Although the ruling coalition held less than half of the seats in Parliament by the middle of 2010, the government managed to survive thanks to cooperation with a small opposition faction. In May, a gay pride parade in Vilnius was allowed to proceed after an initial ban, but it sparked violent protests by counterdemonstrators.

Lithuania became independent at the end of World War I, but was annexed by the Soviet Union during World War II. The country declared its independence from the Soviet Union on March 11, 1990, and the move was eventually recognized by Soviet authorities in 1991. A multiparty political system was soon established, providing for competitive elections and frequent rotations of power over the next two decades. Lithuania joined NATO and the European Union (EU) in 2004.

Lithuanian politics have been characterized by shifting coalitions among several different parties, and in the run-up to the October 2008 parliamentary elections, the creation of new parties further fragmented the country’s political scene. The Homeland Union–Lithuanian Christian Democrats (TS-LKD), an alliance of right-wing parties, was formed in May, as was the National Resurrection Party (TPP). In the October balloting, the TS-LKD took the lead with 45 seats, followed by the Lithuanian Social Democratic Party (LSDP) with 25, the TPP with 16, Order and Justice (TT) with 15, the Liberal Union (LRLS) with 11, the Labor Party with 10, and the Liberal and Center Union (LCS) with 8 seats. Smaller parties and independent candidates won the remaining 11 seats. A four-party, center-right majority coalition was formed in late 2008, consisting of the TS-LKD, TPP, LRLS, and LCS. Andrius Kubilius of the TS-LKD, who had previously served as prime minister in 1999–2000, headed the new government. In May 2009, independent candidate Dalia Grybauskaitė was elected president with nearly 70 percent of the vote, becoming the first woman to hold the post.

A split in the TPP in mid-2009 resulted in some members of the party withdrawing from the ruling coalition, leaving it with 71 out of 141 seats as of early 2010. Additional defections in the first six months of the year reduced the ruling bloc to just 69 seats, forcing Kubilius to secure an informal alliance with the Lithuanian Peasant Popular Union (LVLS), which held three seats. Despite divisions within the ruling TS-LKD—mainly between original members and newer, more conservative members—on social and human rights issues, the fragile government managed to survive through the end of the year.

The economy in 2010 showed tentative signs of recovery from a deep recession, though by year’s end the unemployment rate was still 17.1 percent. Kubilius’s approval ratings declined as a result of fiscal austerity measures, including cuts to social spending and an unpopular mandatory health-care tax on the unemployed. However, unlike in 2009, when demonstrations escalated into violent riots, these measures did not prompt major protests.

Relations with Russia, which provided 100 percent of the country’s natural gas supplies, were strained throughout the year, as Lithuania expressed support for Georgia’s territorial integrity and denied backing for an EU visa-free travel regime for residents of Kaliningrad, a Russian exclave on Lithuania’s western border. In March, Russia’s state-owned energy giant, Gazprom, demanded $135 million in compensation from Lithuania for an allegedly broken 2003 contract, for which the Lithuanian government denied responsibility. In September, Kubilius announced that Lithuania planned to renationalize all gas pipelines in accordance with an EU directive, prompting Gazprom and Germany’s E.ON Ruhrgas, which co-owned the pipelines, to threaten a disruption of supplies. The country suffered from disruptions of up to 40 percent of gas supplies in 2010.