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2006-02-21 09:25:00
Embassy Belgrade
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						C O N F I D E N T I A L SECTION 01 OF 03 BELGRADE 000257 


E.O. 12958: DECL: 02/21/2016

REF: A) 05 BELGRADE 2343 B) 05 BELGRADE 2341 C) 05


Classified By: Classified by POLOFF Michael Papp for reasons 1.4 (B&D)




E.O. 12958: DECL: 02/21/2016

REF: A) 05 BELGRADE 2343 B) 05 BELGRADE 2341 C) 05


Classified By: Classified by POLOFF Michael Papp for reasons 1.4 (B&D)


1. (SBU) Recent polls indicate that Serbia's anti-Western
nationalists are within striking distance of capturing a
parliamentary majority in new elections. Potentially
traumatic issues later this year, such as Kosovo final
status, could strengthen their hand even further. Early
elections, perhaps linked to a Serb rejection of a Kosovo
final status settlement, are a distinct possibility.
Although they are under threat, it is by no means a certainty
that the democrats will be ousted -- especially if they
(including Tadic and Kostunica) work jointly against the
Radicals. For our part, we will continue to work closely
with reform forces in Serbia. Progress on issues related to
Serb interests in Kosovo (e.g., decentralization, religious
sites, etc.), combined with a Euro-Atlantic embrace of Serbia
if it follows a constructive course, could also help mitigate
the erosion of support for the democratic forces. End

New Elections: Kostunica Will Decide

2. (SBU) Prime Minister Kostunica's fragile minority
government continues its precarious existence amidst
increasing talk of early elections sometime this year. Polls
show that only 18 percent of Serbs support the government
while 70 percent lack trust in their government. A majority
favors new elections (see reftel d). All of the governing
parties have weakened substantially since the last
parliamentary elections were held; according to recent polls,
Kostunica's DSS is the sole governing party that would today
cross the minimum 5 percent threshold for re-election to
parliament. The government continues to rely on the support
of Slobodan Milosevic's divided Socialist Party of Serbia
(SPS) for its tenuous 3-seat majority. Polls showing rising
abstention rates among democratically-inclinded voters also
indicate strengthened support for the nationalist/Radical
bloc. Additionally, DS Vice President Dusan Petrovic told
poloff that the Prime Minsiter had to postpone an
extraordinary session of parli
ament, originally planned for
February 16, because he had to re-secure a majority in

3. (SBU) There is considerable speculation here about the
viability of the SPS and about Kostunica's relationship with
the Radicals. Milosevic in many ways has undermined the SPS
by using his still considerable influence in sole pursuit of
providing safety and security for his family, preventing any
serious house-cleaning. The assumption is that the SRS could
easily induce SPS MPs to abandon Kostunica and bring down the
government. Our sources suggest, however, that the Radicals
will wait until the Kosovo talks heat up before trying to
force elections. Many observers have noted that Prime
Minister Kostunica has made a tacit agreement with the
Radicals to keep the GOS in power until it deems the time is
ripe for elections. (Comment: Other observers here discount
the possibility that Kostunica could team up with the
Radicals. End Comment)

4. (SBU) Numbers are also shifting on the democratic side,
with Tadic's DS currengly polling about 18% (compared to 36%
for the SRS). DS's willingness to allow Karic's PSS to bring
down the government by "buying" M.P.s from the ruling
coalition has been set back with the government's aggressive
effort to crush Karic. (Karic has fled the country with his
three brothers - septel). Petrovic told poloff that the Karic
card may still work. He speculated that Karic, desperate to
halt legal action against him, is offering large sums of
money to any MP who will break with the GOS.

5. (SBU) Despite his party's generally gloomy numbers,
Kostunica and his DSS are making the best of the situation.
While the DS continues to focus on its upcoming Party
Congress and play hardball in its negotiations with smaller
democratic parties on possible future coalition arrangments,
the DSS has been working to consolidate its ties with its
coalition partners through the use of government hand-outs
and other means. A good part of FM Draskovic's Serbian
Renewal Movement (SPO), some of G-17 , and Capital Investment
Minister Ilic's populist New Serbia Party (NS) are considered
to be strongly in the DSS camp. None of the DSS' coalition
partners has a strong incentive to leave government, since
their dismal poll numbers threaten them with extinction in
new elections (absent some sort of pre-electoral coalition.)

Polls Suggest Tight Race

5. (U) A January 2006 Medium-Gallup poll -- reflecting
rising abstention rates and Karic's travails -- indicted that
the Radicals and Socialists are in striking distance of a
parliamentary majority in new elections. While all parties,
including the SRS, are losing supporters, the poll suggests
that Radicals are losing them at a much slower rate, helping
their overall relative numbers. Together, the Radicals and
Socialists would currently poll 43.7 percent while the
Democratic bloc (DS, DSS, NS, G-17 , SPO, LDS), excluding
Karic's PSS, comes in at 44.9%. Minority parties come in
around 4-6 percent and would likely join the democrats.
However, most experts agree that the largest part of Karic
voters would likely go to the SRS or the Socialists, with a
smaller number dropping out or joining the DSS or the NS.

6. (SBU) Factoring in everything, the Gallup poll showed the
Radical/Socialist block just two seats shy of a governing
majority if elections had been held in January. (An even
more recent IRI-commissioned poll puts the SRS/SPS coalition
at 3 seats short of a majority.) Moreover, significant
numbers of DSS and PSS voters claim in recent polls that the
Radicals would be their first preference as a coalition
partner. The Gallup polls also suggest that another 3-5
percent of voters say they would change their vote to the
Radicals in the event of the loss of Kosovo.

7. (U) The numbers, do not however, factor in an aggressive
get-out-the-vote (GOTV) campaign, which could strengthen
results on the democratic side. In short, early elections
would be very close and difficult to call.

Divided and Directionless: The Democratic Parties
-------------- --------------

8. (SBU) The constant bickering between democratic parties
in the GOS and opposition will certainly not help.
Kostunica's decision to use the state apparatus to attack the
supporters and financial network around Karic and his PSS has
helped protect his government against attack in the short
term, but possibly at the expense of strengthening the
anti-democratic bloc. The ferocity of the GOS campaign
against Karic, notwithstanding the veracity of charges of
corruption against him and his business empire, will make it
difficult for Kostunica to attract significant numbers of PSS
voters and could help drive them to the Radicals' camp (or
into abstention).

9. (SBU) President Tadic's DS also has not been able to
generate new enthusiasm among disillusioned voters, and polls
show that its support continues to erode (see ref c).
Petrovic indicated to poloff that the party has made little
progress on establishing a platform that would widen the DS'
support base, is uncertain how to utilize Tadic's position
and relative popularity, has not identified a publicly
acceptable rationale for ending their parliamentary walkout,
and lacks a strategy to balance its opposition to Kostunica's
government and its plan to ally with the DSS and its partners
to form a new government in the event of early elections. A
senior advisor to Tadic told us 2/17 that the DS is convinced
nonetheless that the SPS/SRS bloc is incapable of winning a
majority in future elections.

Steps We Can Take

9. (U) Our efforts will focus on reducing the risk of
political instability by developing more inclusive political
structures and helping reformist elements attract back their
old supporters. In the short term, that means working
closely with the DS, DSS and others to refine their messages
and improve their party operations in order to better reach
out to disaffected voters. We will also seek to increase
public engagements on democratically-oriented topics, such as
corruption and economic reforms, key issues that Serbs
actually care about, and use NDI and IRI to build stronger
and more productive ties within the democratic bloc.
Additionally, the democratic parties will have to carefully
analyze a proposal to lower the parliamentary threshold to
three percent, which could significantly reduce the SRS'
chances of controlling the next government.

10. (U) Approximately $1.4 million of our SEED funding has
been allocated in FY06 for this program, with an estimated
total four-year budget of approximately $6 million. To
support this program, USAID will work in the following three
related areas: developing parliamentary coalitions on
specific issues and strengthening local government coalitions
that will help at the national level; strengthening party
caucuses between the parliament and the government; and
working with democratic opposition parties on enhancing their
role in parliament. Finally, we have prepared an aggressive
and targeted GOTV campaign that draws on our successes in the
last Presidential and local elections.


11. (SBU) Polls repeatedly indicate profound public
frustration with politicians, especially the democrats who
have been running Serbia since Milosevic's ouster over 5
years ago. Nor is democracy as a concept deeply-rooted --
according to a poll that appeared earlier in February, at
least 51 percent of the respondents believe that it is more
important to have a capable leader than a parliamentary
system, and only 23 percent are opposed to having a strong,
single ruler. Additionally, the five most popular (or in
this case, least unpopular) figures in Serbia are indicted
war criminals Mladic, Seselj, and Karadzic, followed by the
leaders of the SRS, Nikolic and Vucic. In a year that will
see outcomes on highly emotional issues like Kosovo, we
cannot exclude the possibility of a Radical/Socialist bloc
taking power.

12. (C) This is not a foregone conclusion, however. If the
democratic parties could put aside their differences and work
together, they could conceivably weather this tough year and
beyond -- potentially even without early elections. The DS
would need to be brought into the tent for this to work.

13. (C) Post will work to coordinate and assist democratic
parties and NGOs in order to shore up societal support for
democratic parties, market-oriented reforms, and Western
integration. Kosovo-related developments could also have a
measurable impact on domestic Serbian politics. Demonstrable
progress on decentralization in Kosovo, protection of Serbian
religious sites, and other "Serb issues" could give the
savvier democrats advantages they could exploit. In
addition, a warm embrace of Serbia by the international
community in response to a constructive Belgrade approach on
Kosovo would also be helpful to the democrats.