What can international investors expect from the change of government?
October 28, 2020
On October 25, Lithuania held the second round of its parliamentary elections. 73 MPs were appointed in the first round on October 11th, with voters then electing the remaining 68 single district MPs to the Seimas, the country's unicameral parliament, in round two [1] .
As was widely expected, Lithuania's largest opposition party, the centre-right Homeland Union-Lithuanian Christian Democrats (TS-LKD), won the election after securing 50 of the 141 seats across the two rounds. Gaining close to 25.8% of the popular vote, the party secured 23 seats in the nationwide multi-member constituency (of the total 70) and another 27 seats in the country's single-mandate electoral districts (of the total 71). The victory comes after a growing level of social anxiety over the impact of the coronavirus crisis: unemployment has soared and support for the Government's handling of the crisis flagged in recent months.
Defeating the incumbent Lithuanian Farmers and Greens Union (LVŽS) in both the multi-member and single-mandate constituencies, the Homeland Union now looks set to form a coalition with two liberal parties –the Liberal Movement, a former coalition partner between 2008 and 2012, and the Freedom Party, a newly founded liberal formation which has campaigned for issues such as legalising same-sex marriage, carbon neutrality by 2040 and drug decriminalisation. With the Liberal Movement securing 13 seats and the Freedom Party 11, the three parties would have a slight but comfortable majority in the 141-member legislation.
While some expected LVŽS to remain in government, rising criticism of its pandemic response proved fatal to its chances: support for the party fell from 22.4% of the popular vote in 2016 to 18.1%, while growing for Homeland Union from 22.6% to 25.7%. These are significant changes given the multi-party nature of Lithuanian politics, with 8-9 parties generally active on the national arena, although LVŽS has retained enough support to command an important role in opposition.
Below, we take a deeper look at the election results, as well as what it means for Lithuania's immediate policy direction and the likely impact on the business and investment communities.
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