VZCZCXRO6684
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBW #0301/01 0651033
ZNR UUUUU ZZH
R 061033Z MAR 07
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC 0396
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHPS/USOFFICE PRISTINA 3670

UNCLAS SECTION 01 OF 02 BELGRADE 000301 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
DEPT FOR EUR/SCE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KDEM SR
SUBJECT:  GlACIAL COALITION TALKS SHOWING SIGNS OF 
MOVEMENT? 
 
 
SUMMARY 
------- 
¶1. (SBU) President Tadic's Democratic Party (DS) and Prime 
Minister Kostunica's Democratic Party of Serbia (DSS) began 
formal talks on assembling a working coalition government 
March 2, but so far they remain deadlocked over which party 
should hold the PM position.  DS and DSS officials mostly 
toe the party line on retaining the PM position both in 
private and publicly, but their positions are more nuanced 
behind the scenes, suggesting the increasing likelihood of 
a compromise as both parties seek to avoid new elections. 
The two parties have agreed on a set of five general 
principles that will underlie a future coalition 
government.  End Summary. 
 
CLOCK TICKING ON GOVERNMENT FORMATION 
------------------------------------- 
¶2. (SBU) According to the new Serbian constitution, 
Belgrade has 90 days from the constitutive session of 
parliament -- held on February 14 -- to form a government. 
If Serbian leaders are unable to do so, parliament will 
dissolve, and the country must hold new elections by July 
¶14.  In the meantime, Belgrade faces another deadline -- 
March 31 -- to approve a budget; otherwise temporary 
financing theoretically should expire.  G17 Plus chairman 
Mladjan Dinkic has publicly declared that his party would 
not support the renewal of temporary financing past 31 
March unless serious government negotiations were underway 
at that time. 
 
PARTIES DAWDLE ON GOVERNMENT TALKS 
---------------------------------- 
¶3. (SBU) DS and DSS leaders have repeatedly reassured the 
public that they will be able to form a government, 
although both sides have stated publicly and privately that 
the prospects for compromise on the PM position are bleak. 
DS and DSS representatives began formal talks March 2 that 
succeeded in reaching agreement on coordinated policies on 
Kosovo, European integration, and cooperation with the 
International Criminal Tribunal for the former Yugoslavia 
(ICTY).  A DSS party leader told us February 28 that, while 
general red lines on Kosovo have been agreed upon, there is 
still much work to be done on harmonizing Serbia's policy 
and reactions toward a possible status decision they would 
oppose.  This official added that the delegations would 
soon begin to formally duke it out on the PM position as 
well, expressing confidence that a deal could be struck 
before March 31 that would leave Kostunica in the PM's 
chair. 
 
DS STRATEGY: HOLD THE LINE, HOPE FOR A MIRACLE 
--------------------------------------------- - 
¶4. (SBU) DS officials maintain, even in private, that they 
still intend to put Djelic forward as PM.  One senior DS 
parliamentarian told us recently that the DS leadership is 
unwilling to entertain any possibility of forming a 
government with Kostunica at the helm; either Djelic will 
be PM or there will be new elections.  These officials, 
though, talk about the way things "should" be, and are 
reluctant to speculate on the way things might turn out. 
Tadic's personal advisors are less categorical, but 
complain about the difficulty of negotiating with a 
Kostunica they perceive as "disengaged" from the status 
process.  One advisor said most of the work on portfolio 
allocation is either done or can be worked out quickly, the 
sole real sticking point is the PM's job. 
 
DSS: LACKING CONTINGENCY PLAN 
----------------------------- 
¶5. (SBU) DSS officials also remain on message for now, 
reluctant to engage even privately on their coalition red 
lines.  One DSS VP noted, for example, that because G17 
Plus and New Serbia supported Kostunica as PM and together 
outweighed Tadic's support base, Kostunica remaining as PM 
(somehow) reflected the will of the majority of Serbian 
democratic voters.  Interestingly, at least some DSS 
officials have acknowledged to us that new elections would 
be particularly bad for DSS, in part because of expected 
poor turnout due to voter apathy (which would hurt 
democratic parties more than the highly-organized 
Radicals), but also because DS could blame Kostunica for 
causing the failure of coalition talks, which could depress 
DSS turnout and energize DS.  DSS officials also did not 
rule out the possibility of a minority DS government 
supported by DSS, but admitted such an outcome is unlikely 
to be supported by DS. 
 
POSSIBLE WIGGLE ROOM FOR BOTH PARTIES 
------------------------------------- 
 
BELGRADE 00000301  002 OF 002 
 
 
¶6. (SBU) Although most DS and DSS officials continue to 
publicly and privately maintain their party lines, press 
reports indicate that some party leaders are privately more 
flexible.  DS officials continue to contend -- as Tadic has 
privately stated -- that the "instruments of power" within 
the government are more important than the PM slot. 
According to press reports, Djelic himself in informal 
talks has not ruled out the possibility of Kostunica 
serving as PM.  DSS party whip Milos Aligrudic has publicly 
stated that the party has alternative plans in case DS 
refuses to cede the PM post, although he reaffirmed that 
the PM post is of utmost importance to the party. 
 
COMMENT 
------- 
¶7. (SBU) Overall, there seems to be an increasing sense in 
Belgrade, from officials from both parties, that a 
coalition deal will be struck, perhaps even as early as the 
end of March.  The agreement on coalition principles over 
the weekend sends a signal that the parties are serious 
about the potential of working together ?- although it is 
not yet clear to what extent the DS will be willing to 
compromise its basic goals to reach agreement with the DSS. 
Tadic's problem will be explaining to party faithful why 
Kostunica was allowed to keep his post (still the most 
likely outcome) when DS won the plurality among coalition 
partners.  Some analysts suggest Tadic is well-served by 
delay, hoping that personal ambition and impatience in his 
party leadership will eventually lead them to accept the 
reality of a Kostunica-led coalition so they can take over 
long-desired portfolios. 
 
¶8. (SBU) Kostunica's main problem seems to be that his 
policy is adrift -- DSS can't get beyond simple 
rejectionism on Kosovo, and can't get beyond Kosovo into a 
broader platform of issues on which to lead the country. 
Many believe Kostunica is simply using the coalition talks 
as a tool to drag out the Kosovo status process -- DSS 
hints that the March 31 government budget deadline could be 
fudged fuel perceptions that DSS is bent on dragging out 
talks indefinitely. 
 
POLT