Austerity-weary Lithuanians are set to eject the country’s ruling centre-right coalition in an election this month, a move likely to delay the moment the small European Union member state joins the euro and to ease ties with Russia. However, the new government, which opinion polls show is likely to be a broad coalition led by the centre-left Social Democrats, is expected to largely stick to austerity as the Baltic state cannot afford to be frozen out of debt markets. “The situation is unbearable, half of Lithuania has emigrated,” said Svetlana Orlovskaya, 65, as she headed to work as a factory cleaner in a suburb of the capital city Vilnius. She said Prime Minister Andrius Kubilius, head of a four-party coalition since 2008, had not done “anything good”.
The election is likely to influence when Lithuania seeks to join the single currency. Kubilius has said 2014 would be a realistic date, but Social Democratic leader Algirdas Butkevicius told Reuters he is aiming for 2015. Along with Latvia and Estonia, Lithuania has been held up to euro zone states as an example of how to successfully implement tough austerity measures. It cut spending and raised taxes following the 2008 global crisis. The flip side, however, was falling wages and living standards and a 15 percent drop in output in 2009. Some growth has returned, but thousands have emigrated, the jobless rate is 13 percent and the country remains one of the poorest in the EU.
Kubilius, 56, a veteran politician, has defended his record, which included keeping the litas currency pegged to the euro. “Back in 2009 the budget deficit would have been 15 percent (of GDP), but it ended at 9 percent. This year it will be about 3 percent,” he said in his office. But political scientist Kestutis Girnius of the Institute of International Relations and Political Science said people were fed up with austerity, and with Kubilius, who has a dour image. “As one of his advisers has said, he seems like a surgeon who would say ‘Let me cut off the leg, but you won’t get any anaesthesia’,” said Girnius.
Full Article: Lithuania to reject austerity, quick euro entry in vote.