Ex-Milosevic Ally Vucic Wins New Majority in Serb Snap Election

  • Premier Vucic's Progressives win 49 percent, monitors say
  • Progressives pledge to reform economy after decades of delay

Serbian Prime Minister Aleksandar Vucic’s Progressive Party won a majority in parliament in snap elections on Sunday, securing a new four-year term to overhaul the economy and lead the country closer to the European Union.

The Progressives, who forced a ballot two years early for the second time since 2012, took 48.6 percent of the vote, enough to secure a majority in the 250-seat parliament, an independent election monitor said, citing 50 percent of ballots counted. The Socialist Party, led by Foreign Minister Ivica Dacic, was second with 11.2 percent, and the ultranationalist Radical Party, led by acquitted war-crimes suspect Vojislav Seselj, was third with 8 percent, IPSOS Strategic Marketing said. IPSOS, which conducted a parallel tally with the Election Commission, said four more parties made it into the assembly.

The prime minister has pledged to continue an economic overhaul endorsed by the International Monetary Fund to end state support of unprofitable companies, shrink the public administration, and liberalize markets in the country of 7.2 million people. With his party’s result close to the 48.8 percent it won in 2014, Vucic overcame resurgent nationalist candidates, including Seselj, who advocated shunning the EU and boosting ties with Russia. He also defeated other parties who want to halt an austerity drive.

Aleksandar Vucic during a political rally on April 21.

Photographer: Oliver Bunic/Bloomberg

“Serbia will continue it’s European path,” Vucic said after declaring victory at his party’s headquarters in Belgrade. “We’ll try to accelerate it, but we will also maintain our traditional ties with Russia and China, and of course the United States.”

The election victory gives Vucic, 46, a chance to implement reforms that will probably hurt his popularity in the short term but that the IMF sees necessary to eventually create jobs and improve living standards.

One of Europe’s poorest countries, Serbia has an unemployment rate exceeding 18 percent, and its average take-home wage is $407 a month. Vucic also wants to prepare Serbia for EU entry by 2020 to follow former Yugoslav partners Slovenia and Croatia, which joined in 2004 and 2013.

Opposition leaders complained of voting irregularities, with Sasa Radulovic, the leader of the Enough is Enough party, saying it would check every ballot. Critics of Vucic have complained that his consolidation of power, while bringing some economic change, is threatening democracy. His detractors say he has suppressed media, while the EU’s executive commission, in a report last year, said Serbia had made no progress in improving freedom of expression and hadn’t addressed recommendations to ensure campaign finances and electoral processes are transparent.

Vucic has said he will form a coalition even if he wins an outright majority, as he did in the 2014 elections, to have broader support for his reform agenda.

“The new government will have to accelerate reforms after elections, since the program stalled this year,” said Dan Bucsa, an analyst at UniCredit Bank AG in London. “This contrasts with last year, when the fiscal adjustment -- benefiting also from some low-hanging fruit -- was impressive.”

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Serbian bonds have benefited under Vucic who, under a three-year IMF deal, has cut public wages and pensions and almost halved the budget deficit to 3.7 percent of gross domestic product last year. The yield on Serbian dollar bonds maturing in 2021 traded at 4.525 percent in Belgrade on Friday, compared with 5.593 percent before Vucic’s March 2014 election victory. The dinar, which has weakened over the same period from 116.012 per euro, traded little changed at 122.858.

Winning Gamble

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 made the switch to a market-based approach. With purchasing power at 37 percent of the EU average in 2014, the country has promised the IMF 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.

Vucic gambled the 158 seats he controlled in the 250-seat parliament before the vote at a time when 42 percent of Serbs believe their country is heading in the wrong direction. That was more than the 38 percent who think it’s on a positive path, according to a poll this month from the Center for free Elections and Democracy.

Vucic said his new government will stick with with its $1.2 billion IMF precautionary agreement and restructuring state companies.

“Then, Serbia will be on the right path,” he said.

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