UPDATE 2-Simonyte, Nauseda expect to top Lithuania presidential vote, face each other in runoff

Pre-election favourites Ingrida Simonyte and Gitanas Nauseda told Reuters on Sunday they expected to go through to the second round of Lithuania's presidential election, while Prime Minister Saulius Skvernelis said it was unlikely he would make it to the runoff. Lithuanians voted in large numbers on Sunday in the contest to succeed outgoing President Dalia Grybauskaite, the Baltic nation's "Iron Lady," who was one of the European Union's most outspoken critics of Russia.

Simonyte, 44, a former finance minister in a centre-right government, and Nauseda, 54, a former senior economist at a top bank, would face off in a May 26 runoff. "I think I will have about 30 to 31 percent support and my guess is that the second round is most likely for Ms. Simonyte and me," Nauseda said. Simonyte said she also expected to reach the second round.

Skvernelis, 48, who said before the election he would resign as prime minister if he failed to reach the runoff, said it looked like he had received too few votes. "Tonight it's unlikely," Skvernelis told a live TV3 broadcast.

Official results were expected early on Monday. Still very popular, Grybauskaite, 63, is not eligible to run after two terms. The top three candidates vying to replace her have pledged to maintain a tough stance against Vilnius' former Soviet master, as well as hefty military spending.

Five years after Moscow's annexation of Crimea from Ukraine that sparked fears of further Russian aggression across Eastern Europe, the election campaign in Lithuania was dominated by voter anger over economic inequality and corruption. The three main candidates all vowed to advocate for increased state spending on social issues, a sore point for many in Lithuania where nearly a third of the population could be at risk of poverty or social exclusion.

Income inequality is among of the highest in the European Union, second only to Bulgaria. Lithuania's president has a semi-executive role with a say in the appointment of officials such as judges, the chief prosecutor and head of the central bank. The president can veto laws, and in tandem with the government, sets foreign and security policy.

"What we need most is creation of jobs to retain people in Lithuania, to keep many from emigrating," Mindaugas Milciunas told Reuters in a voting district in Vilnius. "Because then, we would no longer lack qualified specialists, as we do now." Both Nauseda and Simonyte say tax income should be raised to fund more state spending, although Skvernelis has introduced a tax cut as a signature policy of his government.

"I try to appeal to people by saying, look, there are no simple answers, and there are many headwinds," Simonyte, the finance minister when the government cut public-sector wages and pensions in 2009 as a state default loomed, told Reuters. "It's complicated for a single party to take leadership (on state finances) because it knows it will be criticized by others for unpopular decisions. A president can show leadership and settle the debates," she said.

Nauseda, a household name from his role as an economic commentator, said in an interview he would use the president's position to help business expand in emerging markets, especially China and ask the government to increase revenues and better fund social services, such as pensions. "Retirement is leading to poverty, because pensions are obviously too low," Nauseda said in a recent debate, adding he wanted the budget for pensions to be raised to 10% of gross domestic product from 6.8%.

(Reporting by Andrius Sytas; Writing by Johan Ahlander; Editing by Raissa Kasolowsky and Peter Cooney)

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