The conservative Peasants and Green Union (LVZS), surprise winner of the Lithuanian election in October, agreed on November 9 on a coalition with the Social Democrat Party (LSDP), the outgoing leader of the current government.

The conservative LVZS swept to a surprise victory in the election but is still short of mandates to form a majority in the Seimas. For the left-leaning LSDP, which led the government over the past four years but flopped in this year's vote, the coalition presents an opportunity to maintain its role in government.

LVZS Chairman Ramunas Karbauskis said his party will hold the prime minister's seat and 11 others in the new cabinet. The party won 56 of the 141 seats in parliament at the vote. The Social Democrats, which will have 17 MPs, will control three ministries.

The agrarian party benefitted from the populist wave sweeping the Western world. Although LVZS policy pledges remain largely mainstream, Lithuanian voters did, however, show clearly that they have run out of patience with Homeland Union and LSDP - the country's two major parties.

Corruption and neoliberal economics are the main issues to have angered the electorate. The new government's agenda prioritises plans to decrease income inequality, stem emigration and improve education.

“We have to do everything to halt emigration, to solve the disaster demography has become," Karbauskis told news portal Delfi.lt. recently. "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."

However, while economic and social policy looks set to push to the left, security policy priorities - membership in the EU and Nato - will remain unchanged. Those bodies are seen as the Lithuania’s greatest defence as geopolitical tension with Russia persists. The new government will undoubtedly join its peers in Estonia and Latvia in warily eyeing the US approach to Nato under Donald Trump’s presidency.

Teaming up could test the patience of both parties as they come from opposite sides of the political divide. The centre-right Homeland Union, which came second in the election, was seen as a more natural match for LVZS, but the two parties share little love for one another, and talks on a potential coalition quickly broke down earlier this month.

The Social Democrat party is a more convenient partner due to its weak showing at the election, suggest some analysts. The left-leaning party is also likely to support economic policy that will offer Karbauskis' agricultural business empire an easier time. 

The two parties have had to smooth differences concerning tax policy and social reform, Karbauskis says. The Social Democrats could also struggle with the Christian, pro-family outlook of the agrarian coalition leader.

The coalition parties will control 71 of the 141 seats in parliament. The new government is expected to take over in December after formal steps are taken by the Seimas to approve the government programme and new prime minister.

A popular former anti-corruption police chief, Saulius Skvernelis, remains the most likely to take the PM's chair. Karbauskis has long said he will not lead the government, and is unlikely to hold an official role in the administration.