Serbia: Karic/PSS Fading Fast -- Turn to

UNCLAS BELGRADE 000480

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV KDEM PREL SR
SUBJECT: Serbia: Karic/PSS Fading Fast -- Turn to
Nationalists



1. (U) Summary: Force of Serbia Movement (PSS) President
Bogoljub Karic has returned to his ultra-nationalist
roots in order to save his business empire, as Prime
Minister Kostunica remains steadfast against allowing him
to return to Serbia without being prosecuted. He is
gambling that a Socialist-Radical government will come to
power later this year and will reward him for his new
found piety. Although he still retains a large personal
fortune, his clout will continue to decline as long as he
remains in exile. End Summary.


2. (U) Zvonko Popovic, former member of the PSS
Presidency, told poloff that Karic has decided to reject
cooperation with democratic parties in favor of allying
with nationalist forces in Serbia [Embassy Comment: This
change of tone was evident at the PSS rally this week
following the Milosevic funeral. End Comment].
According to Popovic, Kostunica has sent Karic messages,
through RTS Chief Aleksander Tijanic and others, that he
would be arrested upon returning to Serbia and that the
ruling Democratic Party of Serbia would not enter into
any coalition that included the PSS.


3. (U) PSS poll numbers are in free fall, having dropped
by half (from 12-6 percent) since the beginning of the
year. With his democratic alternatives blocked off by
the GOS, Karic has decided to throw his support to non-
democratic parties in hopes that they will help him find
a way to return to Serbia. Popovic said that Karic
concluded that the switch was his only option for
rescuing his business empire, his family's fortunes, and
his political position. Popovic said that Karic has been
in Moscow and has been meeting with Mira Markovic, the
widow of Slobodan Milosevic. Partly as a result of these
discussions, Karic has decided to ally the PSS with the
Socialist Party of Serbia (SPS). Karic, a well-known
financier of the SPS in the past, financially supported
the Milosevic funeral on March 18 while his BK TV had
exclusive broadcasting rights for both the commemoration
in Belgrade and the Funeral in Pozarevac. Popovic added
that Karic could not reach out to the Serbian Radical
Party (SRS) right now, because of the ongoing struggle
between the two parties, but intends to slowly improve
relations with the SRS. According to Popovic, Karic has
forced out the remaining reformists in his party's
hierarchy and replaced them with his family members.


4. (U) Comment: Unable to successfully court the West
and legitimate democratic parties, Karic, as predicted,
has changed his image and allies to suit his needs. His
populism will now have a strident nationalist tone and
his party will be a decidedly family affair. While his
TV station continues to operate, we understand that it is
losing staff and may lose its broadcasting license during
the current tender process. His large cash reserves
outside of Serbia could conceivably allow him to buy his
way into the bankrupt SPS and use it for his own
political designs but it may be hard to pull this off
from Moscow.

POLT