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Lithuania PM criticises opposition budget plans, faces defeat

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VILNIUS, Oct 11 (Reuters) - Lithuanian Prime MinisterAndrius Kubilius hit out at centre-left opposition budget planson Thursday, warning of danger to fiscal stability.

He spoke ahead of a parliamentary election on Sunday, whichhe is likely to lose and which is expected to lead to agovernment formed under the centre-left Social Democrats.

"You need to understand very clearly that financialstability will require more unpopular decisions. There is littleroom for significant changes in revenue and spending," Kubiliustold a news conference.

"But certain parties have points in their programmes, andtheir leaders speak of them in debates, which ... would meanthat financial stability is not adhered to," he added.

He said opposition parties had raised the idea of increasingrebates on value added tax for some goods and services.

The Social Democrats have proposed raising the minimum wageand introducing a progressive income tax in a country that cutspending and raised taxes after the 2008 global crisis.

But they also say they will adhere to a strict budget policyand keep to European Union rules on budget deficits, which set alimit for the fiscal gap of three percent of output.

Lithuania had falling wages and living standards and a 15percent drop in output in 2009. Some growth has returned, butthousands have emigrated and it is one of the poorest EU states.

An opinion poll by survey group Sprinter for news portalDelfi showed the Social Democrats remaining the most popularparty ahead of the first round of an election on Sunday.

The poll put the Social Democrats, led by former financeminister Algirdas Butkevicius at 16.9 percent, followed by theLabour Party, led by a Russian-born businessman, at 15.8.

Kubilius' Homeland Union polled at 7.9 percent.

The election is likely to influence when Lithuania seeks toadopt the euro. Kubilius has said 2014 would be realistic, butButkevicius told Reuters he is aiming for 2015.

Lithuania has two voting rounds: on Sunday half the seatsare decided on a proportional representation basis, with therest decided two weeks later in district runoffs.

(Reporting by Andrius Sytas, writing by Aleks Tapinsh; editingby Ron Askew)

((aleks.tapinsh@thomsonreuters.com +371 27 78 36 50))

Keywords: LITHUANIA/

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