Austerity-weary Lithuania elects new left-wing govt

Lithuania's left-wing and populist opposition parties Monday moved swiftly to form a new government after austerity-weary voters evicted the Baltic state's Conservative-led coalition in a general election. As the results of Sunday's parliamentary polls rolled in, the leaders of Labour, the Social Democrats and Order and Justice parties held a closed-door meeting in a Vilnius hotel. "We're creating a working group to start consultations on a coalition," Labour leader Viktor Uspaskich told reporters after the trio's talks. In power since 2008, the Conservatives drove through biting spending cuts amid one of the world's deepest recessions, but failed to reap the electoral rewards of economic recovery. Figures from the national elections commission released in the early hours of Monday, covering 1,237 of the country's 2,017 polling stations, gave the leftwing populist Labour party almost 23 percent of the vote. The centre-left Social Democrats followed with close to 20 percent, ahead of the Conservatives on almost 13 percent. Seventy members of Lithuania's 141-seat parliament are elected by proportional representation from party lists in the first round. The remaining 71 are chosen in single-member constituency races, with two-candidate run-offs on October 28 where no candidate won a majority on Sunday. Less than half the constituency seats tend to be decided in the first round. But in past votes the final balance of forces has been sufficiently clear after the first round to enable the process of forming a government to begin immediately -- even if who gets which job is only announced after the second round. "We won't talk about the prime minister or ministers before the results of the second round are clear," said Uspaskich. The Russian-born ex-minister and businessman -- best known for his gherkin business -- is a controversial figure who is subject to a party funding probe, and is highly unlikely to become premier. "We did not talk about that. So far we agreed only on forming a ruling majority," he said. The rightwing populist Order and Justice party -- run by impeached former president and ex-stunt pilot Rolandas Paksas -- scored just over nine percent. Three other parties were shown clearing the five-percent hurdle required for seats in parliament: the new anti-graft Way of Courage movement with 7.04 percent, the Conservatives' Liberal Movement governing allies with 6.44 percent, and the Lithuanian Peasants' and Greens' Union with 5.14 percent. The left-leaning parties pledge to raise the minimum wage and introduce a progressive income tax, but Butkevicius, a former finance minister, has played on his prudent credentials. He quit in 2005 when a Social Democrat-led government failed to close the gap between spending and revenue. Kubilius -- the only premier to survive a full term since Lithuania seceded from the Soviet Union in 1990 -- ousted the Social Democrats in the last election in 2008. His message then was that the Social Democrats let growth stoked by credit and wage hikes get out of control and left the nation of three million people ill-prepared for hard times. Kubilius was also premier in 1999-2000, when Lithuania was lashed by the economic meltdown in neighbouring Russia. But the 2009 crisis was far deeper, as Lithuania's economy shrank by 14.8 percent. In response, his government undertook a tough austerity drive well beyond those of western members of the European Union, which Lithuania joined in 2004. "We took responsibility for crucial decisions and guaranteed a responsible fiscal policy. I hope this responsible policy will continue," Kubilius had said after casting his ballot on Sunday. Growth returned in 2010, at 1.4 percent, before hitting 6.0 percent in 2011, but analysts say too few voters have felt the benefits. The government forecast growth to slow down to 2.5 percent this year, and a rate of 3.0 percent in 2013. The left also pledges to "reset" ties with Moscow, rocky since independence and spiking over alleged market abuses by Russian energy giant Gazprom, Lithuania's sole gas supplier.