Tuesday, 16 October 2012


The Lithuanians, given a chance to express their approval or disapproval of the austerity programme, appear to have voted out their Conservative Government. With some results still to come in yesterday, the two leftist parties, Labour and the Social Democrats, appear to have finished first and second, and their leaders have met to discuss terms of a coalition. Lithuanian PM Andrius Kubilius' government has been punished for cutting pensions and public wages.

Voters passing judgement on austerity in Lithuania (Associated Press)
In a seperate referendum, the Lithuanians have voted against plans for a new nuclear power station, which the government had previously said the plant would cut dependence on imported Russian energy. Environmentalists and other political parties had questioned its affordability. The result from Sunday's referendum is non-binding, but surely leaves a vast question mark hanging over the future of the proposed plant.

The former government enforced a harsh austerity programme, to stave off national bankruptcy. Lithuania’s economic output dropped by 15%, unemployment soared and thousands of young people emigrated in search of work. Of late the Lithuanian budget deficit has largely been dealt with and GDP reached growth of 5.8%.

Lithuania's harsh approach won praise from other governments and the International Monetary Fund. Yet the price paid by ordinary Lithuanians’ came far too late to be translated into a political revival for the conservative government, who have paid the price at the polls. The opposition had promised to raise the minimum wage, make the rich pay more tax and put back euro entry until 2015.

In the Lithuanian general election, with election counting complete in three-quarters of voting districts, the Labour party are on 21%, the Social Democrats on 19%. The former Prime Minister Kubilius' Homeland Union Party is on 13%. The bottom line may well be that if you give the people a change to express their option on austerity and you may get a decisive answer...this scenario may increasingly play on David Cameron's mind over the next few years.

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