Viewing cable 08VILNIUS962
Title: NEW GOVERNMENT TAKES SHAPE, SEEKS TO DEAL WITH

IdentifierCreatedReleasedClassificationOrigin
08VILNIUS9622008-11-10 16:14:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
VZCZCXRO7672
PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHVL #0962/01 3151614
ZNY CCCCC ZZH
P 101614Z NOV 08
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC PRIORITY 3062
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000962 
 
SIPDIS 
 
E.O. 12958: DECL: 11/10/2018 
TAGS: PGOV PREL LH
SUBJECT: NEW GOVERNMENT TAKES SHAPE, SEEKS TO DEAL WITH 
ECONOMIC CHALLENGES 
 
REF: A. VILNIUS 912 
     ¶B. VILNIUS 855 
 
Classified By: Ambassador John Cloud for reasons 1.4 (b) and (d) 
 
¶1. (U) Summary: Lithuania's new government is taking shape as 
the four parties in the ruling coalition divide up 
ministerial posts and draft the government program.  The 
parties agree that their most pressing task is to deal with 
economic challenges.  While most of these result from 
Lithuanian policies, the coalition leaders recognize the 
global financial crisis puts Lithuania at increased risk. 
The new government will be strongly pro-NATO and supportive 
of continuing close ties to the United States.  It will also 
continue to be very suspicious of Russia.  End Summary. 
 
An experienced PM and a celebrity Speaker 
----------------------------------------- 
 
¶2. (C) The new prime minister will be Andrius Kubilius, head 
of the Homeland Union-Lithuanian Christian Democrat Party 
(known as the Conservatives) that won the most seats in 
October elections for the parliament (Seimas).  Kubilius 
served as prime minister in 1999-2000, in the aftermath of 
the Russian financial meltdown that hit Lithuania's economy 
badly.  As prime minister he reoriented Lithuania's economy 
away from Russia to the West, which helped lead to years of 
rapid economic growth.  He has worked well with the Embassy 
in the past and is a strong supporter of U.S.-Lithuanian 
ties. 
 
¶3.  (C) Arunas Valinskas, the TV host heading the 
celebrity-studded National Revival Party, will be the new 
speaker of the Seimas.  He created the National Revival Party 
earlier this year with a slate of Lithuanian entertainers, 
but said before the elections that he would chose experts to 
fill any government offices his party obtains.  He told the 
Ambassador before the elections that his primary goal was to 
ensure that the party of impeached former President Paksas 
did not form the new government. In this he succeeded as his 
new party siphoned off support from other populist parties, 
Paksas's and businessman Uspackich's Labor Party.  Valinskas 
is inexperienced, but we expect him to be centrist. 
 
Home grown economic problems 
---------------------------- 
 
¶4. (C)  Kubilius blames the economic challenges Lithuania 
presently faces on the irresponsible policies of the outgoing 
government led by the Social Democrats (SDs).  In the recent 
past, when times were good with GDP growing at an impressive 
pace, the SDs were able to spend a lot and save nothing. 
Kubilius made clear in statements he made to the Press that 
the GOL should have controlled the budget deficit.  Instead, 
the outgoing PM and the Finance Minister "are either afraid 
or incapable of speaking openly about the situation." 
Kubilius has called for an overhaul of the tax code and 
abolition of some VAT exemptions to increase revenues by $600 
million, combined with budget cuts of $700 million. 
 
Likely key ministers 
-------------------- 
 
¶5.  (C) Listed below are the coalition's candidates to lead 
key ministries. 
 
-  Economy:  Dainius Kreivys, a businessman, is new to the 
Seimas. He is an economic analyst and has been chief 
executive of furniture and public-relations companies. 
 
-  Energy:  The new government is separating the energy 
portfolio from the Economy Ministry. Arvydas Sekmokas, the 
front-runner for Energy Minister, was vice-minister of 
Economy in 1991-92 and is CEO of an IT company. 
 
-  Defense:  Conservative party vice-chair Rasa Jukneviciene 
is slated to become Lithuania's first female Defense 
Minister. She has served on the Seimas's National Security 
and Defense Committee and Commission for NATO Affairs, and 
chairs the Seimas delegation to the NATO Parliamentary 
Assembly. 
 
- Finance:  Former Minister of Finance Algirdas Semeta is to 
take that post again, leaving his current job as director of 
Lithuania's statistics department. 
 
-  Foreign Affairs:  Former ambassador to the United States 
and current ambassador to Great Britain, Vygaudas Usackas, is 
the official candidate, according to Kubilius. 
 
-  Health:  The head of the Liberal and Center Union, Arturas 
Zuokas, who is a former mayor of Vilnius, is expected to be 
 
VILNIUS 00000962  002 OF 002 
 
 
put forth by his party to become Minister of Health. Zuokas 
is known as an excellent manager.  However, he was recently 
convicted of corruption.  (Zuokas was not sentenced for his 
corruption conviction and remains eligible for a ministerial 
position.)  But Kubilius, asked by the Press about the 
conviction, said he "would really like the new government to 
start work without any personal blemishes." 
 
-  Transportation:  Eligijus Masiulis, head of the Liberal 
Movement party, will head the Transportation Ministry. 
 
 
CLOUD