Teneo-Europe-Report

September 17, 2020

Europe

LITHUANIA: Tight electoral battle will bring few policy changes

BY Andrius Tursa

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( 4 mins)
  • Nearly three weeks ahead of the first round of the general election, the ruling Lithuanian Farmers and Greens Union (LVZS) and the opposition Homeland Union-Lithuanian Christian Democrats (TS-LKD) stand neck to neck in the opinion polls.
  • This parity gives the incumbent LVZS greater chance of leading the next government due to more potential coalition partners.
  • Policy priorities of both the LVZS- and the TS-LKD-led governments would be similar, but the latter could offer higher-quality governance.

Twenty-two lists are competing for mandates in the 141-seat unicameral parliament. In the country’s mixed electoral system, 70 deputies are elected on a proportional basis from national party lists (5% of vote threshold), and 71 parliamentarians are elected in single-member constituencies under a majoritarian two-round system. The first-round vote is scheduled for 11 October and the second-round runoff is set for 25 October.

The successful handling of the pandemic and of the associated economic downturn has boosted public support for the ruling LVZS, which now polls virtually on par with the center-right opposition TS-LKD. The center-left Lithuanian Social Democratic Party (LSDP) remains in a firm third position.

LITHUANIA: Tight electoral battle will bring few policy changes 1

Besides the three leading lists, at least five other parties have realistic chances of winning seats in parliament via the proportional vote (first round). One of them is the ethnic minority Electoral Action of Poles in Lithuania (LLRA), which tends to outperform pre-election polls due to its highly active electorate. Also, the return of Viktor Uspaskich as the head of the populist Labor Party (DP) could bring it back to parliament after the four-year break. Meanwhile, the new leadership of the Liberal Movement (LRLS) is gradually regaining public trust after the high-profile corruption scandal that shook the party back in 2016. Moreover, the general vote will see two notable newcomers: (1) the populist Freedom and Justice (LT) led by three well-known albeit controversial politicians; and (2) the newly established Freedom Party (LP), whose liberal agenda is quickly gaining popularity among young urban voters.

However, public opinion polls cannot fully reveal the contours of the next parliament due to the mixed electoral system. Individual qualities rather than party affiliation play a much greater role in single-mandate districts and can significantly alter the outcome of the vote.

If, nonetheless, the ruling LVZS and opposition TS-LKD win a similar number of mandates (as predicted by the polls), the former would have the higher probability of heading the next cabinet due to more potential coalition partners. The ruling party would be inclined to partner with the LSDP, LLRA, DP or LT, while the opposition TS-LKD’s closest allies include only two liberal parties LRLS and LP, both of which will fight to enter parliament. The so-called “rainbow coalition” between the two traditional rivals – the center-right TS-LKD and the center-left LSDP – may be possible but risky due to potential backlash from their respective electorates.

The general policy direction of the LVZS- or the TS-LKD-led governments would be similar. Both parties are committed to a tight fiscal policy, a pro-Western (and anti-Russian) foreign policy and an investment-friendly business environment. Advancing energy and transportation links with the EU (mostly via Poland) will be an important priority in the next four years. On the domestic front, both parties will face the challenges of reforming largely inefficient education and healthcare systems as well as increasing state support for the most vulnerable social groups. Finally, both the LVZS and TS-LKD will seek to realize their visions for the country’s long-term economic development to break out of the perceived “middle income trap”.

Despite a similar policy direction, the opposition TS-LKD-led government could offer higher-quality governance as its electoral list entails more experienced and well-regarded politicians. Meanwhile, the LVZS relies more on non-partisan professionals who may leave the cabinet after the current term. Also, the ruling party’s calls for greater state involvement in the banking, food and pharmaceuticals sectors stirred some concerns among investors in the past.

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