(Bloomberg) -- Lithuania’s Social Democratic Party won it first parliamentary elections in 12 years as voters turned to the opposition to address soaring disparities in the Baltic nation.
Social Democrats got 19.4% of the vote on Sunday, putting the party in pole position to form the next government, with the ruling conservatives from the Homeland Union close second at 18%, according to the final results.
The first round of voting showed the opposition has successfully tapped into rising discontent among the voters living outside relatively affluent cities like capital Vilnius, who have seen their incomes, pensions and social benefits eroded by a period of double-digit inflation.
Income inequality in Lithuania, a country of 2.8 million wedged between Belarus and the Baltic Russian exclave of Kaliningrad, is the second-highest in the European Union.
The anti-establishment mood has fueled the rise of an upstart party, the Dawn of Nemunas, whose leader is on trial for making antisemitic remarks in his criticism of Israel’s war in Gaza. The party came in third with 15% of the vote.
The Social Democrats have pledged to keep the Dawn of Nemunas under Remigijus Zemaitaitis out of potential coalition talks. But his party may still emerge as a kingmaker, further complicating the Social Democrats’ task as it cobbles together a majority in a fragmented parliament. A total of six parties entered the legislature.
A return to power for the Social Democrats could see Vilija Blinkeviciute, a former social affairs minister, take the premiership. Currently a lawmaker in the European Parliament, the 64-year-old is credited with raising pensions during her stint in government from 2000 to 2008.
Blinkeviciute said she sees her party building a ruling majority with two other center-left leaning partners of Union of Democrats “For Lithuania” and Lithuania’s Farmers and Greens. Still, the plans may be complicated by personal animosity between the leaders of the two junior parties that pledged not to work together ahead of the election.
The shift in the political landscape should become clearer after Lithuanians return to choose the remaining half of the country’s legislators in a second round of elections on Oct. 27.
“We still have serious work to do in the second round and we hope for a truly good result,” Blinkeviciute said on Monday. “We hope that after consolidating results in the second round it will be enough to form a coalition of three parties.”
The change of guard is unlikely to affect Lithuania’s position as one of the most vocal critics of Russia’s war in Ukraine. Parties generally agree that the country needs to increase defense spending, currently at 3.2% of economic output, to prevent Moscow from potentially challenging NATO borders.
Conflicting demands may leave the next government with some hard fiscal choices. Low pensions and limited coverage of social benefits have driven up poverty and income inequality, the European Commission said in a June report.
The Social Democrats in power could also strengthen President Gitanas Nauseda, who was elected for a second term earlier this year and has had frosty relations with the Homeland Union leader Lithuania’s Foreign Minister Gabrielius Landsbergis.
(Updates with a comment from the leader of Social Democrats in 8th paragraph.)
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