Most Serbian voters do not anticipate any changes after the April 24 parliamentary election, despite intensive campaigning by the country's politicians. Prime Minister Aleksandar Vucic is set to score a comfortable victory, which he is expected to use to push ahead with reforms to the economy and to bring Serbia closer to its goal of EU membership.

After months of speculation, Vucic decided in January to call early elections even though his Serbian Progressive Party (SNS) has a substantial majority in parliament. It is just two years since Serbia’s last snap election, but by holding new elections Vucic is understood to be seeking to increase his majority and secure another four years in office to make it easier to carry out potentially unpopular economic reforms.

Measures already taken by Vucic’s government to consolidate public finances could negatively impact the SNS’s result. However, rival parties do not appear to have taken advantage of this potential weakness.

As the election approaches, many Serbians are simply fed up by the constant campaigning. Few expect the elections to bring anything new or consider politicians are able to make any changes that will benefit ordinary citizens.

“I do not believe anyone anymore. They all have same stories and no one does anything to make a change. I lost my job in 2010 and still haven’t been able to find new one,” Kristina Stojanovic (34), an unemployed economist from Belgrade, told bne IntelliNews.

“Vucic and the SNS are campaigning all the time and they are so pushy. Unfortunately, I can’t trust my preferred party any more as they were really bad while they were in power. I can’t vote for the right-wing movements either, so I will likely not vote. An extra reason is that I really don’t believe that anything can be changed in this country,” she added.

Most people on the streets of Belgrade didn’t even want to talk about the elections, as they said they were tired of hearing about them every two years.

Silver voters

The real voting force is retired people, who number over 1.7mn among the population of just over 7mn. Even though they were hit by fiscal consolidation measures introduced in November 2014, when all pensions and public sector wages were cut by approximately 10%, most of them carefully listen to political parties’ messages and plan to vote.

The Party of United Pensioners of Serbia (PUPS) is a considerable force in Serbia. The party campaigned alongside Vucic’s SNS under a coalition deal struck between their leaders on February 19.

However, Radmila Aksentijevic (72), a retired administrative worker from Belgrade, told bne IntelliNews she will go to the polls only in order to vote against Vucic, as she hates him because he “took her pension”.

“I hate to see him, hate to hear his voice. These days are torture as he is everywhere and it isn’t possible to escape from him. I just want to see the back of him and get my full pension again. I didn’t work for almost 40 years for Vucic to take part of my hard earned money,” Aksentijevic said, adding that while she does not believe anyone else could change the situation immediately, at least it would be easier for her to look at someone other than Vucic.

Retired lawyer Olga Kostic (80), says she likes Vucic’s English and how he represents the country abroad, but that early elections every two years are too much for her. “I’m not angry because the state took part of my retirement income, I was raised in the post-war days and I know how hard it is to overcome a crisis... But I really don’t understand why would I have to go to vote every two years if the law says a government mandate is four. I like Vucic but I’m getting a bit sick of him,” Kostic told bne IntelliNews.

According to Rade Petrovic (68), a retired construction worker from Belgrade, Vucic has made a mistake by calling early elections, which could cost him significant support. He forecasts that if the SNS’ support dips below 50%, all other parties could join forces against him. “I am afraid he did exactly the same thing as Slobodan Milosevic in 2000 when he called an early election, believing that the end of the three-month Nato bombing in 1999 would bring him additional support and extend his days on power,” Petrovic told bne IntelliNews.

“Vucic’s campaign was really quiet compared to the [opposition] Democratic Party’s. They ring on my doorbell almost every day and my mailbox is full of their promo material – I should rather say their promo lies – and I’m really sick of them. The municipality where I live is one of a couple in Belgrade where the Democratic Party is still in power and they abuse it all the time,” he said.

Petrovic believes that cutting pensions was a necessary step and that the government would not have taken if it didn’t have to, as it inevitably resulted in dissatisfied people and decreased support.

SNS scorecard

The March 2014 early elections, held just over two years after the regular elections in spring 2012, gave Vucic’s SNS its best-ever result, not only because it won over 48% of the vote but also because support for other parties went down. In 2014, the Liberal Democratic Party (LDP), United Regions of Serbia, Democratic Party of Serbia (DSS) and even Vucic’s previous party, the Serbian Radical Party (SRS), failed to pass the threshold to enter parliament. The SNS’ coalition partner, the Serbian Socialist Party (SPS), also saw a drop in support to 13.49%.

However, history is not about to repeat itself in the April 24 election, as few people expect the ruling party will fail to win a majority with even more votes than in 2014.

According to a Faktor Plus poll conducted on April 17-20, the SNS will be supported by 50.9% of voters, while a poll from Antenna Group Serbia and Belgrade's Centre for Free Elections and Democracy (CESiD) indicated that the SNS will receive slightly over 50% of the votes of decided voters.

The early election is also expected to result in the return of far right parties to the parliament. After being acquitted of war crimes by a tribunal in the Hague, ultra-nationalist SRS leader Vojislav Seselj is back in Belgrade campaigning, and both his party and a right-wing coalition between the DSS and the Dveri movement could take seats this time.

Timothy Ash of Nomura International wrote in a note on April 21 that the polls suggest there will be a significant and vocal minority (35-40 seats) of anti-EU contingent in the new parliament. “However, despite this, likely three quarters of the new parliament will still be supportive of the country’s EU orientation, and reform agenda. So it seems unlikely that the SRS/DSS/Dveri will significantly risk the pro-EU reform agenda at present,” he wrote.

“This election will not change anything except to confirm the legitimacy of Aleksandar Vucic. The campaign was awful, we haven’t seen anything but Vucic... he will win the election with around 50%,” Dejan Jovovic, a permanent member of the Scientific Association of Serbian Economists, told bne IntelliNews.

Investor confidence

Despite the election fatigue among many Serbians, the reforms carried out by Vucic’s government in the last two years have improved Serbia’s reputation among investors.

In February 2015, three months after the public sector wage and pension cuts, Belgrade secured a €1.2bn three-year stand-by arrangement (SBA) with the International Monetary Fund (IMF). In December, Serbia opened its first two accession negotiation chapters with the EU. Vucic’s government has also continued talks with the Kosovan government in an attempt to normalise relations between Belgrade and Pristina.

“Net-net we see Serbia still as an improving credit story (rating likely moving in right direction, long overdue), and would be long Serbia risk. Recent market underperformance has likely been a reflection of technicals (some larger holders reducing positions perhaps), rather than the fundamental story,” Ash said.

On March 18, 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. The ratings agency said this reflected the government’s commitment to addressing the deterioration in the sovereign's debt burden through structural reforms and enhancements in institutional quality, as well as the fiscal consolidation programme.

Jovovic said he does not believe that the post-election period will bring any changes for the business community in Serbia since the same people will continue to lead the government.

“What can be new - nothing! Anyway, [the result] shouldn’t be bad when it comes to new investments, as confirmation of the government’s legitimacy is a guarantee of stability, and as such could be a decision maker for investors who weren’t sure whether to come or not,” Jovovic said. 

With a win for Vucic’s SNS almost certain, his government is set to receive a mandate to forge ahead with further reforms, in particular the restructuring, privatisation or potential closure of state-owned enterprises.

On April 5, the government scored a pre-election coup when it agreed to sell the Zelezara Smederevo steel mill to China’s second largest steelmaker Hebei Iron and Steel Group (HBIS). The deal will secure the future of Zelezara, Serbia’s only steel mill and its second largest exporter, as well as most of the jobs of the 5,000 workers at the plant.

However, the prospects for other major state-owned enterprises that the government has so far failed to privatise are still uncertain, and mass layoffs are expected. 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.

Serbia also failed to lay off some 9,000 people working within the state administration planned for February, according to the Fiscal Council, an independent state body. The council has criticised the government for being slow to reduce the public sector workforce, as this is one of the key drivers of consistent and long-term consolidation of public finances.

Local elections in the shade

The early parliamentary election will coincide with regular local elections and regional elections in the autonomous province of Vojvodina. These have been overshadowed by the parliamentary elections, a situation that is expected to benefit the SNS, as usually voters select the same option in the local and national ballots,  unless they have a personal preference for or against a local candidate.
 
In Vojvodina, the SNS is not yet part of the regional government, which is led by the Democratic Party. However, the April 24 could be a game changer as the SNS is now openly supported by the Hungarian government, and Hungarians represent almost 15% of Vojvodina’s population. This would further cement the position of Vucic’s party across the country.