Viewing cable 07VILNIUS878

07VILNIUS8782007-12-10 15:19:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
DE RUEHVL #0878/01 3441519
R 101519Z DEC 07
C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000878 
E.O. 12958: DECL: 10/17/2017 
Classified By: Ambassador John A. Cloud for reasons 1.4 (b) and (d). 
¶1. (C) Summary. The opposition Conservative party has begun 
calling for early elections in Lithuania.  The Social 
Democrats, who lead the minority governing coalition and who 
also used to have the support of the Conservatives, have been 
hurt by increasing inflation and allegations of poor planning 
for a new nuclear power plant.  Whether elections occur soon, 
which is unlikely, or as regularly scheduled in October 2008, 
the prospects of the Conservatives look good as do the 
prospects of the populist parties.  End summary. 
Conservatives call for early elections 
¶2. (U) On December 5, Conservative Party Chairman Andrius 
Kubilius sent a letter to President Valdas Adamkus asking him 
to call for early parliamentary elections in February or 
March.  Early elections would require either a no-confidence 
vote by the Seimas (Parliament) with presidential approval or 
a 3/5 majority vote in the Seimas, which would not need 
presidential approval.  Adamkus had dismissed earlier 
suggestions by MPs for early elections as "empty talk."  He 
added, "if the Seimas wants to dismiss itself, it has an 
opportunity to convene in a meeting, say 'thank you,' sing 
the national anthem, and hold elections.  If they have the 
willingness, they are free to do this." 
How the minority coalition held until now: 
Conservative support 
¶3. (C) Prime Minister Kirkilas has led a minority coalition 
of left and center parties since July 2006.  The coalition 
has been propped up by a formal support arrangement with the 
Conservatives.  That support, however, has been slowly fading 
with the approach of elections scheduled for October 2008. 
Even when the Government had Conservative support, overall 
the Seimas and the Government have been ineffective in 
advancing new legislation or making even mildly controversial 
decisions.  For example, inflation and corruption remain 
unaddressed; teachers and doctors are poorly paid. 
¶4. (C) Kubilius told the Ambassador recently that he warned 
the PM upon taking office that a "public relations 
Government" could last a maximum of 18 months.  With added 
stress and increasing ineffectiveness as the Government 
enters its seventeenth month, the Conservative leader's 
comment seems prescient, although a bit of a self-fulfilling 
Hard times for the Social Democrats 
¶5. (U) The stress on the Government has come from increasing 
inflation (prices for food products were up 15.8 percent in 
October, year-on-year, and for housing and utilities 12.4 
percent), the general ineffectiveness of the Government, and 
the tumult surrounding the GOL's plans for a new nuclear 
power plant.  With regard to the latter, the Government has 
been negotiating to re-integrate its privatized western 
electricity grid, with the still-nationalized eastern grid 
and national supplier into a "national investor" to develop 
the nuclear plant (reftel).  The process will clearly result 
in enormous financial benefit for the owners of the western 
grid.  The fact that this company was chosen in a no-bid 
process to participate, and that the decision to do so has 
been non-transparent, has resulted in enormous public 
criticism of the Kirkilas government.  Reflecting the 
pressure he has been under about the national investor 
project, Kirkilas made a surprise national television 
appearance the evening of December 6.  In it, he argued that 
the national investor project could not be put out for public 
bidding, explaining that EU rules would not allow Lithuania 
to apply any preferences for a winner.  This would mean that 
"any Gazprom-controlled company, registered in the EU" might 
end up in control. 
Early elections:  no real winners 
¶6. (U) The Conservatives are using the weakness of the Social 
Democrats to emphasize their role as leader of the 
opposition.  Several MPs and political commentators have 
remarked that this is merely public posturing by the 
Conservatives.  The Conservatives would likely gain seats in 
Parliament in early elections.  However, they would not gain 
a majority and they have few natural allies in Parliament. 
Even with a strong showing they might be shut out of a ruling 
VILNIUS 00000878  002 OF 002 
¶7.  (C) The populist Labor and Liberal Democrats, led by 
accused fraudster Viktor Uspaskich and impeached former 
President Rolandas Paksas, respectively, are also polling 
well.  Their willingness to appeal to the masses by making 
promises they are unlikely to be able to keep, and the 
unwillingness of the local media effectively to call their 
bluffs -- especially in the short time frame that early 
elections would provide -- mean that they might do well in 
early elections.  The populist parties, however, would 
probably do better if they wait until October.  Uspaskich, 
the real force of the Labor Party, is currently under house 
arrest and therefore can not campaign nationally.  He was 
indicted on fraud charges on December 6.  Paksas and the 
Liberal Democrats are hoping that the European Court of Human 
Rights will soon overrule part of his impeachment punishment, 
which does not allow him to hold office requiring an oath and 
prevents him from becoming an MP as well as serving as prime 
minister or president.  If Paksas wins his case, he could 
easily win an MP seat in October. 
¶8. (C) Despite a lot of talk, early elections are unlikely. 
However, the woes of the Social Democrats will continue. 
This will increase votes for the Conservatives and for the 
populist parties.  Social Democrat MP and former Finance 
Minister Zigmantas Balcytis recently told the Ambassador that 
his party is likely to slip even further in the polls, from 
its current third behind the Conservatives and Paksas's 
Liberal Democrats to fourth.  If so, Uspaskich's Labor Party, 
currently polling fourth, is the likely beneficiary of the 
Social Democrats' decline.  Unless the Government somehow 
regains the public's confidence, there will be a lot of room 
for populist parties in the next elections and a chance, if 
current conditions hold, for a populist-led Government to 
form in October.