COALITION DEAL STRUCK; NO FORMAL WORD YET

UNCLAS SECTION 01 OF 02 BELGRADE 000643

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL SR
SUBJECT: COALITION DEAL STRUCK; NO FORMAL WORD YET



1. (sbu) Summary: Though there is still no official word, a deal
has been struck that will keep Kostunica at the helm of a weak
democratic coalition government. The deal and the politics
surrounding it have left a pall of fear in political circles and in
the population at large, as many saw the DSS's willingness to
legitimize the Radical Party as a signal of a return to the
Milosevic past. The Ambassador will call the leaders of the new
coalition to reinforce our expectations on ICTY, Kosovo, and
Euro-Atlantic integration. We recommend our leadership hold off on
calls to the new government until it proves its commitment to these
things. End summary.


2. (sbu) At around 1130 local time, first word began coming in
from contacts that DS and DSS had struck a deal to form a
government. The DS decision to deal despite DSS's decision to vote
the Radical Party into a controlling position in the parliament was
reportedly the result of a heated meeting of the DS presidency,
during which proponents of a deal complained of intense pressure
being put on them by European capitals and others. Following the
7-hour session, local press reported the morning of May 11 that
President Tadic had agreed to another round of meetings and had been
appointed sole negotiator by the DS presidency. The elements of the
deal are virtually identical to the last DSS proposal that came just
before DSS voted SRS into parliament, which had been carried in
local press. The key elements were retention of Interior by DSS and
some sort of power-sharing arrangement for the intelligence
service.


3. (sbu) The overall mood in the political classes has so far been
one of resigned frustration - in most camps, there is tremendous
anger over the brinksmanship that was evidenced by both sides and
the status-quo deal that was ultimately struck, alongside a feeling
that there was no choice but to cohabitate again with a party (DSS)
that few believe wants to take Serbia in a positive direction.
Anecdotally, the mood in the population is equally dour, a sort of
numb fear. There was genuine anger when Nikolic was elected in a
Milosevic-era debate, followed by fear that Serbia's leaders may be
taking them back to an isolationist past. EU enlargement
Commissioner Ollie Rehn probably said it best in comments May 11,
noting that "in two days Serbia went backward twenty years."


4. (sbu) Though not officially confirmed, the projected make-up of
the government will probably be:

DS (13 Ministries including DPM):
Deputy Prime Minister for European Integration
Foreign Affairs
Defense
Justice
Finance
Telecommunications
Culture
Agriculture
Diaspora
Science
Local Administration
Social Affairs
Ecology

DSS/NS (8 ministries including PM):
Prime Minister
Interior
Energy
Kosovo
Education
Trade
Religion
Infrastructure

G17 (4 ministries):
Economy
Health
Sports and Youth
Labor


5. (sbu) None of the names of proposed ministers have been
announced - in part, we are told, because DS (at least) has still
not made decisions about filling their posts. Some of the names
that appear fairly certain are: Kostunica as PM; Bozidar Djelic as
DPM; Dragan Sutanovac as MoD; Dragan Jocic as MININT; Aca Popovic as
Education Minister; Velimir Ilic (from DSS coalition partner Nova
Srbija) as Minister for Infrastructure; and Mladjan Dinkic for
Economy. Notably, FONMIN has not yet been decided - rumors include
presidential advisor Vuk Jeremic and current Serbian Ambassador to
the U.S. Ivan Vujacic.


6. (sbu) In addition to the deals on ministries, our contacts say
DS and DSS have made key compromises on security issues. Notably,
the current arrangement would reportedly have the Security
Intelligence Agency (BIA) run by a technical head not affiliated
with either party (a more cumbersome alternate rumor has BIA being

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run in tandem by DS and DSS officials serving consecutive 18-month
tours). The deal also includes the creation of a National Security
Council, reportedly headed by Tadic as President, the primary
function of which would be to serve as an intelligence coordination
body, overseeing and directing the activities of BIA, the Military
Security Agency (VBA),Military Intelligence Agency (VOA),and the
MFA intelligence department (SID).


7. (sbu) Other positions of interest: DSS will reportedly keep
control of the national public service broadcaster RTS (Aleksander
Tijanic); DS will reportedly receive the post of Speaker of
Parliament, and will keep the Chief of the General Staff as an
employee of MoD.


8. (sbu) SRS Deputy Leader Toma Nikolic, meanwhile, appears
suspiciously eager to yield his post and assist the transition. He
has already announced he will resign his post without debate as soon
as 126 MP's call for it (probably by signing on to a petition to
that effect),and has said he will hand over the reins to a deputy
speaker from DSS so as not to be accused of being obstructionist.
He also announced he will call a session of the parliament on
Saturday, May 12, to debate the proposal for a new government, and
another session will be called on Monday, May 14, to pass a Law on
the Government and confirm the new government. Belgrade is electric
with speculation about what other concessions SRS may have wrung out
of DSS to play such a passive role in this theater.


9. (sbu) The Ambassador will call Tadic, Kostunica, and Dinkic as
soon as the deal is officially confirmed. He will wish them well,
but will reiterate our expectations that this government outperform
the last government's poor track record on ICTY cooperation,
maintain a stronger commitment to Euro-Atlantic integration, and
play a more constructive role on securing a sustainable future for
Kosovo and the region.


10. (sbu) Given the distasteful way this coalition deal was
forced, notably Kostunica's legitimization of the SRS as a tool to
wring concessions from DS, we do not believe a call from the
Secretary or the President would send the right message. WE propose

SIPDIS
that such top level calls, if made at all, are better left for a
time when a new government has established a new track record.


POLT