Bloomberg News

Serbian Voters Go to Polls Amid EU-Inspired Austerity Anger

May 06, 2012

Opposition Serbian Progressive Party leader Tomislav Nikolic, seen here, addressing members of the media in front of a polling station in Belgrade, said "Europe is our goal if they want us." Photographer: Andrej Isakovic/AFP/Getty Images

Opposition Serbian Progressive Party leader Tomislav Nikolic, seen here, addressing members of the media in front of a polling station in Belgrade, said "Europe is our goal if they want us." Photographer: Andrej Isakovic/AFP/Getty Images

Serbian voters went to the polls to choose between a further march toward the European Union and fiscal austerity or economic and political ties to the east.

More than 8,000 polling stations opened at 7 a.m. in Belgrade in parliamentary, presidential and local elections that pit the ruling Democratic Party led by President Boris Tadic, who is seeking a third term, against the opposition Serbian Progressive Party, led by Tomislav Nikolic. Both men probably will face off in a May 20 presidential runoff, while general election results will begin to be counted tonight.

As governments from Ireland to Italy fall in a wave of anger over austerity, Tadic’s strategy to link a presidential vote to general elections to help his party, may have fizzled. Voters are drawn to nationalist rhetoric about Serbia’s claim on Kosovo two decades after Yugoslavia began its collapse, accuse Tadic of ceding sovereignty to the EU and call for more spending to ease unemployment of 24 percent.

“The results of Serbia’s ‘big bang’ election day will be crucial for shaping future policy on EU membership, Kosovo, IMF austerity and other vital issues facing the country,” said Joan Hoey, a London-based senior analyst in the Eastern Europe team of the Economist Intelligence Unit.

Early Turnout

By 7 p.m., 53.6 percent of voters cast ballots, said Marko Blagojevic, the program director of the Center for Free Elections and Democracy, which traditionally monitors elections in Serbia, told a news conference in Belgrade tonight.

The past four years have coincided with the global economic and European debt crises. The dinar has lost 30 percent, unemployment rose 10 percentage points, public debt increased 16 percentage points to 14.4 billion euros and the average take- home wage is now 360 euros ($476) per month.

In a nation where fewer than one in four of its 7.2 million inhabitants have formal employment, job prospects, higher wages and the fight against corruption are likely to be a bigger factor for voters than future EU membership, said analysts including Milan Nikolic, the director of the Belgrade-based Centre for Policy Studies.

While Tadic and his party “have concrete results,” Nikolic said, the Progressives “are banking on anger and discontent resulting from lost jobs, benefits and declining wages.”

Balkan, European Security

The Serbian election outcome is “important for the future of the whole region and for stability in Europe,” Tadic told reporters after casting his ballot in central Belgrade.

His political opponent, Nikolic, said “Europe is our goal if they want us.”

Serbia became a candidate for EU membership on March 1 after fulfilling a series of conditions, including the capture and transfer of Radovan Karadzic, Ratko Mladic and Goran Hadzic, the three most-wanted war-crimes suspects from the civil wars that accompanied the breakup of the former Yugoslavia, to the Hague-based International Criminal Tribunal for the Former Yugoslavia.

The Democrats would garner 25.1 percent, compared with 24 percent for the Progressive Party, according to a phone survey of 1,400 respondents conducted by Partner Consulting pollster on April 24-28. The poll, for which the margin of error was not disclosed, also showed the Socialist Party, once led by former strongman Slobodan Milosevic, rated third with 11.4 percent.

Other Party Support

Other parties expected to cross the 5 percent threshold for the 250-seat legislature include the Liberal Democratic Party of Cedomir Jovanovic, with an expected 9.4 percent backing; the ultranationalist Serbian Radical Party, led by Vojislav Seselj, with 8.4 percent; the United Regions of Serbia of the former deputy prime minister Mladjan Dinkic, with 6.7 percent; and the nationalist-conservative Democratic Party of Serbia of former prime minister Vojislav Kostunica, backed by 6.2 percent.

A total of 18 political groups, including six representing ethnic minorities, are competing for Parliament.

The Democratic Party’s “credibility has been battered by the economic downturn and undermined by popular perceptions of increased corruption under its rule,” Hoey said in e-mailed comments. At the same time, the Progressives have “done little to project a positive alternative to the ruling coalition” with “little distinctive to say on domestic or foreign policies.”

Socialist Key

Nikolic said his aim is to get a majority in Parliament with more than 126 lawmakers. If not, Serbia will “go to polls in a few months again,” he said.

The makeup of the new government may be in the hands of Milosevic’s Socialists, whose leader Ivica Dacic is also running for president, Hoey said.

“So many options are open in forming the future Cabinet that the winner may be the group most flexible about partnerships,” said Miroslav Sutic, the director of pollster Partner Consulting, in a May 4 phone interview. “The Democrats seem to have more room to maneuver.”

Whichever path voters choose, there will be no quick fix to expanding unemployment, the main source of popular discontent after the jobless rate reached 24.4 percent at the end of 2011. The government will need to mix a leaner budget with more public investment to jump-start the economy, which contracted by 1.3 percent in the first three months of the year.

More Investments

“Austerity is a priority and it should be combined with more public investments now that the private sector is on the verge of collapse,” said Ivan Nikolic, an analyst at the Belgrade-based Economics Institute. The government will need to initially turn to “major public works and big infrastructure projects” to halt a further rise in unemployment before creating new jobs.

The Cabinet emerging from today’s polls will need to revise the budget and reduce the fiscal deficit to 4.25 percent of economic output, convincing the International Monetary Fund of its commitment to maintaining macroeconomic stability. Measures to curb the gap will help the central bank stop spending foreign-currency reserves on supporting the dinar, which has weakened 10 percent on year to the lowest in a decade.

To contact the reporters on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net; Misha Savic in Belgrade at msavic2@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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