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BLOOMBERG (USA) Kostunica May Be Serbia Kingmaker as Pro-West Tadic Group Slips By Aleksandra Nenadovic May 9 (Bloomberg) -- Serbia's caretaker prime minister, Vojislav Kostunica, may be kingmaker after a May 11 general election in which pro-western forces are battling politicians who favor closer ties to Russia. Kostunica has joined Serbian Radical Party leader Tomislav Nikolic and his Socialist Party allies in opposing a pre- membership accord signed with the European Union last week and may form a coalition with him. A defeat of President Boris Tadic's pro-western alliance may lead Serbia to freeze its EU bid to protest against decisions by most of its 27 countries to recognize Kosovo's Feb. 17 independence declaration. Tadic beat Nikolic in a presidential election on Feb. 3 by about 100,000 votes. ``I can see bitter feelings among Serb voters that voted for Tadic in the presidential elections and shortly after that lost Kosovo,'' said Mark Almond, a history lecturer at Oxford University's Oriel College. ``Judging by the mathematics, from the polls, Kostunica is receiving a lot of backup and he can use it to form a government with the Radicals.'' A defeat of Tadic may further unsettle investors rattled by the political turmoil that followed Kosovo's declaration, which all of Serbia's major parties oppose. Serbia's benchmark stock index has fallen 31 percent this year on concern that the Balkan country will become isolated again or court ties with Russia instead of enacting free-market reforms. The Radicals bested Tadic's Democratic Party and its allies by 33.2 percent to 31.5 percent in a poll published May 6 by Strategic Marketing, a Belgrade-based firm. A coalition led by Kostunica's similarly named Democratic Party of Serbia placed third with 13.8 percent. Coalition `Fear' ``I fear that a coalition between Radicals and Kostunica's bloc is certain'' if Tadic can't muster enough support to form a government, said Danijel Pantic, managing partner at the HD European Consulting Group, a Belgrade research organization. The three leading political camps are split on how to respond to the secession of Kosovo, a mostly Albanian territory seen by many Serbs as their medieval Orthodox Christian civilization's heartland. Kostunica's alliance and the Radicals favor closer ties with Russia and refuse to compromise with the EU. Tadic's side wants Serbia, a former Yugoslav republic of 7.5 million people, to pursue EU membership and find a peaceful solution on Kosovo. In a sign that European countries are trying to bolster Tadic's camp, 17 of them announced on May 6 that they will offer free visas to Serbs. Horse-Trading After the election, there may be an extended period of horse-trading as Kostunica seeks to capitalize on his role, perhaps by seeking to keep the prime minister's job. The Socialists and Kostunica's party will ``jointly decide who will lead the government, Democrats or Radicals.'' said Djordje Vukovic, a political analyst at Belgrade's Center for Democracy and Free Elections. Kosovo's secession, which the U.S. also recognized, inflamed anti-western passions in Serbia. Public anger boiled over on Feb. 21, when foreign embassies and shops in Belgrade were vandalized. The controversy led to the collapse in March of a coalition cabinet that Kostunica had formed with Tadic's alliance in June. The EU's April 29 pre-membership accord, which conditioned aid and trade benefits on Serbian efforts to arrest the most- wanted war-crimes suspects from Yugoslavia's violent 1990s breakup, was championed by Tadic, Deputy Prime Minister Bozidar Djelic and Foreign Minister Vuk Jeremic. Opponents condemned the deal as treason, and Kostunica and Nikolic both pledged to annul it if they control the new parliament. `Drastically Reduced' ``The EU will tacitly accept a Radicals-dominated Cabinet, but all relations with it will be slowed down and minimized,'' said Pantic. ``I do not believe that the country will be isolated, but political and economic relations will be drastically reduced.'' Russia has backed Serbia's opposition to Kosovo's independence, vowing to block the territory's membership in international organizations and denouncing an EU mission there as illegal. Yet Russia's interest in the election is colored by its desire for a commercial foothold in Europe, so it favors Tadic's pro-western alliance, not his Russia-leaning opponents, said Fyodor Lukyanov, an analyst at the Moscow-based Council on Foreign and Defense Policy. Vladimir Putin, Russia's president until May 7, urged Kostunica to back rival Tadic's presidential candidacy at a meeting on Jan. 25 in Moscow, said Sergei Markov, a Kremlin adviser and lawmaker in the ruling United Russia party. Energy Deal Russia and Serbia signed an agreement the same day giving OAO Gazprom, the Russian state gas monopoly, 51 percent of Serbian national oil company, Naftna Industrija Srbije. The deal, which the Serbian parliament has delayed ratifying, also would make Serbia a transit country in Gazprom's planned South Stream pipeline to western Europe. ``Russia has no geopolitical interest in forming a bloc with Serbia,'' Lukyanov said. ``Russia's interest is to acquire a major asset in Serbia with the longer-term objective of getting a foothold inside the EU and strengthening its position.'' To contact the reporter on this story: Aleksandra Nenadovic in Belgrade at [EMAIL PROTECTED] <mailto:anenadovic%40bloomberg.net> . Last Updated: May 8, 2008 18:01 EDT
