Centre-right parties begin coalition talks in Lithuania

FOUR CENTRE-RIGHT parties have started talks to form Lithuania’s new government, as fears over recession and a resurgent Russia cast a pall over the once-booming Baltic state.

The conservative Homeland Union won the general election, which was spread over the last two weekends. It began coalition talks yesterday with the smaller National Resurrection Party, which was formed this year by a television talent-show host, and with the Liberal Movement and the Liberal and Centre Union.

The parties will have 79 seats in the 141-seat parliament. They are facing pressure to form an alliance swiftly and to get to grips with a worsening financial outlook for Lithuania, which has enjoyed rapid growth since joining the EU in 2004. Economic growth eased to 3.1 per cent in the third quarter of this year, the slowest pace in nine years.

“Soon we are going to work out a plan on how to cope with the challenges of the looming economic and financial crisis,” said Andrius Kubilius, leader of the Homeland Union, who served as prime minister in 2000 at the end of the conservatives’ last term in office.

Arunas Valinskas, the former television presenter who leads the National Resurrection Party on a pledge to clean up politics and restore public faith in politicians, added: “We hope this strong coalition will be in office for the next four years.”

Outgoing prime minister Gediminas Kirkilas admitted electoral defeat and said his centre-left Social Democrats would form a “firm but constructive opposition”.

“The right has taken the initiative. But if they can’t agree, then we’ll see,” he said in reference to the coalition negotiations.

“We’re ready to talk to any party that backs our programme,” he added.

Mr Kirkilas’s popularity with his 3.4 million compatriots suffered as inflation soared and economic growth rapidly declined in Lithuania, as years of cheap credit and strong domestic demand for products evaporated across the Baltic states in just a few months.

The election-winning Homeland Union wants to slash government spending and drop exemptions from the value-added tax rate, while cutting personal income tax to soften the blow of the expected economic crisis.

Mr Kubilius may also face foreign policy challenges. He sharply criticised neighbouring Russia over its recent military intervention in Georgia. But Lithuania is likely to become more reliant on Moscow’s energy if it shuts an ageing nuclear reactor next year, as the EU demands.