A. Brazauskas Social Democratic coalition was formed in 2000 and unites three political parties: the Lithuanian Democratic Labour Party, the Lithuanian Social Democratic Party, the New Democracy and the Union of Russians of Lithuania. The coalition's platform was announced online at http://www.lsdp.lt.

The platform is rather comprehensive and exhaustive but it is riddled with inner contradictions. All policies focus on provision of government aid and an increase in social benefits but measures that would provide adequate financing for the said objectives are not clearly defined. There is a lack of confidence in the operation of market forces in such areas as social safety, education, culture, science, basic social insurance, law and order, and national defence. A regulated market is preferred in other spheres.

The main objectives of the platform

Privatisation. The Coalition plans to halt harmful, incompetent sales and to retain objects of social and industrial infrastructure (railways, airports, postal services, water supply, and energy) as well as educational, healthcare and cultural establishments under state control. Buyers of state property will be required to assume heavy social obligations regarding the preservation and creation of jobs, etc.

Investment policy. The Coalition plans to boost state investments and promote local and foreign "green" field investments.

Taxation. The principal position is not to increase the tax burden but to redistribute it. It is projected to introduce progressive income taxation and a real estate tax for individuals as well as to reduce value added tax to 9 percent for food products, children goods and utilities.

Monetary policy. The programme stipulates the restoration of classical central banking functions and regulation of interest rates.

Business conditions. Business regulations will be expanded and targeted at selected business categories with a view to expanding exports, small and medium sized enterprise, and regional policy. A reduction of licensing is planned.

Agricultural policy. Plans are to preserve all forms of support and assistance for agriculture, to allocate for agriculture a fixed share of the national budget - no less than 10 percent, to complete land restitution, and to remove restrictions applied to the purchase of land by Lithuanian citizens and legal entities.

Foreign policy. Equal priority will be given to three main objectives: integration into the European Union, membership in NATO and maintaining of friendly relations with the neighbouring countries.

Social safety. A whole range of social guarantees is envisaged. Income from privatisation is to be used to promote the establishment of fully funded pension funds.

Forecasts and implications

The implementation of the proposed policies will result in a budget deficit, which may force down the country's international credit rating. There is much likelihood that state debt will mount, which will also have negative effect on the country's credit rating. The state will become a strong competitor by investing in manufacturing and social infrastructure as well as the most progressive industrial sectors. The privatisation process will slow down, and priority will be given to local capital and foreign "green" field investments. Items of strategic infrastructure will be excluded from privatisation. Revision of privatisation deals may be initiated. Progressive taxes for individuals will be imposed, enterprises will take on an increased share of the tax burden, and a real estate tax will be introduced. The overall tax burden will be increased. The influence of the central bank will be enhanced. Interest rates are likely to be regulated, which may touch off a shortage of credit recourses. It is also likely that soft crediting of state institutions and investments will be used. The declared socially oriented budget expenditures will result in an eclectic and arbitrary redistribution of budget revenues in favour of commercial units. Restrictions imposed on the purchase of by foreign citizens will not be eliminated.