Serbian Leader Vows to Create Pro-European Cabinet at End of May

  • Premier Vucic's Progressives win nearly 50 percent of vote
  • Progressives pledge to reform economy after decades of delay

Serbian Prime Minister Aleksandar Vucic said his Progressive party would form a new pro-European government at the end of next month, capitalizing on a snap election victory that has handed him four more years in power.

Vucic’s party won 131 of parliament’s 250 seats, a smaller majority than it achieved two years ago. Before the vote, he pledged to form a coalition government to continue a painful economic overhaul endorsed by the International Monetary Fund. The Progressives will hold a congress on May 28, and “we expect that a new cabinet will be formed immediately after that,” the premier told reporters in Belgrade on Monday.

Bucking a trend of growing anti-EU sentiment in other eastern European states including Poland and Hungary, Vucic pledged to keep Serbia on a path to be prepared to join the bloc in 2020. The bespectacled 46-year-old, once a close ally of war-time leader Slobodan Milosevic, has vowed to end state support of unprofitable companies, shrink the public administration, and liberalize markets in the country of 7.2 million people.

“Vucic would prefer sharing the reform burden with other coalition partners,” Dan Bucsa, lead central and eastern Europe economist at UniCredit bank AG in London, said by e-mail. “Reforms may take a toll on the government’s popularity, but a four-year mandate is long enough to ensure that higher growth and a rebound in revenue would occur before the next parliamentary elections are held.”

Coalition Desired

The Progressives, who forced a ballot two years early for the second time since 2012, took 48.2 percent of Sunday’s vote, the Election Commission said in the capital, Belgrade, citing results with 97 percent of ballots counted. The Socialist Party, led by Foreign Minister Ivica Dacic, was second with 11 percent, or 29 seats in the assembly. The Progressives also overcame resurgent nationalists, including acquitted war-crimes suspect Vojislav Seselj, whose Radical Party was third with 8.1 percent, or 22 seats.

Four other parties also made it into parliament after 56.3 percent of voters cast ballots. Vucic hasn’t named a potential coalition partner, saying before the ballot only that he’d reject any party that wouldn’t agree to a pro-EU path. Potential candidates may include the Socialists, with whom he has shared power since 2012.

Dacic has embraced the prime minister’s European focus reluctantly and has favored stronger ties with Russia, which may encourage Vucic to turn to one of the smaller pro-EU groups or even poach lawmakers from rival voting coalitions.

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Almost two decades after the bloody wars that tore apart former Yugoslavia, Serbia is one of Europe’s last ex-communist nations to embark on a wide-scale overhaul of its economy, long after others including the Czech Republic and neighboring Hungary. Its living standards also lag those of richer EU states, including former Yugoslav partners Slovenia and Croatia, which joined the bloc in 2004 and 2013.

Vucic said his new government would stick with its $1.2 billion precautionary agreement with the IMF, and it would continue to rid the public balance sheet of more than 500 money-losing state-owned companies that sap as much as $1 billion from the budget a year. While the measures may trigger job losses, the IMF says they’re necessary to heal an economy suffering from unemployment that exceeds 18 percent and an average take-home wage of $407 a month.

“With a fresh mandate, painful policies will be easier for Vucic to implement,” Miha Hribernik, Senior Europe Analyst at Verisk Maplecroft, said by e-mail.“ Plans for privatizing Serbia’s bloated state-owned companies are likely to feature extensive restructuring and large scale redundancies.”

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