Serbia’s ruling SNS secures new four-year term in early parliamentary election

Serbia’s ruling SNS secures new four-year term in early parliamentary election
Poor weather did not deter Serbians from heading to the polls
By Ivana Jovanovic in Belgrade April 25, 2016

The coalition led by prime minister Aleksandar Vucic’s Serbian Progressive Party (SNS) has won the April 24 snap parliamentary election, according to early estimates from the Republican Electoral Commission (RIK) and Centre for Free Elections and Democracy (CESiD). The party took nearly 49% of the vote, less than one percentage point higher than in the 2014 election.

Although Vucic did not fulfill his ambition of raising the party’s share of the vote to over 50%, the SNS still has a sufficient majority to govern alone. However, Vucic has already said he will reach out to other parties to build a broad coalition that will allow Vucic to push ahead with planned reforms and steer Serbia towards EU accession over the next four years.

“I am so proud and deeply touched by the results, they mean we have been given the trust  [of the population] but also a huge responsibility. I know which way we should go to secure Serbia's future and how hard we should work to arrive there,” Vucic said at the SNS headquarters after the release of the preliminary election results on the evening of April 24.

“Serbia will continue on its European road, we want to speed it up. We will not make compromises, and will continue to maintain traditional friendships with Russia, China, but also with the US,” he added.

According to RIK’s latest data, based on counts from 83% of polling stations, the SNS won 48.26% of the vote. This is slightly higher than the 48.35% it took in 2014.

One of the main changes following the election, according to CESiD’s latest data based on some 90.6% of the votes counted, is that Serbia’s parliamentary life in the next four years will be much more diversified, because six more lists are expected to pass the 5% threshold to enter parliament. CESiD is a non-profit election monitoring organisation that carries out a parallel count of the vote.

The SNS’s junior partner in the last government, the Serbian Socialist Party (SPS), in coalition with United Serbia (JS), emerged as the second strongest list with 11.3% of the vote. The party could become part of the next coalition

The Democratic Party (DS), which is not expected to join the new government, took 5.9% of the vote. This was better than expected but still represents a huge slump in the party’s support since it led the government in 2008-2012.

The Serbian Radical Party (SRS), led by ultra-nationalist Vojislav Seselj, won 7.8% of the vote, allowing it to return to the parliament after it lost all its seats in 2014. Another far right group, the Democratic Party of Serbia (DSS)-Dveri coalition, is also expected to take parliament seats.

RIK puts the DS on 6.11%, SPS on 11.37% and Seselj’s SRS on 7.97%.

CESiD data showed that two other groups - the Enough is Enough (DJB) movement and the LDP-SDS-LSV coalition between the Liberal Democratic Party (LDP), Socialistic Democratic Party (SDS) and League of Social-democrats of Vojvodina (LSV) - were on track to take more than 5% of the vote.

However, according to RIK’s latest data, DSS-Dveri and LDP-SDS-LSV were still below 5%, at 4.95% and 4.98% respectively.

Turnout exceeded all expectations despite heavy rain all day throughout the country, which usually deters citizens from going out to vote. This year, many people had already been complaining that they were tired of going to the polls every couple of years.

However, CESiD data showed that by 19.00, one hour before polling stations closed, 52.9% of the electorate had been to vote. RIK announced on April 8 that 6,737,808 citizens were eligible to vote.

Coalition talks

A coalition government is most likely to be formed even though the SNS will be able to create its own government.

During the election campaign, Vucic clearly said that the SNS’s aim was to bring as many parties as possible into its coalition. The party’s pre-election coalition included the Serbian People’s Party (SNP), Party of United Pensioners of Serbia (PUPS), Social Democratic Party of Serbia (SDPS), Strength of Serbia Movement (PSS) and several smaller parties.

After the election, the party is expected to reach out to other parties such as the SPS. The party took a similar approach in 2014, inviting the SPS to join the government even though it held 158 seats in the parliament - enough to support any government initiative.

“The real drama is with whom SNS will create the coalition,” sociologist Milan Nikolic told RTS’s “Election night” show on April 24.

Vojvodina victory

The early parliamentary elections coincided with regular local elections and regional elections in the autonomous province of Vojvodina.

In Vojvodina, the SNS was not previously part of the regional government, which was led by the DS.

However, the April 24 election seems to have been a game changer for the SNS as according to CESiD preliminary data, the SNS won 45,1% of the vote in the autonomous province.

Meanwhile, the DS took just 8%, the SPS 8.8% and the Hungarians in Vojvodina party (SVM) 6.5%. Since SVM was already part of the SNS’s national government and the Hungarian government openly voiced its support for the SNS before the election, a SNS-SVM coalition is the most likely scenario.

According to RIK, a total of 55.41% of the electorate in Vojvodina turned out to vote in the election for the provincial assembly on April 24.

Serbia's EU path

Speaking after polls closed on April 24, Vucic explained his reason for calling for snap elections was that he needs a full four-year mandate to finish Serbia’s EU accession negotiations. Taking the country into the EU has been the main principle of Vucic and his party.

The first two accession negotiation chapters were opened in December 2014 marking the official start of the process. In addition to Chapter 32 on financial control and Chapter 35 on the normalisation of relations between Serbia and Kosovo, Belgrade expects to open Chapters 23 and 24 as soon as possible but not later than June 2016.

Partially thanks to the opening of the two chapters, Moody's Investors Service affirmed Serbia’s B1 long-term issuer and senior unsecured debt ratings and changed the country’s outlook from stable to positive on March 18.

“The experience of other accession countries suggests that the accession process will yield a number of enhancements to the quality of Serbia's institutions, for example higher independence and accountability of key institutions,” Moody’s said.

More reforms ahead  

Serbia has already come a long way since Vucic became prime minister in April 2014. Just a month after his appointment, Serbia was hit by devastating floods, described as the worst in the country’s history. This was a serious setback for the economy, which was already struggling.

The resulting contraction in economic growth forced Vucic’s cabinet to take the decision to cut public wages and pensions by approximately 10% in November 2014. The measure was was a necessary step economically, as the country was heading for bankruptcy, and it paid off in February 2015 when Belgrade secured a €1.2bn three-year stand-by arrangement (SBA) with the International Monetary Fund (IMF).

In 2015, Serbia managed to bring its deficit significantly below the ceiling envisaged under SBA. Under the SBA the country’s deficit was expected to reach RSD232.1bn but the IMF decreased its forecast to RSD162.1bn in November 2015, after the third review of the SBA. By 2015, the country managed to bring down the fiscal deficit to just 3.7% of GDP, the lowest level since 2008.

However, the reforms were politically risky especially as the retired population is the most responsible voting force and a significant source of Vucic’s support. Plans to lay off 30,000 people at state-owned enterprises and a further 9,000 public administration employees were seen as additional risks.

However, according to Vladimir Vuckovic, a member of the Fiscal Council, an independent government body, the unpopular measures did not scare voters.

“It is obvious that the voters support the economic politics of the [outgoing] government, which is interesting as there were some really unpopular moves. But, it seems it didn’t scare the voters which is an important message for the new government - reducing pensions, layoffs don’t have to result in a decrease in political capital,” Vuckovic told RTS.

Economist Miladin Kovacic said he believes that new government will have to move its focus from fiscal consolidation to reforms.

“[The new government] will be doing this on four fronts: restructuring of 17 firms, transforming and consolidating Srbijagas, [electricity utility] EPS and Serbian Railways, then sectoral reforms and other systemic reforms which have to cover the social sector - the pension system and [pension] funds,” Kovacic told RTS.

Serbia agreed with the IMF in May 2015 to extend court protection from creditors by up to a year for 17 key state-controlled firms of particular importance to the economy, which combined employ some 25,000 people. According to media reports the list includes bus and truck manufacturer FAP, agricultural corporation Poljoprivredna Korporacija Beograd (PKB), drug maker Galenika, lubricants maker Fabrika Maziva (FAM) and petrochemicals producer HIP-Petrohemija.

Meanwhile, the restructuring of public enterprises, in particular the three state-owned giants EPS, Srbijagas and railways operator Zeleznice Srbije, is required under Serbia’s SBA, and the IMF has criticised Belgrade’s slow progress. This is expected to accelerate after the election.