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Interview with
political scientist
Dr Raimundas Lopata

Inga Pavlovaitė

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.

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In a long-term perspective, Social Liberals face a danger of a political identity crisis that could end the existence of the New Union. So one party could altogether disappear from the political scene. Liberals, on the other hand, are stuck with the possibility of internal division. The split-up would immediately diminish the party's popularity. Thus, liberals are not unlikely to experience a downward movement in the opinion polls and the status of a marginal party.

Does it mean that both parties served certain roles only for the last elections? How does it affect the country's party system?

Yes, they performed their role at that point. We have to wait for the next elections to see if that was a one-off phenomenon. It shows that the party system in Lithuania is still in transition.

The new coalition of Social Democrats and Social Liberals took power in June. It is only the first months of the new government, and summer is more a holiday time in the politics. Nevertheless, what are the implications of the leftist government for the country's economic and social policy course? Will the new government try to halt the privatisation programme?

There has not been sufficient time on which to base a long-term forecast.

One of the more interesting appointments from the new government was the head of the European Committee that went to Social Democrat Vytenis Andriukaitis. In past, he consistently expressed serious reservations about European integration. How does his appointment affect the pace and speed of EU accession process?

It is difficult to say. Let us wait till autumn and the new round of negotiation. Party attitudes can change Andriukaitis' position. At this point, the pro-Western oriented wing has gained an upper hand in the Social Democrat party.

Brazauskas, one of the most popular politicians in the country, has become the new Prime Minister. Presuming that he will not put up his candidacy, is the outcome of the next year's presidential election thus sealed for Adamkus's second term as president?

It is not clear whether president Adamkus is going to put forth his candidacy.

What is the likelihood Brazauskas will not put up his candidacy?

It is difficult to estimate today. It is most likely that Brazauskas and the Social Democrats will make up their minds in the autumn. The decision will depend on many factors, including the internal political and economic situation and possible moves to achieve the objective by an effective and surprising decision, for instance, the candidacy of Justas Paleckis, a prominent figure in the party and currently an ambassador to the United Kingdom. Speaking generally, it is clear that the political scene is moving toward the left, and popular sympathies are geared toward leftist parties.

Do you see the comeback of the left as a predictable backlash against the four years' rule of the conservative party? Or is it a case that the right-wingers in Lithuania are losing their cohesion and have little to offer that would appeal to an average citizen?

So far, judging from the policies, the left is implementing the programme of the right.

How long will the coalition survive? What would be the most difficult issues to handle for Social Democrats and Social Liberals?

Lots of influences, both internal and external, will have significance. It is most likely that the latter—a negative reaction from abroad—is gone.

I have in mind the articles in the foreign press before and during the appointment of Brazauskas as Prime Minister and recent ones in the Financial Times. In fact, they were quite favourable to the new government, emphasising its centrist credentials.

Then there is also the factor of the negotiations with the EU and integration into NATO and, importantly, the Russian position towards the privatisation of the Lithuanian energy sector. Russian-owned oil consortium Gazprom, so far the monopolist supplier of crude oil to Mazeikiu Nafta, has demanded a 51 per cent stake in the company in which US-based Williams International is a strategic investor. Internally, the macro and microeconomic indicators and the proceedings of privatisation process will influence the work of the coalition.

Inga Pavlovaitė, 7 October 2001

Inga Pavlovaitė is completing a Master of Arts degree in European studies at the University of Birmingham where her studies focus on Central European politics and economics.

Moving on:


Vol 3, No 27
8 October 2001

Inga Pavlovaitė
Lithuanian Privatisation

Stefan Troebst
Battle in the Balkans

20 Years After

Štěpán Kotrba
Sow and Reap

Brian J Požun
Shedding the Balkan Skin

Martin D Brown
Czech Historical Amnesia

Dejan Anastasijević (ed)
Out of Time

Gusztáv Kosztolányi
Hungarian Oil Scandal

Sam Vaknin
After the Rain

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