SERBIA: DEMOCRATS CONFIDENT AS COALITION NEGOTIATIONS

UNCLAS SECTION 01 OF 02 BELGRADE 000533 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV PREL SR SUBJECT: SERBIA: DEMOCRATS CONFIDENT AS COALITION NEGOTIATIONS CONTINUE Ref: Belgrade 519 ¶1. (SBU) Summary: At the end of the third week of government coalition negotiations in Serbia, it appears that the Democratic Party (DS) is still on track form a democratic, pro-European government with the Socialists (SPS) and others. DS leaders appear to be moving forward with a plan to finalize a deal with the SPS once parliamentary mandates are confirmed June 5. The announcement of an inter-party coalition agreement for the city of Belgrade provided a PR boost to the radical-nationalist camp, but it was counterbalanced by rumors that key SPS coalition partner Dragan Markovic "Palma" would not play along. End summary. Dulic: We Remain Optimistic -------------- ¶2. (SBU) Speaker of Parliament Oliver Dulic (DS) told us on May 29 that he remained very optimistic that his party's "For a European Serbia" coalition would reach agreement with the SPS on a coalition government. Dulic explained that informal talks with SPS had long been underway, and would accelerate once parliamentary mandates were confirmed on June 5. At that point SPS leadership could be certain that its own parliamentary contingent was dominated by pro-European forces, and would have the latitude to wheel and deal. ¶3. (SBU) Dulic claimed that the top three leaders of the SPS -- Ivica Dacic, Zarko Obradovic, and Milutin Mrkonjic -- were now all in agreement on forming a coalition with the DS. Obradovic had been the "toughest" to convince. The three are now working to sway the 300 members of the party's Central Board. Dulic expected the board to meet in the coming days to take a final decision. ¶4. (SBU) One likely reason for Dulic's optimism is the rumor that United Serbia leader Dragan Markovic (aka "Palma"),a partner in the SPS electoral coalition, has withdrawn his support and favors a coalition with DS. Palma's absence from a widely-publicized May 29 meeting of PM Kostunica, SPS leader Dacic, Pensioners leader Jovan Krkobavic, and Serbian Radical Party (SRS) vice president Tomislav Nikolic was seen by many as proof. Dulic tacitly confirmed this development, predicting that the Pensioners would soon "join Palma" and thus prevent the formation of an SRS-DSS-SPS coalition at the national level. SRS-DSS-SPS Deal on Belgrade -------------- ¶5. (SBU) Dulic was unfazed by the May 28 announcement that the SRS, the Democratic Party of Serbia (DSS),and the SPS had reached an agreement on the formation of a coalition government for the city of Belgrade. He saw the announcement as part of SPS leader Dacic's "game" to demonstrate to his membership that he is playing both sides in order to get the best possible deal. Dulic was confident that a national-level DS-SPS agreement would include Belgrade as well, noting that acting Belgrade Mayor Zoran Alimpic (DS) could control the timeline of the formation of the new city government by delaying the first meeting of the city assembly. (Note: Later that day, Alimpic announced that the first session would be held July 14.) Dulic also raised the possibility that if Prime Minister Kostunica were to leave the DSS, a Belgrade-level coalition with them would also be possible due the history of good cooperation with DSS leaders such as Nenad Komatina and Aleksandar Popovic. Differing Approaches Within DS -------------- ¶6. (SBU) In a May 30 meeting, president of the DS Political Council Drajoljub Micunovic -- who at 78 is the eminence grise of the democratic movement -- hinted at disagreement within the DS regarding the negotiating strategy. A deal concluded too quickly would cost too much, he observed: giving SPS too many key positions would result in a government that would not function. He held out the possibility of new elections in October or November, predicting another strong DS showing based on the Vojvodina results (reftel). Comment -------------- ¶7. (SBU) There are critics within Tadic's coalition who believe he's flat footed and moving too slowly to form a democratic government. That may be the case, since the nationalist camp stole a march on Tadic with its Belgrade City coalition agreement. But if what Dulic and other DS leaders claim is true -- that Socialist leader Dacic has needed time to prepare his party for a jump from the nationalist to the pro-European camp -- then the slow pace of Tadic's government formation may yet prove to be a wise strategy. Most observers in Belgrade remain puzzled and many have simply tuned out of the ongoing soap-opera of government formation. We continue BELGRADE 00000533 002 OF 002 to believe that time is on Tadic's side, and that he may yet form a government at the republic level (and then even overturn the nationalist agreement in the city of Belgrade). We may have an indication on June 5. End comment. MUNTER