EU country briefing: Lithuania

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The following article is a part of a series of brief country profiles for the EU-28 ahead of the European elections in May.

Lithuanians enthusiastically voted to join the EU in 2003, with 91% in favour, and the southernmost Baltic state became a member the following year, along with nine other countries. It was a historic step in consolidating the independence Lithuania gained in 1991, after having been a part of the Soviet Union.

It went on to join the Schengen area in 2007 and was the last Baltic country to adopt the euro in 2015, following Latvia (2014) and Estonia (2011).

In 2017, Lithuania had a population of around 2.8 million, 0.6% of the EU27 (without the UK). It has faced a serious demographic decline, with one of Europe’s highest emigration rates, especially after joining the EU.

The country was home to more than 3.7 million people in 1991 but by 2050, its population could fall below 2 million if the prevailing emigration rate continues.

Despite its relatively small size, the Grand Duchy of Lithuania used to be one of Europe’s largest state entities and reached its zenith of power together with Poland as the Polish-Lithuanian commonwealth in the mid-16th century.

The country is also home to several minorities. Apart from ethnic Russians (5%), it also has a notable Polish minority (5.6%), resulting from its shared history with Poland, concentrated in the Vilnius region.

Most Lithuanians consider EU membership as positive (71%) and feel like EU citizens (77%), above the EU averages of 61% and 71% respectively. Two in three (67%) support the Euro, above the EU average of 62%.

Bucking the European low turnout trend, 47.3% of people voted in 2014’s European Parliament (EP) elections, which was higher than the EU’s average of 43%. However, this has to do with the timing of the election, which coincided with the second round of the country’s presidential elections.

Economy

Lithuania’s economy has been expanding steadily, with an average GDP growth rate of 3.1% between 2014 and 2018, outperforming the EU average (2.1%) despite a serious economic downturn the country experienced during the financial crisis. Slower growth has been forecast for this year and next, with rates of 2.7% (2019) and 2.4% (2020), as a result of the global trade uncertainty.

Moreover, domestic problems, including the brain drain, ageing, poverty and income inequality (and a lack of reforms to tackle those), undermine Lithuania’s long-term economic prospects.

Last year, more than one out of five people lived below the national poverty line, with the number increasing, especially in the rural areas. This is the worst rate among the three Baltic states. Median hourly earnings were also the third lowest in the EU (2014 data), after Romania and Bulgaria.

Unemployment was at 6.2% in 2018, a touch below the EU average of 6.8%, representing a notable drop from the peak of 17.8% recorded in 2010. Moreover, 11.1% of young people were unemployed in the same year, below the EU average of 15.2%. This was also a significant improvement compared to the previous decade when at times one in every three young people was unemployed.

The Lithuanian economy was worth over €42 billion in 2017 (real GDP), representing 0.32% of the EU’s total economy (minus UK).

Moreover, real GDP per capita was €12,700 in the same year, placing it in between Latvia (€11,600) and Estonia (€14,600). This remains far below the €27,700 EU average. In purchasing powers terms, Lithuania’s GDP is on par with Estonia’s, at 78% of the EU average. Moreover, Lithuania’s minimum wage has quadrupled in the last 15 years.

Political context and direction

Following the human chain across the Baltics in protest over the USSR in 1989 (the historic “Baltic Way”), Lithuania slowly progressed towards independence. The country’s struggle was one of the most violent in the Baltics, leaving 14 dead on 13 January 1991 as they formed a human shield around a radio tower to defend it against an attempt by Soviet forces to retake power.

An independence referendum followed a month later, with 91% voting in favour. Independence was only achieved some months later, however, following the failed coup of August 1991 by communist hardliners in Moscow. A new constitution was enacted in 1992.

In Lithuania’s semi-presidential system, the president (currently Dalia Grybauskaitė) is the head of state and commander-in-chief, holding more power than in its Baltic neighbours, especially in foreign policy. The president shares power with the prime minister (currently Saulius Skvernelis), who has the most power when it comes to routine domestic policy.

Lithuania’s political landscape is characterised by many political parties, whose power is balanced through a mixed electoral system with an electoral threshold of 5%. It is half proportional and half majoritarian, preventing the dominance of a single party.

Dalia Grybauskaitė has been Lithuania’s (first female) president since 2009. She is known as the ‘‘Steel Magnolia’’. She was not shy in criticising President Obama’s arms reduction plans, has often used her powers as president to oust ministers and has been critical of the UK government’s lack of a Brexit plan. She has also been tough on tackling corruption.

The country’s strongest political parties are currently the liberal-conservative Homeland Union (TS-LKD), social-democrat Democratic Labour Party of Lithuania (LSDP), and, since 2016, the centre-right agrarian Lithuanian Farmers and Greens Union (LVŽS).

The TS-LKD has its root in the Sąjūdis independence movement and has often finished first or second. It governed both from 1996-2000 and 2008-2012. Likewise, the LSDP has also often performed well, ending up in government from 2001-2008 and 2012-2017.

There have been recurrent short-lived, liberal parties. The Liberal Union (LLS) ended first in 2000’s elections, before declining and later merging into the (now defunct) Liberal and Centre Union (LiCS). The most notable liberal party is currently the Liberal Movement (LRLS), which split in 2006 from LiCS. It currently struggles around the electoral threshold.

Social-liberal parties include the New Union (NS) that broke through and ended second in 2000’s elections, before declining and later (2011) merging with the social-liberal Labour Party (DP). The DP ended first in 2004’s national and EP elections and won the popular vote in 2012’s national parliament elections. It declined thereafter, almost losing all parliamentary representation in 2016 before rebounding in recent polls.

LVŽS has been a minor political force since the 1990s, usually remaining below the electoral threshold (except for 2004 when it secured 6.6% of the vote). However, under Mr Skvernelis, it spectacularly secured more MPs than any other party in 2016, having won more than half of the single-member constituencies in the second round.

Its surprise win has been described as the voice of those fed up with the established political parties’ inability to break out from a context of low wages, austerity measures, and Lithuania’s existential problem: persistent emigration.

A LVŽS-LSDP coalition lasted under a year, following the LSPD’s exit. This led to a split in the party as several ministers and a group of MPs continued the coalition and formed a new political party, the LSDDP. This has made the unstable minority coalition reliant on the nationalist Party Order and Justice (PTT).

PTT was founded in 2002 [then as the Liberal Democratic Party (LDP)] by former Prime Minister (2000-2001) Rolandas Paksas, who went on to beat the incumbent president in the 2002-2003 elections. However, since his impeachment (the first in Lithuania’s history), the PTT has been a second-tier party, almost losing parliamentary representation in 2016.

On the issue of how to deal with Russia, unavoidable in Lithuanian politics, President Grybauskaitė’s hardline approach has often been often at odds with Prime Minister Skvernelis, who has favoured more dialogue and cooperation.

Both in 2018, and more recently this February, the prime minister and president – who have had a tense cohabitation – have sparred over ministerial appointments, which have been regarded as Skvernelis preparing for a presidential bid.

The first round of the presidential elections (12 May) will be held together with two referendums: one on reducing the number of MPs from 141 to 121 and, more importantly, another on dual citizenship for those who left Lithuania after 1990 and took up citizenship of the so-called countries meeting European and transatlantic criteria (e.g. EU, NATO, OECD etc). The current constitution does not allow them to keep Lithuanian citizenship.

The second round of presidential elections (26 May, the same day as the EP elections) will be crucial. This will most likely trigger a much higher turnout compared to 2014 (which was already above the EU average).

Those polling first and second are the economist Ingrida Šimonytė, a centre-right candidate backed by the TS/LKD, and Gitanas Nausėda, another independent, centre-right candidate. A recent poll indicates they enjoy support around 31% and 29%, respectively.

Prime Minister Skvernelis from the LVŽS, whose participation has been criticised for potentially undermining the balance of power (as his party’s success would be overbearing), is polling third at 20% and is not expected to make it to the second round.

Nonetheless, his loss could bring about political turmoil: the LVŽS party chairman Ramūnas Karbauskis suggested his party would move to the opposition if it loses, which could prompt snap elections. Skvernelis also confirmed he would quit if he loses.

Grybauskaitė enjoys strong standing both domestically (she is still considered the country’s most popular politician) and in the EU (she was named as a potential successor to European Council President Donald Tusk).

In any case, this year’s EP and Presidential elections could see another reshuffling of Lithuania’s deck of political cards – particularly if followed by snap parliamentary elections.

Predictions

Like in 2014, EP elections will coincidence with the second round of presidential elections. This will lead to high turnout as no candidate is expected to win an outright 50% in the first round. In 2014, this favoured the liberal-conservative TS/LKD (supporting Grybauskaitė) and social-democrat LSDP (whose candidate made it to the second round).

Therefore, this year it could be crucial which of the three top-polling candidates make it to the second round. TS/LKD, which supports Mrs Šimonytė, could profit again but so could the centre-right agrarian LVŽS, if Skvernelis makes it to the run-off.

It is unclear which parties would benefit if the independent Mr Nausėda makes it to the second round but given that his profile is also centre-right, this could be bad news for the already enfeebled centre-left parties.

In any case, one projection has put the TS/LKD and LVŽS in first and second place, with 25% and 22% of the vote respectively. This would translate to three MEP seats each, for the European People’s Party (EPP) and Greens–European Free Alliance (Greens/EFA).

Coming in third by a wide margin is the once-dominant social-democrat LSDP. Polling at 11% (even less than at the previous national elections), they could secure two MEPs for the Progressive Alliance of Socialists and Democrats (S&D).

Three weaker parties are trailing far behind. The social-liberal DP and nationalist PTT (each polling at 6%) could snatch a single MEP each for the Alliance of Liberals and Democrats (ALDE) and Eurosceptic Europe of Freedom and Direct Democracy (EFD).

Finally, though polling at 4%, the conservative-liberal LRLS is set to win another seat for ALDE.

Robert Steenland works as an evaluation and research consultant in EU policies, as well as an analyst in EU politics.  He holds a double degree master in European Governance.

Daniel Matthews-Ferrero is a Marie Curie PhD researcher in the POLITICO programme at the University of Aberdeen, focusing on contemporary Western European populism. He holds a Master’s degree in European Interdisciplinary Studies from the College of Europe.

More on Lithuania and EU elections at EUnewsLithuania.com

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