Instead of becoming a regional energy power-house, Lithuanians voted for big-spending politicians, rejecting plans for a new nuclear power plant

Dealing a blow to the conservative government's vision of becoming a regional energy powerhouse, Lithuanians voted instead for big-spending politicians and rejected plans for a new nuclear power plant.

The populist Labor Party, led by a Russian-born millionaire, won Sunday's election in this Baltic nation with 20 percent of the vote, while the center-left Social Democrats came in second with 18.5 percent. The two have agreed to form a new government to replace the center-right coalition, which managed just over 23 percent of the vote.

The exact composition of the next 141-seat Parliament is still not clear pending some run-off votes on Oct. 28, but Labor and the Socialists are expected to gain a majority.
Still, analysts said Monday that the two parties, which campaigned on exorbitant promises, were unlikely to make any radical policy departures, although they would likely slow down harsh fiscal measures needed to introduce the euro in 2014, one of the conservative coalition's goals.
"Promises that the new government will stop saving and start spending big-time are unrealistic," said Nerijus Maciulis, analyst at Swedbank. "Otherwise Lithuania will soon find itself in a situation similar to Greece."
Analysts at Danske Bank agreed, writing in a Monday note that "leftist parties campaigned on a relatively populist and pro-interventionist plank ...however we expect the new coalition government to tone down the rhetoric."
In 2009, Lithuania suffered a shocking double-whammy, as its economy entered a severe recession, plunging nearly 15 percent, and a Soviet-era atomic power plant was shut down, forcing the country to switch to Russian gas.

The nation of 3 million people now imports over 60 percent of its electricity needs – more than any other European Union member. Russia currently supplies 100 percent of Lithuania's natural gas at a hefty price.

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