Lithuania struggling to escape constitutional quagmire

By bne IntelliNews November 6, 2012

bne -

The three parties trying to form a Lithuanian government are set to meet with the president, who is blocking their way, in a bid to push a compromise through and ease the constitutional stalemate that has Vilnius in its grip.

Social Democrat leader Algirdas Butkevicius - the likely next prime minister - told reporters that he will meet with President Dalia Grybauskaite on November 6 in an attempt to end the constitutional stalemate blocking a new government from taking power. The president has vetoed the involvement of the Labour Party in the coalition due to charges of vote fraud.

"I would like to hear the president's opinion on whether it is possible to search for a compromise by agreeing that certain people who are being prosecuted, or who are suspects, will not be placed in high positions," he said, according to Reuters.

That suggests the Social Democrats, Labour and the Order and Justice Party hope to push past the objection by reiterating the offer by Viktor Uspaskich to remain outside the cabinet. The Labour leader is still on trial on charges of tax evasion by his party over the years 2004-2006, while party members face charges of tax fraud and buying votes in the recent election, which saw a second round completed on October 28.

The election saw the Social Democrats push the incumbent Homeland Union into second place, as Lithuanians protested four years of harsh austerity. The result offered Butkevicius the chance to to enter government alongside the country's other left leaning parties, and he quickly announced a deal.

However, to the surprise of most, Grybauskaite almost instantly announced she would block the move, insisting Labour is unfit to rule. Her announcement stopped just short of commanding Butkevicius to form a coalition with Homeland Union instead.

Backroom talks have clearly been going on since, with little news flow emerging. It remains unclear who would have the upper hand should the opposing positions harden. The president has the formal job of naming the prime minister, but parliament votes the government into office. The planned coalition will hold 78 of the 141 seats in parliament.

Butkevicius also told reporters on November 5 that the three wannabe coalition parties have agreed on a split of cabinet seats. The finance, foreign affairs and defense posts are to go to the Social Democrats, which has committed itself to maintaining "responsible" fiscal management - including acceptance of a 2013 budget deficit target of 2.5% set by the outgoing government - and is eyeing accession to the Eurozone within the next three years.

Notice: Undefined index: social in /var/www/html/application/views/scripts/index/article.phtml on line 259

Related Articles

Latvia’s Citadele Bank pulls IPO

bne IntelliNews - Latvia's Citadele Bank has postponed its initial public offering (IPO), citing “ongoing unfavourable market conditions”, the bank announced on November 11. The postponement ... more

BOOK REVIEW: “Europe’s Orphan” – how the euro became a scapegoat for policy ills

Kit Gillet in Bucharest - The euro, conceived as part of a grand and unifying vision for Europe, has, over the last few years, become tainted and often even blamed for the calamities that have ... more

Mystery Latvian linked to Scottish shell companies denies role in $1bn Moldova bank fraud

Graham Stack in Berlin - A Latvian financier linked to the mass production of Scottish shell companies has denied to bne IntelliNews any involvement in the $1bn Moldovan bank fraud that has caused ... more