Lithuania PM candidate targets 2015 euro adoption

VILNIUS Mon Oct 29, 2012 3:58am EDT

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VILNIUS (Reuters) - Opposition parties planning to form Lithuania's next government back adopting the euro in 2015, the leading candidate for prime minister said on Monday, setting a less ambitious pace than the man he hopes to replace.

Algirdas Butkevicius spoke after a second-round election on Sunday left his Social Democratic Party, the Labour Party and the party of an impeached former president on a combined 78 seats in the 141-seat parliament.

"I think we will have the euro in 2015 ... I am optimistic," Algirdas Butkevicius told Reuters in an interview.

"I think they have the same opinion," he said of his putative planned coalition partners.

He added that he expected the country's relations with former imperial master Russia to improve.

The three parties combined beat Prime Minister Andrius Kubilius, who came second in a ballot that served as a referendum on the tough austerity programme he introduced.

Kubilius, who had backed adopting the euro in 2014, won plaudits abroad for cutbacks of the kind that euro zone states like Greece have reluctantly followed

But at home his popularity slid as wages fell and unemployment shot up.

The alliance headed by Butkevicius has said it would aim to increase the minimum wage, make the tax system fairer and boost investment, while also being fiscally responsible and stick to the outgoing government's budget deficit goals.

During campaigning, the three parties said Lithuania should not rush to adopt the single currency during the sovereign debt crisis.

Butkevicius said the would-be coalition partners backed entry in 2015, a date he had previously mentioned.

"We already effectively have the euro as our currency the litas is pegged to the euro," he said, referring to the litas's peg at 3.45 to the euro.

BETTER TIES WITH MOSCOW

Butkevicius said the new government would aim to use money from the European Union to create work and jobs as well as cut the use of gas, all of which is imported from Russia.

Gas has been a key source of irritation in relations between the two countries as Kubilius's government forcefully pursued a policy of energy independence.

That policy has involved suing Gazprom for what Lithuania says were unfairly high gas prices and decreasing the Russian energy firm's control of the sector.

"I think that relations between Lithuania and Russia will be better," Butkevicius said.

He also wanted to boost the former Soviet state's energy independence, but planned to have wide consultations with Moscow to make sure relations at government level improved.

"I think we have to create special government working groups from Lithuania and Russia to solve many problems," he said.

He said he backed the building of a new terminal to receive liquefied natural gas on Lithuania's western coast, aimed at competing with imports from Russia, but wanted some changes.

"We have to reduce the cost to the government in this project, using money from the private sector. I would like this project to be regional project, together with Latvia and Estonia and using money from the EU," he said.

(Reporting by Patrick Lannin; Editing by John Stonestreet)

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