilnius mayor Arturas Zuokas.  Balcytis, 
Minister of Finance until his elevation to acting PM on June 
1, is a status quo figure who pledges to continue the 
previous government's program.  End summary. 
 
FORMER FINANCE MINISTER BALCYTIS GETS THE NOD 
--------------------------------------------- 
 
¶2. (SBU) The President made an 11th-hour decision to nominate 
Social Democrat and Acting PM Zigmantas Balcytis for the post 
of Prime Minster just before the Constitutional time limit 
ended today.  Adamkus had encouraged the Social Democrats and 
Conservatives to form the nucleus of a governing coalition, 
but those talks broke down on June 6.  Balcytis is a 
mainstream Social Democrat, a professional, and enjoys a good 
reputation among his peers from different parties. 
Nonetheless, his Social Democratic bloc -- which officially 
includes only 43 members of parliament (MPs) at present -- 
faces an uphill struggle in parliament. 
 
¶3. (U) The Conservative bloc (45 MPs) has promised to 
vigorously oppose Balcytis's nomination.  In parliament 
today, the Conservatives went after Balcytis on several 
counts, including his alleged efforts to study at a KGB 
school in 1981, his family's business interest in an asphalt 
company that seeks to obtain contracts associated with EU 
Structural Funds, and conflict-of-interest charges 
surrounding his son's employment at a government office that 
evaluates projects for EU funding.  President Adamkus said 
today that he would demand Balcytis's resignation if 
allegations about his family's inappropriate economic 
activities proved true. 
 
¶4. (C) Conservative MP Rasa Jukneviciene, however, told us 
today that she expects the Social Democrats will gather 
enough support for Balcytis's confirmation.  She also said 
that Social Democrat and acting Defense Minister Gediminas 
Kirkilas offered again (unofficially) for the Conservatives 
to join the coalition.  She emphasized, however, that she 
sees programmatic differences as a major obstacle to forming 
a so-called "rainbow coalition" that would unite Social 
Democrats and Conservatives. 
 
¶5. (SBU) During parliamentary hearings today, Balcytis said 
that the Social Democrats bloc will continue negotiations 
with other parties to form a ruling coalition with majority 
support.  Besides the Liberal and Center Union (8 MPs), 
Social Democrats expect 10-20 Labor Party MPs to join their 
bloc (either by joining the Social Democrats or as 
independent supporters of a minority government).  Local 
media speculates that an indictment against the Labor Party 
and some of its leaders for undeclared campaign contributions 
and other inappropriate behavior may come as early as 
tomorrow.  Adding Liberal Centrist and Labor members could 
bring the Social Democrats close to the 71 MPs needed for a 
majority. 
 
"SUBSCRIBER" COULD SNEAK INTO COALITION 
--------------------------------------- 
 
¶6. (C) The one-time golden boy of Lithuanian politics, 
Vilnius mayor Arturas Zuokas, is still vying for a role in 
the coalition.  A couple of years ago, Zuokas was a rising 
political star.  He had strong support from the President and 
his party was on the rise.  Charges of vote-rigging, 
corruption, and nefarious land deals then led President 
Adamkus to call for his resignation as mayor and split 
Zuokas's party.  In 2005, an ad hoc parliamentary commission 
identified him as the recipient of large amounts of money for 
decisions favorable to the infamous Rubicon group.  Despite 
voice recordings of Zuokas indicating that he received 
kickbacks for city contracts under the codename "subscriber," 
he has evaded prosecutors and has not been convicted of any 
wrongdoing.  What remains of his party controls eight 
 
VILNIUS 00000562  002 OF 002 
 
 
parliamentary seats. 
 
WHAT TO EXPECT NEXT WEEK 
------------------------ 
 
¶7. (SBU) The parliament must vote on Balcytis's nomination on 
or before June 22, and may vote as early as June 20.  With 
parliament's approval, the President will charge the Prime 
Minister to form the government.  The PM-designate then has 
15 days to present the Seimas a list of ministers, 
pre-approved by the President, and the government's program. 
If the parliament does not vote on the draft program within 
30 days or if it rejects the draft program twice within 60 
days, the President has the right to announce pre-term 
elections. 
 
COMMENT 
------- 
 
¶8. (C) It will be difficult for either Balcytis or 
Conservative leader Andrius Kubilius to cobble together a 
majority, but President Adamkus's decision suggests that he 
thinks Balcytis has the best shot.  Balcytis's credentials as 
former Finance Minister, support from the President, and his 
centrist, technocratic reputation make him more acceptable to 
many MPs than Kubilius, whom many see as too uncompromising 
to hold together a necessarily diverse governing coalition. 
Regardless of what the current political turmoil produces, 
however, we expect Lithuania to remain a staunch U.S. ally. 
MULL