An exceptionally hot summer in Lithuania has matched heat in the political scene, with tempers igniting over privatisation issues among parties and MPs. As a result, Prime Minister Rolandas Paksas left office in June during Parliament's traditional summer recess with the collapse of Lithuania's first ruling coalition.
The coalition of leftist parties led by Paksas and Seimas Chairman Arturas Paulauskas fell apart with Paksas losing his job. Initially, Paulauskas of the New Union Party asked Paksas to resign, accusing him of incompetence and constant obstruction of the coalition's work. A reluctant Paksas gave in only after talks with President Valdas Adamkus. Consequently, the first coalition in post-1990 Lithuania collapsed. After several days of intense negotiations, Social Liberals formed a new combination with the Social Democrats' president, Algirdas Brazauskas, taking the post of prime minister.
The shift occurred against a background of disagreements over energy sector privatisation and charges of incompetence over issues pertaining to supplying crude oil to the debt-ridden refinery Mazeikiu Nafta, privatized in 1999 when American company Williams International bought a 33 per cent stake and sales of the gas sector piece-by-piece to Russian-owned companies. A deal, finally consummated by Parliament in late summer, worth 300 million litas (USD 75 million) meant to stabilise Mazeikiu Nafta gave Russian crude supplier Yukos about a 27 per cent stake in the refinery.
The pact supplies 4.8 tonnes of crude annually to the oil concern for ten years, and marks completion of political jockeying—including a walkout by the New Union party—to change Lithuanian law forbidding any single strategic investment of over 24 per cent as well as a pragmatic acceptance of a Russian concern owning a large stake in a Lithuanian state company. Indeed, the deal dropped Lithuania's share of the refinery and pipeline concern from 59 per cent to around 40 per cent.
But while Mazeikiu Nafta worked below output capacity because of disruptions of oil transit from Russia, the media reported a visit by Brazauskas to Moscow, as he put it, to see an old friend, when it seemed more likely an attempt to influence the privatisation process and the energy business. High-flying accusations of betrayal featuring charges that Paksas sat in the pocket of Russian companies flew from side to side.
To help sort it all out, CER asked Dr Raimundas Lopata, director of the Institute of International Relations and Political Science at the University of Vilnius, to shed some light on latest developments on the Lithuanian political scene.
Central Europe Review: The political scene after the election of autumn 2001 was turbulent, not least because it was the first coalition government in the country. Disagreements between Social Liberals and Liberals were present from the start of the new government. Still, as a political scientist, were you surprised at the breakdown of coalition government in June? Or, did you see the signs of failure along the way?
Dr Raimundas Lopata: The durability of coalition depended on meeting several objectives. One was the level of political culture, the ability to reach a consensus and a creation of suitable mechanisms for this. Another, the ability to balance political and party issues with lobbyists' demands.
It is clear that the West Lithuanian industry and financial corporation was standing behind the New Union (social liberals), not to mention Viktor Uspaskich who is the head of corporate giant Vikonda with its strong ties to Russian companies. We should also note that Bronislavas Lubys, the head of West Lithuanian industry and financial corporation, lives and works in western Lithuania. Brazauskas, before becoming Prime Minister, supposedly represented Lubys' interests Brazauskas, also lives and works in western Lithuania.
Clashes over the budget and the privatisation of energy sector also contributed to the breakdown. Immediately after the formation of coalition, I remarked that the vitality of the coalition would be determined by the partners' attitudes toward budget and privatisation.
What were the attitudes of coalition partners to privatisation and budget that contributed to the breakdown of coalition?
Speaking about the budget, I first of all have in mind disagreements that arose last autumn about the financing of the Defence Ministry. Social Liberals were reluctant to go ahead with [NATO-required] two per cent GDP spending for defence, because during the election campaign, they openly questioned the amount involved in the preparation for NATO membership.
As for privatisation, I refer to the way the gas sector is being sold off. This goes back to the question of consensus, which was found in the issues of EU and NATO membership. For instance, all the parliamentary parties signed a declaration supporting EU membership in January 2001. In other words, the question of consensus depends on very concrete circumstances in question. In this case we are speaking about the last millions of litas the privatisation of the energy sector would bring. Who could deny a possibility of money leak in such a large-scale financial and political operation?
What are the principal causes of the coalition's collapse?
I think the principal cause has become the privatisation of the energy sector and clashes over the gas (the privatisation of Lietuvos Dujos) and oil (Mazeikiu Nafta) sectors. It is not entirely clear what role should be assigned to political culture (for instance, personal ambitions), tactical moves in the coming presidential elections and external causes.
What external causes do you have in mind?
The influence of external causes in Lithuanian political stage is a rather subtle question. I do not have enough information, but one fact is quite telling. It is Moscow's recent decision to spend impressive financial resources for anti-NATO propaganda. Russians are not hiding intentions to spend a part of the money on "work with the Baltic elite."
The media were reporting allegations that the Prime Minister is in fact an advocate of Russian-owned companies' interests in Lithuania. Do you find the claim plausible?
Talking about Paksas, the allegations were hardly supported by any evidence. The sole fact that Paksas speaks only Lithuanian and Russian is a telling but weak argument in this context. It is more a question of mentality.Which party has lost more in the collapse: Liberals who are ousted from the government or Social Liberals who can acquire the reputation of an unreliable party of intrigues?
In a short-term perspective, opinion polls show that liberals would get past the five per cent barrier required by law to get proportional representation seats in the parliament. In contrast, Social Liberals at the moment would get less than five per cent votes.