DOMESTIC POLITICS: Following the formal withdrawal of support by 11 former members of the now-defunct National Resurrection Party (TPP), the ruling coalition now commands only a small majority in the Seimas (parliament), with 71 seats out of the current 139 (two Seimas seats are vacant following the election of two deputies to the European Parliament). Its position will therefore be increasingly tenuous. The coalition is dominated by the centre-right TS-LKD, and also includes three smaller parties: the Liberal Movement (LS), the Liberal and Centre Union (LCS), and the rump of the TPP. Even when the coalition commanded a sizeable majority, it was an unstable partnership, with disagreements emerging over tax, education and social policy reforms. Tensions within the coalition will increase as popular discontent grows and the recession continues. The legislature will continue to be beset by deep ideological divisions and the demands of a vocal populist element. Nevertheless, the our baseline forecast remains that the prime minister, Andrius Kubilius, will stay in office for the rest of the forecast period. The dominant position in the Seimas of Mr Kubilius's TS-LKD, which leads the ruling coalition, makes it well placed to dictate the policy agenda over the forecast period, even if it has to find alternative coalition partners.

Source: Lithuania: Country outlook

Source: Country Forecast Lithuania June 2009

Source: EIU Country Data