Viewing cable 08VILNIUS1038

08VILNIUS10382008-12-10 11:53:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
DE RUEHVL #1038/01 3451153
P 101153Z DEC 08
C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 001038 
E.O. 12958: DECL: 12/09/2018 
REF: 07 VILNIUS 202 
Classified By: Ambassador John Cloud for reasons 1.4(b) and (d) 
¶1. (U) Summary: Lithuania's new prime minister, Andrius 
Kubilius, and center-right coalition Cabinet took oaths of 
office on December 9 and won approval for their program, 
which focuses largely on minimizing the effect on Lithuania 
of the world economic crisis.  The program also emphasizes 
deeper ties with the EU and United States and stable 
relations with Russia. End summary. 
¶2. (U) Lithuania's fifteenth government since regaining 
independence was sworn in December 9.  The four-party, 
center-right coalition led by the Conservatives replaced a 
Social Democrat-led coalition in power since July 2006.  The 
Seimas (parliament) also approved the government's program. 
¶3. (U) New Prime Minister Andrius Kubilius, 52, is leader of 
the Homeland Union-Lithuanian Christian Democrats, commonly 
known as the Conservatives.  Kubilius had a leadership role 
in Lithuania's liberation movement and has been in the Seimas 
since 1992.  After serving as prime minister in 1999-2000, he 
was credited with reorienting Lithuania's economy toward the 
West and having mitigated some of the harshest consequences 
of the Russian financial crisis of that time. 
¶4. (U) In addition to the Conservatives, the governing 
coalition includes the Liberal Movement and Liberal and 
Center Union, two pro-business parties that split from each 
other due to a leadership dispute in 2006.  The Liberal and 
Center Union was also part of the previous governing 
coalition.  The fourth coalition partner, the National 
Revival Party, was formed in 2008.  It filled its ranks with 
show-business and TV-journalism celebrities, including new 
Seimas speaker Arunas Valinskas.  The party ran on a platform 
of responsible government and taking votes away from 
Lithuania's populist parties, but has not elaborated its 
policies further. 
¶5. (U) In presenting its program, the new government listed 
its strategic priorities:  navigating the global economic 
crisis without grievous harm to state finances; implementing 
reforms in energy policy, government structure, health care, 
education, business innovation, and the fights against 
corruption and socioeconomic inequalities; and providing 
responsible leadership based on openness and public dialogue. 
¶6. (U) The new government pledged to move forward quickly 
with its "anti-crisis plan," which aims to restore and 
preserve fiscal health in a time of global recession.  Key 
elements of the plan include cutting the personal income tax 
rate by 4 percent while raising the VAT rate by 1 percent, 
abolishing most VAT exemptions, increasing excise duties on 
fuel and alcohol, increasing taxes on dividends by a third to 
20 percent, and reducing government expenditures by an 
average of 15 percent.  The government also plans to increase 
access to credit for businesses, encourage banks to lend to 
start-up businesses, reduce social payments and government 
salaries, slash spending for road construction and 
maintenance, and shelve long-term construction projects in 
favor of shorter-term construction and renovation of housing 
units.  The new government says savings and revenue increases 
from these actions will total USD 2 billion. 
¶7. (U) The government's action plan also calls for 
strengthened solidarity within the EU and stronger EU-U.S. 
relations.  Lithuania will strive for good relations with 
Russia, paying particular attention to the Kaliningrad 
enclave that borders Lithuania, and will continue to support 
Euro-Atlantic integration for countries such as Ukraine, 
Moldova and Georgia. 
¶8. (U) The new GOL also will seek an effective EU energy 
strategy that will not leave Lithuania dependent on Russia 
for its energy needs.  Kubilius also plans to split the 
Ministry of Economy into a Ministry of Energy and a Ministry 
of Innovation, Business and Labor.  The candidate for Energy 
Minister has been identified, but cannot be proposed until 
the Seimas approves the split. 
¶9. (C) Here are brief biographies of the Cabinet members, 
only six of whom are members of the Seimas.  More detailed 
biographies will be sent via e-mail to INR/B: 
-- Minister of Health Algis Caplikas (AL-giss CHAP-lih-kuss), 
46, has previously served as Minister of Construction and 
Urban Development and Minister of Environment.  He is a 
construction engineer by trade but has been an elected 
official, both in the Seimas and the Vilnius City Council, 
since 1995. 
VILNIUS 00001038  002 OF 002 
-- Minister of Social Security and Labor Rimantas Dagys 
(ree-MAN-tuss da-GEES), 51, is a biochemist by training, but 
has spent 12 of the last 16 years in the Seimas, where he is 
a member of the American Caucus. 
-- Minister of Defense Rasa Jukneviciene (RAH-sah 
yook-NEV-i-cheh-neh), 50, is Lithuania's first female defense 
minister, and the sole female member of this Cabinet.  She 
has long been an ardent supporter of the United States, NATO 
and the EU, and is openly critical of Russia.  She is deputy 
chairwoman of the Conservative party.  Post worked closely 
with Jukneviciene following last year's State Security (VSD) 
crisis (reftel) to expose her to the American system of 
intelligence oversight. 
-- Minister of Environment Gediminas Kazlauskas 
(GEH-dih-mee-nas kaz-LOW-skas), 49, has worked in 
construction management, most recently as CEO of a 
construction company.  He was nominated for his post by the 
National Revival Party, to which his company had made the 
maximum legal campaign contribution. He is not a member of 
the Seimas. 
-- Minister of Economy Dainius Kreivys (DAY-nee-yuss 
kray-VEES), 38, is a businessman who has written on market 
behavior and macroeconomics.  He is not a Seimas member. 
Most recently he was CEO of a furniture company and a board 
member of several other firms. 
-- Minister of Transportation Elgijus Masiulis (EL-gee-yuss 
mah-SOO-lis), 34, became leader of the Liberal Movement in 
early 2008.  He has been a Seimas member since 2000 and is in 
the American Caucus.  He has a master's degree in political 
science, and has held no jobs outside of politics. 
-- Minister of Interior Raimundas Palaitis (ray-MOON-duss 
pah-LAY-tis), 51,  was in the Seimas, where he served as 
deputy chairman of the budget committee, for eight years 
before losing a re-election bid in 2008.  He was nominated 
for his post by the Liberal and Center Union.  He has worked 
as a computer programmer and securities trader. 
-- Minister of Finance Algirdas Semeta (AL-gir-duss 
she-MEH-tah), 46, was previously Finance Minister (1997-99). 
He also has been deputy head of the government's 
privatization office, head of the Securities and Exchange 
Commission, director general of the government's statistics 
agency and the Government Secretary, responsible for 
coordinating the civil service.  He is not a Seimas member. 
-- Minister of Justice Remigijus Simasius (reh-MIG-ee-yuss 
shi-MAH-shyuss), 34, was until recently the president of the 
Lithuanian Free Market Institute, a leading think tank.  He 
studied at the Ludwig von Mises Institute in Alabama, and has 
been an intern at the Heritage Foundation in Washington and a 
board member of Transparency International's Lithuania 
chapter.  He is an expert on competition economics and NGO 
law and has worked on privatization, education reform and 
public procurement.  He is not a Seimas member. 
-- Minister of Agriculture Kazys Starkevicius (kah-ZEES 
star-KEH-vih-chuss), 52, is a lawyer and former deputy mayor 
and city administrator of Kaunas, Lithuania's second city. 
He was a founder of the Farmers Union of Lithuania and helped 
lead the Lithuanian Family Farmers Union.  His wife is a 
farmer.  He has been a Seimas member since 2004. 
-- Minister of Education and Science Gintaras Steponavicius 
(GIN-tah-russ steh-poh-NAV-ih-chuss), 41, is a lawyer who has 
been involved with liberal-party politics since his student 
days.  He has been in the Seimas since 2000, and is a strong 
supporter of the EU and United States, as well as of 
human-rights issues. 
-- Minister of Foreign Affairs Vygaudas Usackas (VEE-goh-duss 
oo-SHATS-kuss), 43, served as Lithuania's ambassador to the 
United States from 2001 until 2006, after which he became 
ambassador to the United Kingdom.  At the Foreign Ministry he 
has been a NATO liaison in Brussels, Lithuania's chief 
negotiator on EU accession, and deputy foreign minister.  He 
is not a member of the Seimas. 
-- Minister of Culture Remigijus Vilkaitis (reh-MIH-gee-yuss 
vil-KAI-tis), 58, is a popular stage actor who worked for 
many years at the Lithuanian State Youth Theater.  He also 
has been involved with radio and television productions, and 
has taught at the Vilnius Conservatory.  He was nominated by 
the celebrity-laden National Revival Party.  He is not a 
member of the Seimas.