SERBIA: NEW PROGRESSIVE PARTY'S POLICY PLATFORM AND PLANS

UNCLAS SECTION 01 OF 02 BELGRADE 001326 SENSITIVE SIPDIS E.O.12958: N/A TAGS: PGOV PREL ECON EINV SR SUBJECT: SERBIA: NEW PROGRESSIVE PARTY'S POLICY PLATFORM AND PLANS REF: A) BELGRADE 1243, B) BELGRADE 1302 BELGRADE 00001326 001.3 OF 002 Summary -------------- ¶1. (SBU) The Serbian Progressive Party (SNS),led by ex-Radicals Tomislav Nikolic and Aleksandar Vucic, has recently advocated a more active role of the government in the economy coupled with a shift away from focusing on macroeconomic fundamentals. Despite rampant speculation to the contrary, SNS leadership tells us that they aim to remain an opposition party and that their delicate position in the center will limit their public support of European integration legislation in Parliament. In the wake of Vucic's recent visit to Croatia, the SNS has no plans to seek financial assistance for Serbs remaining in the Krajina region of Croatia. SNS contacts lead us to believe the party supports Kosovo partition. End Summary. SNS Economic Priorities Come Into Focus -------------- ¶2. (SBU) In a November 19 meeting, Jorgovanka Tabakovic, the most prominent economic voice in the SNS, outlined for us the party's views on economic issues. Her comments tracked closely with press reports of her December 16 meeting with Prime Minister Cvetkovic to discuss the economic crisis. Tabakovic strongly criticized the current tight monetary policy (strong dinar/low inflation) and claimed that the overvalued dinar hurt the Serbian economy. She claimed that with responsible monetary policy Serbia would have no need for the IMF and that the Central Bank should target improved living standards rather than inflation. ¶3. (SBU) Tabakovic advocated a more protectionist trade policy and said that Serbia should not unilaterally implement the Interim Trade Agreement with the EU because it would cut Serbian government revenue. She said that introducing quotas or some administrative restrictions on trade would be a positive step. Tabakovic pointed to the "good example" of U.S. quotas on vehicle imports from Japan in the 1980s as the kind of measure that could be effective for Serbia. Tabakovic claimed that the liberalization of Serbian trade was a mistake. SNS wanted to establish a domestic development bank (like Germany's KfW) which would finance Serbian exports and economic development projects in Serbia. SNS Claims It Plans to Remain in Opposition -------------- ¶4. (SBU) Despite rampant speculation (reftel) that the SNS will replace coalition partner G17 Plus in the government, SNS leadership unequivocally told us that the rumors had no foundation. Speaking to Poloff on December 11, SNS presidency member Nebojsa Stefanovic said that the SNS would remain in opposition until new elections were held. Stefanovic argued that being in the opposition was beneficial for sharpening policy ideas and party organization and pointed to examples in U.S., British, and German politics. He claimed that the SNS was attracting mid-level DSS and DS party officials as new members. He added on December 17 that SNS membership levels would likely level off for the next year or so, as most of those from the SRS who wanted to switch had already done so; the party would now focus on attracting members who were not in a party, a process that would be slow. Limited Support for EU Legislation, Krajina Serbs -------------- --- ¶5. (SBU) Due to the difficulties of attracting followers from conservative and liberal parties, Stefanovic said that the SNS's balancing act would preclude reliable support in Parliament for upcoming European integration legislation, including the judicial reform package and measures needed to join the Schengen White List. (Comment: The SNS's decision to temporarily leave the chamber enabled Parliament on December 22 to pass controversial elements of the judicial reform package with only 123 votes. End Comment.) While Nikolic and Vucic would continue to publicly support EU membership for Serbia, Stefanovic said, they would only consider supporting such legislation on a "case by case basis." Giving a blank check for the legislation, Stefanovic said, would taint the SNS as "DS collaborators" and "seriously erode" the SNS's political base. Stefanovic said that he expected President Tadic to call new elections in the next several months because current DS efforts to reach accommodation with the SRS would fail. ¶6. (SBU) Stefanovic traveled with Vucic to Croatia from December 8-10, in a widely-publicized trip to visit "endangered" Serbs in the Krajina region of Croatia. Despite the party leadership's concern for Krajina Serbs, Stefanovic said, the SNS would not seek funding from the Serbian government because the time was not right to "turn BELGRADE 00001326 002.2 OF 002 the knife in the Serbian government" on this issue. Stefanovic suggested to us the U.S. could earn enormous goodwill by rebuilding a handful of Serb homes in the Krajina while tacitly supporting the de facto partition of Kosovo. With Kostunica-esque language, Stefanovic described Kosovo partition as the only realistic solution because "every Serb prays each night asking 'let there be Kosovo partition.'" (The SNS party platform does not explicitly advocate partition, instead referring to Kosovo as Serbian territory that Serbia would defend without compromise.) Comment -------------- ¶7. (SBU) The SNS does not have a clearly defined economic platform, but the policies that Tabakovic advocates reflect her socialist roots as a minister in the Milosevic government. Beneath the veneer of support for progress toward Europe, the SNS's economic agenda is one that looks backward to socialist and protectionist measures. Similarly, the SNS currently intends to play the role of opposition without actively turning its pro-European rhetoric into policy reality. The SNS continues to poll second to the DS in recent polls, making it unnecessary for the party to articulate any particular position. The party will continue to draw its primary support from Serbia's "losers," as Vucic and Nikolic continue to stoke feelings of alienation with the luxury of not having to develop practical alternatives. End Comment. MUNTER