Lithuania’s Peasant and Green Party (LVZS) needs to find compromise on taxes and social reform in the exclusive coalition talks it has launched with the Social Democratic Party (LSDP), the leader of the agrarian party, which surprised as it took the most votes at elections in late October, said late on October 31. The negotiations with the outgoing government coalition leader were started after the centre-right Homeland Union left parallel discussions over forming the next government.

The conservative LVZS swept to a surprise victory in the election but is short of mandates to form a majority in the Seimas. For the left-leaning LSDP, which led the coalition over the past four years but flopped in this year's vote, the coalition talks are an opportunity to maintain its role in government. Teaming up could test the patience of both parties, which come from opposite sides of the political divide.

The LVZS said as the talks kicked off that it expects the talks would last just a week. Despite sharing a reasonably close outlook with the agrarian party, Homeland Union has often clashed with its leadership, and the centre-right party announced on October 28 that it would not discuss forming a coalition without imposing several conditions.

Immediately after the election, LVZS leader Ramunas Karbauskis had hinted the party could enter into coalition talks with either of the traditional mainstream parties. However, despite the ideological gap, a coalition with the LSDP appears a better fit for the party leader.

“A more convenient partner for LVZS would be the Social Democrats, who have been weakened as a result of losing power,” Polish think-tank Centre for Eastern Studies (OSW) wrote recently. 

Elected by a clear reaction against the established parties and their failure to revive the tough economic conditions for the bulk of voters, Karbauskis is evidently aware of the populist mood that elevated his young party. Although economic and security policy is unlikely to change significantly, the left-leaning LSDP will offer more support for the LVZS economic platform.

The pair will likely be at odds concerning tax policy and social reform, however, Karbauskis warned as the talks started. The Social Democrats would struggle with the Christian, pro-family outlook of the agrarian coalition leader.

“We have to do everything to halt emigration, to solve the disaster demography has become," Karbauskis told news portal Delfi.lt. "Another important thing is the reduction of poverty. There is a goodwill from the social democratic side in that they understand the importance of change."

OSW notes that Karbauskis' business empire would also have an easier time with the Social Democrats in government than Homeland Union. The latter would push for further deregulation of the economy, which would raise competition for Agrokoncernas, his agricultural machinery and fertiliser company. However, pressure against the inclusion of the LSDP is likely from the influential President Dalia Grybauskaite.

LVZS' swift rise echoes other recent election results in Europe and around the globe, even if it is not an exact parallel to right-wing populist surge seen in many countries. As with the push into power by 'celebrity' led parties such as Ano in the Czech Republic, LVZS has benefitted from a general dissatisfaction with mainstream politics, and especially corruption and neoliberal economics.

Karbauskis will not seek the prime minister's chair. The most likely candidate for that post is Sualius Skvernelis, a popular former anti-corruption police chief.