SERBIA: TADIC LAUNCHES COALITION NEGOTIATIONS

UNCLAS SECTION 01 OF 03 BELGRADE 000132

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL KDEM SR
SUBJECT: SERBIA: TADIC LAUNCHES COALITION NEGOTIATIONS


SUMMARY
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1. (SBU) Official consultations on the formation of a new
Serbian government began on January 29. Ironically, the
election returns proved most disappointing for the three
most likely partners in Serbia's next government--the DS,
DSS, and G17--while the Radicals, Socialists, and LDP are
generally satisfied with the outcome and content to sit in
opposition. DS officials warn that the parity in
parliamentary strength between DS on the one hand and DSS
and G17 Plus on the other provides no easy formula to form
a government, especially as all three will need to come to
agreement to secure a mathematical parliamentary majority.
Tadic has reassured DS officials that he will not make
undue concessions to Kostunica in the coalition talks as he
has done before. PM Kostunica has given little hint to his
advisers about his negotiating strategy for the coalition
talks, but he is expected to wait patiently for Tadic and
the DS to show their cards and to try to secure the post of
Prime Minister. G17 Plus chairman Mladjan Dinkic looks to
be the kingmaker. Kostunica's advisers privately, and SRS
leaders publicly, have categorically ruled out the
possibility of a DSS-SRS coalition. End Summary.

FINAL SEAT TALLY
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2. (SBU) President Boris Tadic launched official
consultations on the formation of a new Serbian government
on January 29 with meetings with SRS and his fellow DS
officials, which will be followed by meetings in the
ensuing two days with DSS, SPS, LDP, and minority party
leaders. With the Republican Election Commission's
certification last week of the official election results,
the clock has started ticking on the holding of the
constitutive session of the new parliament, which must be
scheduled no later than 24 February. The parliament's
opening session will then trigger a 90-day deadline for the
formation of a new government. The following is the
official seat distribution for the incoming parliament,
which is composed of a total of 250 deputy seats:

SRS 81 SVM (Hungarian) 3
DS 64 LZS (Bosniak) 2
DSS-NS 47 Presevo Albanians 1
G17 Plus 19 Union of Roma 1
SPS 16 Roma Party 1
LDP+ 15

RADICALS: RIGHT WHERE THEY WANT TO BE
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3. (SBU) Post sources indicate that Serbian Radical Party
(SRS) officials are more than satisfied with the election
outcome. The party not only was by far the highest vote-
getter, but also gained over 100,000 new supporters and,
perhaps most importantly, handily won the city of Belgrade,
unseating the Democratic Party (DS) as the most popular
party in Serbia's capital. The SRS's decisive showings in
both Belgrade and Novi Sad, Serbia's second biggest city,
give party officials reason for confidence as they look
ahead to local elections later this year.


4. (SBU) SRS acting leader Tomislav Nikolic publicly has
already made clear that the party has no chance to form a
government because it "has no coalition partner." This
statement reportedly reflects the party's intent to stay
safely on the political sidelines and allow DS and DSS to
shoulder responsibility for the Kosovo status outcome and
the hunt for Mladic. The Radicals appear to be counting on
a DS-DSS coalition to flounder over Kosovo and the two
parties' longstanding animosities, and thereby increase the
chances that new parliament elections will be scheduled and
that Nikolic or even popular Novi Sad mayor Maja Gojkovic
could defeat Tadic in presidential elections later this
year.

DISCONTENT AMONG DS OFFICIALS
--------------

5. (SBU) In contrast, the Democratic Party leadership is
quite disappointed with the election returns, even though
the party almost doubled the size of its electorate from
the 2003 parliamentary elections. Party officials are
particularly demoralized by their defeat in their
longstanding stronghold of Belgrade, perhaps most
dramatically demonstrated by the post-election resignation
of close Tadic adviser Dragan Djilas as chairman of the DS
Belgrade Committee. DS Vice-President Dragan Sutanovac told
Poloffs that he and other party leaders were counting on
winning over a million votes in the elections, which would
have given the DS a decisive advantage over the DSS and the
virtually indisputable right to head a DS-DSS government.
Instead, the parity in parliamentary strength between DS on
the one hand and DSS and G17 Plus on the other provides no

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easy formula to form a government, according to Sutanovac.
In fact, he warned that Serbia now is closer to repeat
elections than it is to a new governing coalition.


6. (SBU) Sutanovac (protect) blames in large part the DS's
undue concessions to Kostunica before and after October's
constitutional referendum for their failure to achieve
their electoral potential, and said that Tadic reassured
him and other members of the DS presidency that he will not
make the same mistake again. Sutanovac expressed concern
that DS voters will punish them severely if they accept
Kostunica as prime minister after the DS beat out the DSS
by a wide margin, especially if Kostunica then proceeds to
steer a DSS-DS government in the same direction as his
previous government. As a result, Sutanovac said that the
DS would not be very compromising in negotiations,
including on the joint goals, policies, and principles of
the new government.


7. (SBU) Sutanovac expected the DSS to deliver its
platform for the future government's policy on Kosovo some
time this week, and the DS would reject the platform if it
approximated the Radical Party's approach, such as a call
to suspend relations with any country that recognizes
Kosovo's independence. For its part, the DS plans to drive
a very hard bargain on the coalition's commitment to
arresting and extraditing Mladic and also on the control of
ministries like the Interior Ministry that will be decisive
in fulfilling the DS's election promises of signing an SAA,
getting Serbia on the EU's White Schengen List, and earning
EU candidacy status by 2008. (Note: Sutanovac is the most
likely DS candidate for the post of Interior Minister. End
note.) Sutanovac hastened to add, however, that the DS is
still undecided about their strategy and bottom lines for
coalition negotiations.

DSS FOCUSED ON SECURING PM POST FOR KOSTUNICA
--------------

8. (SBU) Officials of the Democratic Party of Serbia (DSS)
appear equally nonplussed. The DSS and its coalition
partners together will have 24 fewer deputy seats than they
had in the last parliament, and DSS itself will go from 53
to 33 seats. A member of the prime minister's cabinet told
Poloffs that the DSS leadership had expected to receive at
least 20 percent of the vote, rather than the under 17
percent support the party actually gained on election day,
and some officials had even deluded themselves into
believing the party would garner 25 percent and outpace the
DS.


9. (SBU) The prime minister's aide said that neither
Kostunica nor his chief of staff Aca Nikitovic has provided
other party officials any guidance or even clues about what
strategy or goals to pursue in coalition negotiations. He
said that he had never seen Kostunica project this much
uncertainty about what course of action to take in all of
the time that he had known him. The adviser expected
Kostunica to wait patiently for Tadic and the DS to show
their cards before making any serious moves in the
coalition talks. Nonetheless, he made clear that Kostunica
remains focused on retaining the prime ministership and
would also like to install a DSS official as foreign
minister (reportedly longtime Kostunica protege and current
Science and Environment Minister Aleksandar Popovic),while
everything else, including the Interior and Justice
Minister posts that many assume are coveted by DSS, is
negotiable. Kostunica, however, does not desire to keep the
premier post at all costs; two different officials in
Kostunica's cabinet have categorically ruled out to us the
possibility of DSS participating in a coalition with the
SRS.

G17: THE KINGMAKER WAITING IN THE WINGS
--------------

10. (SBU) G17 Plus Chairman Mladjan Dinkic told Ambassador
Polt that he also was disappointed with his party's
election returns. (Note: G17 won just under 7 percent,
after polling from the party's high-powered US consultant
Greenberg Research had indicated the party could gain as
much as 12 percent. End note.) The party after the
elections has played it coy, asserting that it is up to
Tadic and Kostunica to find a workable solution for the
government, even though most observers, including Dinkic's
deputy Ivana Dulic-Markovic, assume that Kostunica and
Dinkic have an understanding to support each other in
coalition talks. Dinkic hinted at this with the Ambassador,
stating that the DS deserved more positions in the
government as the top vote-getter from the "democratic
bloc," but that Kostunica would not accept a DS official at
the helm of both the government and the Presidency.


11. (SBU) In addition, before the elections, Dinkic

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categorically stated that he would not participate in any
government headed by his rival Bozidar Djelic, the DS's PM-
candidate, further underscoring the dilemma Tadic faces as
president deciding to whom he should give the mandate to
form a government. In any event, G17 Plus officials have
already shown that they will not underestimate their
bargaining leverage, announcing publicly that Dinkic should
be reappointed finance minister and that the party should
also be offered a deputy prime minister position
responsible for equitable regional development.

LDP AND SPS PREPARE FOR OPPOSITION
--------------

12. (SBU) The lists that crossed the 5 percent election
census with only a little room to spare--the Liberal
Democratic Party (LDP) coalition and the Socialists--do not
figure in most observers' calculations for a governing
coalition. DSS has ruled out participating in a government
with LDP (and vice-versa) because of their irreconcilable
stances on Kosovo and other issues, and both DS and G17
Plus have made clear that the SPS is an unacceptable
coalition partner. LDP officials, in fact, have told
Poloffs that they would prefer to sit in opposition, where
they expect to capitalize on DS voter disenchantment with
the party's cooperation with Kostunica in local and
Vojvodina provincial elections later this year and in the
next parliamentary elections. Nonetheless, LDP leader Ceda
Jovanovic reassured the Ambassador that he would support
Tadic and the DS in its pursuit of reformist goals, but
would sharply criticize and counter any deviation from
Serbia's Euro-Atlantic vocation, such as a completely
rejectionist approach to Kosovo's independence or a timid
approach to the arrest of war criminals.

COMMENT
--------------

13. (SBU) Ironically, the election results proved most
disappointing for the three most likely partners in
Serbia's next government, while the Radicals, Socialists,
and LDP are generally satisfied with the outcome and
content to sit in opposition. In a normal situation, the
common disappointment of DS, DSS, and G17 Plus would
provide ripe conditions for an early compromise on a
governing coalition. However, inside the DS, there is
considerable pressure on Tadic to exact a high price for
any kind of cohabitation with the DSS to avoid subsequent
punishment from its voters. As a result, Tadic may give a
first crack at forming a government to a DS official (most
probably Djelic, his PM-candidate during the campaign).
Kostunica will sit and wait as usual, and may be counting
on support from Dinkic to secure his coveted position as
prime minister.

POLT