VZCZCXRO5809
PP RUEHAST
DE RUEHBW #1157/01 2010611
ZNR UUUUU ZZH
P 200611Z JUL 06
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC PRIORITY 9032
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 BELGRADE 001157 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM PREL SR
SUBJECT: Elections Timetable Speculations 
 
 
BELGRADE 00001157  001.2 OF 002 
 
 
¶1.  (SBU) SUMMARY:  Despite previous pronouncements suggesting fall 
elections, many of our interlocutors believe that the current 
coalition will hold together until after a decision is made 
regarding Kosovo's final status, with new elections occurring about 
45 to 90 days later.  Although elections before a Kosovo status 
determination would probably most benefit a collaborative democratic 
bloc, some cynics believe that the GOS parties' desire to cash in on 
key privatizations is among the motivation for the government to 
hang on. The unwillingness of the opposition Radical Party to push 
for elections before a status decision also relieves pressure for 
earlier elections.  End Summary. 
 
¶2.  (SBU) Conventional wisdom in the analytical community and among 
many politicians as recently as late May held that the GoS would be 
best served by timing the announcement of new elections in part to 
cause pressure on the International Community.  The thinking had 
been that Kostunica would use the threat of political instability 
and a Radical takeover of the government if a Kosovo status decision 
was made for independence during a Serbian election campaign.  The 
announcement of MINFIN Dinkic that G-17 Plus would withdraw support 
from the government if EU SAA talks did not resume by the end of 
September added to the speculation that a fall announcement of 
elections might be unavoidable.  (note:  The last parliamentary 
elections were held in late 2003, mandating new elections no later 
than late 2007.) 
 
¶3.  (SBU)  President Tadic's Democratic Party (DS), meanwhile, has 
long held that the best chance for Serbia's democratic bloc would be 
early elections before a status decision that would allow democrats 
time under a new mandate to recover from the anticipated loss of 
Kosovo.  Sources tell us Tadic proposed to Kostunica a plan that 
would have the government call for new elections in mid-November, 
with an election date 45 days thereafter.  The plan would rely on 
the IC delaying a final status decision on Kosovo until late 
February 2007. Kostunica did not bite. 
 
¶4.  (SBU) Meanwhile, however, a new calculus has appeared on the 
political scene.  The GoS hopes its "ICTY Action Plan," presented to 
the EU on 6/17, will put SAA talks back on track in the near future, 
even without handing over Mladic.  A restart of SAA talks would 
obviate Dinkic's threat to leave the government and help stabilize 
the coalition.  (Dinkic categorically reaffirmed to the Ambassador 
recently that the G-17+ will adhere to its pledge to leave the 
government, absent a resumption of SAA talks.)  The Radicals, in 
turn clearly have no interest in elections before Kosovo is 
concluded, since obviously they want no part of the responsibility 
for losing the province. 
 
¶5.  (SBU)  Many pundits are now highlighting another,very practical, 
motivator for the GoS to hang together for the next several months: 
key privatizations.  According to this scenario, the GOS seeks to 
complete privatization of several major state-controlled companies, 
including the state oil company (NIS), major telecoms interests 
(notably MOBTEL, the second cellular provider formerly owned by 
ousted tycoon Bogoljub Karic), and a few key banking and insurance 
concerns.  Analysts argue that government parties want to enhance 
party coffers by skimming funds from these lucrative privatizations. 
 
 
A POST-STATUS ELECTION SCENARIO? 
 
¶6.  (SBU)  Interlocutors from all major democratic parties have told 
poloffs recently that the current government -- with its tenuous 
parliamentary majority -- could not last long after final status 
talks are concluded.  Once a status decision is made, they note, the 
Radical party will no longer have a reason to stall.  DS would try 
to present itself as the only true alternative to the nationalists. 
Analysts believe Kostunica will issue his "historical no" on Kosovo 
and then call for new elections, which legally must occur 45 to 90 
days later.  The strategy would be to take some of the steam out of 
Radical arguments about the current government giving up Kosovo and 
run on a "victimization" platform of having stood firm against the 
IC on Kosovo. 
 
PREPARING FOR THE CAMPAIGNS 
 
¶7.  (SBU)  Government parties, including the DS, are doing all they 
can to position themselves for elections, whenever they occur. 
MINFIN Dinkic, for example, has recently announced massive increases 
to both the military budget (up 25 percent compared to last year) 
and state sector salaries (pledging to raise them as much as 40 
percent in some cases.  Dinkic also is peddling a EURO 1 billion 
investment plan, which many view as a vote-getting strategy. 
 
¶8.  (SBU)  Despite all these preparations, the GOS continues to 
attempt steps to dissuade the IC from moving ahead quickly on 
status.  Analysts argue that the government's push for a new 
post-Milosevic constitution is intended to persuad the IC not to 
undertake any steps on status that could undermine the adoption of 
such a historic cornerstone of Serbian democracy.  In addition, 
Kostunica's diplomatic odyssey to Contact Group capitals and the UN 
has heightened expectations in the Serbian public that the IC might 
 
BELGRADE 00001157  002.2 OF 002 
 
 
be willing to compromise on Kosovo's status.  Analysts argue that 
the GOS hopes the IC will be reluctant to "shock" the Serbian 
electorate in such an atmosphere of heightened expectations. 
 
¶9.  (SBU) Comment: Speculation about early elections started nearly 
as soon as this government took power, but have never gained 
significant momentum.  Today, Kosovo status remains a key factor in 
arriving at a timetable.  Kostunica so far remains as determined to 
hold on to power as he is to reject Kosovo independence.  Unless his 
government falls earlier due to yet another miscalculation about EU 
intentions without Mladic action, elections will be next year.  What 
kind of coalitions will enter that political fight has not yet been 
decided.  The hope of many is a democratic critical mass, but 
whether it can be achieved is far from certain. 
 
POLT