VZCZCXRO7018
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHBW #1326/01 3590704
ZNR UUUUU ZZH
P 240704Z DEC 08 ZDK CTG RUEHKV #4932 3651140
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC PRIORITY 0803
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEHNS/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASH DC
RUCPDOC/USDOC WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 BELGRADE 001326 
 
SENSITIVE 
SIPDIS 
 
E.O.12958: N/A 
TAGS: PGOV PREL ECON EINV SR
SUBJECT: SERBIA: NEW PROGRESSIVE PARTY'S POLICY PLATFORM AND PLANS 
 
REF: A) BELGRADE 1243, B) BELGRADE 1302 
 
BELGRADE 00001326  001.3 OF 002 
 
 
Summary 
------- 
 
¶1.  (SBU) The Serbian Progressive Party (SNS), led by ex-Radicals 
Tomislav Nikolic and Aleksandar Vucic, has recently advocated a more 
active role of the government in the economy coupled with a shift 
away from focusing on macroeconomic fundamentals.  Despite rampant 
speculation to the contrary, SNS leadership tells us that they aim 
to remain an opposition party and that their delicate position in 
the center will limit their public support of European integration 
legislation in Parliament.  In the wake of Vucic's recent visit to 
Croatia, the SNS has no plans to seek financial assistance for Serbs 
remaining in the Krajina region of Croatia. SNS contacts lead us to 
believe the party supports Kosovo partition.  End Summary. 
 
SNS Economic Priorities Come Into Focus 
-------------------------------------- 
 
¶2.  (SBU) In a November 19 meeting, Jorgovanka Tabakovic, the most 
prominent economic voice in the SNS, outlined for us the party's 
views on economic issues.  Her comments tracked closely with press 
reports of her December 16 meeting with Prime Minister Cvetkovic to 
discuss the economic crisis.  Tabakovic strongly criticized the 
current tight monetary policy (strong dinar/low inflation) and 
claimed that the overvalued dinar hurt the Serbian economy.  She 
claimed that with responsible monetary policy Serbia would have no 
need for the IMF and that the Central Bank should target improved 
living standards rather than inflation. 
 
¶3.  (SBU) Tabakovic advocated a more protectionist trade policy and 
said that Serbia should not unilaterally implement the Interim Trade 
Agreement with the EU because it would cut Serbian government 
revenue.  She said that introducing quotas or some administrative 
restrictions on trade would be a positive step.  Tabakovic pointed 
to the "good example" of U.S. quotas on vehicle imports from Japan 
in the 1980s as the kind of measure that could be effective for 
Serbia.  Tabakovic claimed that the liberalization of Serbian trade 
was a mistake.   SNS wanted to establish a domestic development bank 
(like Germany's KfW) which would finance Serbian exports and 
economic development projects in Serbia. 
 
SNS Claims It Plans to Remain in Opposition 
------------------------------------------- 
 
¶4.  (SBU) Despite rampant speculation (reftel) that the SNS will 
replace coalition partner G17 Plus in the government, SNS leadership 
unequivocally told us that the rumors had no foundation.  Speaking 
to Poloff on December 11, SNS presidency member Nebojsa Stefanovic 
said that the SNS would remain in opposition until new elections 
were held.  Stefanovic argued that being in the opposition was 
beneficial for sharpening policy ideas and party organization and 
pointed to examples in U.S., British, and German politics.  He 
claimed that the SNS was attracting mid-level DSS and DS party 
officials as new members.  He added on December 17 that SNS 
membership levels would likely level off for the next year or so, as 
most of those from the SRS who wanted to switch had already done so; 
the party would now focus on attracting members who were not in a 
party, a process that would be slow. 
 
Limited Support for EU Legislation, Krajina Serbs 
--------------------------------------------- --- 
 
¶5.  (SBU) Due to the difficulties of  attracting followers from 
conservative and liberal parties, Stefanovic said that the SNS's 
balancing act would preclude reliable support in Parliament for 
upcoming European integration legislation, including the judicial 
reform package and measures needed to join the Schengen White List. 
(Comment: The SNS's decision to temporarily leave the chamber 
enabled Parliament on December 22 to pass controversial elements of 
the judicial reform package with only 123 votes.  End Comment.) 
While Nikolic and Vucic would continue to publicly support EU 
membership for Serbia, Stefanovic said, they would only consider 
supporting such legislation on a "case by case basis."  Giving a 
blank check for the legislation, Stefanovic said, would taint the 
SNS as "DS collaborators" and "seriously erode" the SNS's political 
base.  Stefanovic said that he expected President Tadic to call new 
elections in the next several months because current DS efforts to 
reach accommodation with the SRS would fail. 
 
¶6.  (SBU) Stefanovic traveled with Vucic to Croatia from December 
8-10, in a widely-publicized trip to visit "endangered" Serbs in the 
Krajina region of Croatia.  Despite the party leadership's concern 
for Krajina Serbs, Stefanovic said, the SNS would not seek funding 
from the Serbian government because the time was not right to "turn 
 
BELGRADE 00001326  002.2 OF 002 
 
 
the knife in the Serbian government" on this issue.  Stefanovic 
suggested to us the U.S. could earn enormous goodwill by rebuilding 
a handful of Serb homes in the Krajina while tacitly supporting the 
de facto partition of Kosovo.  With Kostunica-esque language, 
Stefanovic described Kosovo partition as the only realistic solution 
because "every Serb prays each night asking 'let there be Kosovo 
partition.'"  (The SNS party platform does not explicitly advocate 
partition, instead referring to Kosovo as Serbian territory that 
Serbia would defend without compromise.) 
 
 
Comment 
------- 
 
¶7.  (SBU) The SNS does not have a clearly defined economic platform, 
but the policies that Tabakovic advocates reflect her socialist 
roots as a minister in the Milosevic government.  Beneath the veneer 
of support for progress toward Europe, the SNS's economic agenda is 
one that looks backward to socialist and protectionist measures. 
Similarly, the SNS currently intends to play the role of opposition 
without actively turning its pro-European rhetoric into policy 
reality.  The SNS continues to poll second to the DS in recent 
polls, making it unnecessary for the party to articulate any 
particular position.  The party will continue to draw its primary 
support from Serbia's "losers," as Vucic and Nikolic continue to 
stoke feelings of alienation with the luxury of not having to 
develop practical alternatives.  End Comment. 
 
MUNTER