VZCZCXRO1976
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBW #0396/01 1091509
ZNR UUUUU ZZH
P 181509Z APR 08
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC PRIORITY 0192
INFO RHEFDIA/DIA WASHINGTON DC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEKJCS/JOINT STAFF WASHDC
RHEHAAA/NSC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEHBW/AMEMBASSY BELGRADE 0287

UNCLAS SECTION 01 OF 03 BELGRADE 000396 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KPAO PBTS PGOV PHUM PINR PREL SR
SUBJECT: SERBIA: SOCIALISTS EAGER TO DEAL 
 
REF: 08 BELGRADE 309 
 
BELGRADE 00000396  001.2 OF 003 
 
 
Summary 
 
------- 
 
 
 
¶1. (SBU) Serbia's Socialist Party appears to have enough support 
to win seats in the May 2008 parliamentary elections, and may 
even increase their parliamentary presence for the first time 
since the ouster from power of former party chairman and 
convicted war criminal Slobodan Milosevic.  Party officials have 
left open the possibility of coalitions with either pro- or 
anti-EU blocs.  The party membership is divided between 
Milosevic-era Communists and reformers who envision a modern 
leftist party that can deliver on social and economic issues, 
with some party leaders privately saying they fall into the 
latter camp.  These internal divisions will not prevent the 
party from trying to leverage a potential kingmaker role and 
make the best possible deal in post-election negotiations.  End 
Summary. 
 
 
 
Not Dead Yet 
 
------------ 
 
 
 
¶2. (SBU) One year ago, Slobodan Milosevic's Socialist Party of 
Serbia (SPS) was on the brink of extinction.  Heading no 
ministries, the SPS had held marginal power only through 
minority support for Kostunica's 2003-2006 governing coalition. 
Pollsters were mixed as to whether the SPS could pass the 5% 
threshold necessary for parliamentary representation, and many 
political observers considered the SPS to be a dying party. 
These analysts cited Milosevic's legacy, the Serbian Radical 
Party's (SRS) appeal to hardliners, and simple demographics 
(ageing pensioners) as reasons for the party's decline.  In the 
2007 election, the SPS competed with parties such as the Serbian 
Pensioner's Party (PUPS) for similar constituencies. 
Nevertheless, in the January 2007 parliamentary election, the 
SPS held on, clearing the threshold with 5.6% of the vote (about 
227,000 votes).  This marked the lowest vote total ever recorded 
by the SPS. (In 2003 the SPS won over 7%, and in December 2000 
-- the first elections after Milosevic was ousted by current 
Prime Minister Vojislav Kostunica -- over 13%.) 
 
 
 
¶3. (SBU) The SPS appears to have reversed its downward trend. 
In the first round of presidential elections in January 2008, 
SPS candidate Milutin Mrkonjic won almost 250,000 votes -- more 
than Liberal Democratic Cedomir Jovanovic and without 
endorsements from PUPS or other parties.  SPS leader Ivica Dacic 
made important pre-election coalitions with both PUPS and Dragan 
"Palma" Markovic's United Serbia (JS).  PUPS garnered over 
120,000 votes in 2007 (3.1%) and Markovic, mayor of Jagodina and 
former Serb paramilitary leader, likely brings 15,000 to 20,000 
votes. 
 
 
 
SPS: We're Ready to Lead 
 
------------------------ 
 
 
 
¶4. (SBU) The party is optimistic.  On April 5, Dacic launched 
the SPS campaign in Belgrade, promising a "great [SPS] 
comeback."  He told Politika on April 11 that the SPS would no 
longer just offer minority support, as it did for Kostunica. 
Vranje's Mayor Miroljub Stojcic (SPS) told the Ambassador on 
April 8 that the rally's 20,000-person attendance exceeded 
expectations.  According to an April 15 article in Vecernje 
Novosti entitled "The Left Strikes Back," the SPS successfully 
weathered the post-Milosevic era and has now become the "most 
eligible" coalition partner.  Vercernje Novosti listed former 
FRY President Zoran Lilic (1993-1997), Partizan Football Club 
President Tomislav Karadzic, ICTY defense lawyer Toma Fila and 
private university dean Mica Jovanovic as examples.  Dacic 
claimed to B92 on April 8 that SPS had the most "professionals," 
like Mrkonjic, who are "capable to run" Serbia.  The SPS leader 
said the party's governing priorities would be higher pensions, 
free medical treatment, abolishing academic scholarships, and 
 
BELGRADE 00000396  002.2 OF 003 
 
 
strengthening labor unions. 
 
 
 
SPS Strongholds Persist 
 
----------------------- 
 
 
 
¶5. (SBU) Local SPS leaders are confident that disillusionment 
throughout segments of society has kept their party platform 
relevant.  Popular Mayor Stojcic told the Ambassador on April 8 
that Serbians wanted political leaders to address unemployment 
and social welfare "above all else" and that the SPS was well 
placed on these issues.  Milos Babic, New Serbia (NS) Mayor of 
Kraljevo, told the DCM on April 14 that support for the SPS ran 
around 10% in his region, due to the importance of social 
issues.  Babic said the disproportionately older population of 
Serbia was interested in pensions, social welfare and 
unemployment benefits -- core SPS issues.  Babic said that the 
SPS benefited from the fact that privatization had been a 
"disaster" in central Serbia.  Svetomir Gordic, local SPS leader 
in Priboj, (western Sandzak) told poloff on April 10 that out of 
20,000 voters, 6,000 were pensioners and strongly supported SPS. 
 Gordic thought enough time had passed to "stop demonizing the 
SPS and Serbia" and that Serbia must join the EU, but with 
"dignity and pride." 
 
 
 
Fiery Rhetoric 
 
-------------- 
 
 
 
¶6.  (U) Although Milosevic died over two years ago, his party 
still claims him and his nationalistic rhetoric.  In February 
2008, in the wake of Kosovo independence and the February 21 
riots, Dacic said that Milosevic and the SPS "began the battle 
for Kosovo" with giant rallies in Kosovo and Belgrade.  Dacic 
said the SPS was "particularly pleased" by the unity of 
political parties on Kosovo because "Milosevic defined that 
position."  On March 12, the second anniversary of Milosevic's 
death, Dacic told supporters that the party's current leaders 
carried on Milosevic's legacy and espoused Milosevic's message 
on Kosovo.  Milosevic's "principles of [our] national policy are 
still alive," Dacic said proudly.  Dacic told the daily Politika 
on April 11 that Milosevic had been more successful than his 
successors.  The SPS "got the Dayton Accords and Resolution 
1244," he said.  "What have [the Democrats] done in eight 
years?"  In a conversation with poloff on April 11, SPS mayor of 
Novi Varos (and member of main board) Branislav Dilparic called 
the United States "hypocritical" on Kosovo and said the February 
21 attack on the U.S. Embassy was "minimal" compared to "what 
the United States did to Serbia in 1999." 
 
 
 
Coalition Options: The Great Debate 
 
----------------------------------- 
 
 
 
¶7. (U) While Dacic has publicly stated that hardline parties 
such as the DSS and Radicals are more "natural" coalition 
partners, he has been careful not to rule any major parties. 
Dacic told B92 that coalition "talks with everybody are 
possible" except the Liberal Democrats (LDP) or DS-bloc members 
Nenad Canak (League of Socialist Democrats of Vojvodina) and Vuk 
Draskovic (Serbian Renewal Movement).  In an April 11 interview, 
Dacic said he would first speak with Kostunica's DSS after 
elections, calling them the "most natural partner."  Speaking to 
B92, Dacic said he expected the SPS and DSS to be kingmakers 
citing "political mathematics." 
 
 
 
Privately Pragmatic? 
 
-------------------- 
 
 
 
¶8. (SBU) In contrast to these public comments, Dacic told poloff 
 
BELGRADE 00000396  003.2 OF 003 
 
 
in a February 25 meeting that the SPS "wanted to work with" the 
United States and EU, but that would only be possible after 
several months or more.  He said the SPS intended to become a 
mainstream socialist party, and hoped to join the Socialist 
International.  Mayor Stojcic of Vranje told the Ambassador on 
April 8 that many in the SPS "wanted to modernize" the party and 
"separate from history."  He said it was a good sign that the 
SPS had indicated it was open to cooperating with "all parties." 
 He hoped, however, that the party would clearly enunciate its 
core values -- support for pensioners and the unemployed -- and 
agree for these to be government priorities before entering into 
a coalition.  On various occasions from October 2007 through 
January 2008, Dacic told poloff that he intended the SPS to be 
in the next government.  Although he specifically left 
unanswered the question of coalition partners, he claimed that 
SPS leadership supported President Tadic and the Democratic 
Party.  Academic Mihailo Crnobrnja told the DCM on April 8 that 
the SPS and DS could still find an agreement after elections, as 
the DS would be able to draw in the reformist SPS wing by 
supporting SPS membership in the Socialist International. 
 
 
 
Deal Rumors 
 
----------- 
 
 
 
¶9. (SBU) According to a DS contact, the DS, SPS and LDP are 
discussing a deal already.  Filip Medic, advisor to senior DS 
official Ivan Vejvoda, told poloff on April 18 that under terms 
of the agreement SPS would hold some ministries while the LDP 
would provide minority support "as long as the coalition 
continued on the path of European integration."  Medic worried 
that if the details are accurate and the news leaks before May 
11, the SPS would lose support from hard-line members as a 
result and hurt the Socialists' ability to cross the 5% 
threshold. 
 
 
 
Still Not Buying It 
 
------------------- 
 
 
 
¶10. (SBU) As reported in reftel, many political observers do not 
consider an SPS-DS agreement realistic.  LDP vice president Ivan 
Andric told poloff April 14 that despite Dacic's claims, it 
would be impossible because of backlash from the hard-line 
majority of the SPS voters.  If given a choice, SPS would join 
the Radicals, he said.  Former Tadic advisor and Kosovo 
negotiator told poloff, April 16, that an SPS-DS deal was highly 
unlikely.  DS, in his view, "blew it" by letting the prospect of 
a coalition become public, forcing Dacic to publicly repudiate 
it.  Kojen added that the SPS "revival" would be short-lived and 
reflected savvy political alliances rather than a return to 
political relevance.  "The next wave of pensioners will not be 
Socialists," he said. 
 
 
 
Comment 
 
------- 
 
 
 
¶11.  (SBU) Short-lived or not, the Socialists will likely play 
an important role in the post-election coalition negotiations 
either with the DS or SRS.  Even if the DSS and SRS agree to 
govern, they may still need SPS support to form a government. 
If the SPS enters into negotiations with the DS-bloc, the SPS 
will look for ways to use DS credentials to renew their 
international legitimacy as a reformed leftist party.  Either 
way, the SPS will likely exact a cost high enough to keep them 
politically visible and viable until the next elections.  End 
Comment. 
MUNTER