SNS-SPS decide to reshuffle Serbian govt ousting FinMin Dinkic’s URS

By bne IntelliNews July 31, 2013

The leading parties in the Serbian government – SNS and SPS, will wrap up the planned cabinet reshuffle via ousting economy and finance minister Mladjan Dinkic and his URS party. Thus, any talks about early elections have been silenced, at least for the time being.

The proposal for throwing Dinkic out of the government came on Tuesday, July 30, from PM Ivica Dacic, who is also the leader of the Socialist SPS. Dacic said SPS is willing to continue its cooperation with SNS but without URS, adding that if SNS is not happy with this alternative they are free to choose another partner instead of SPS, or bid for early elections.

Deputy PM and leader of the largest party in parliament SNS - Aleksandar Vucic, on Wednesday, July 31, said SNS is accepting the proposal of SPS for leaving URS out of the reshuffled cabinet – aiming to preserve the political stability in the country and avoid calling another elections only a year after the previous ones were held in May 2012.

Vucic told a press conference that the SNS presidency has decided to continue the work in the government without URS with “much bigger responsibility and with concrete results”. He added that the presidency members had a difficult dilemma at their July 31 session when they had to vote on the proposal of SPS’ Dacic. The majority of them opted for early elections, Vucic said.

“I asked them to agree not to go for this at the present moment in the name of the country’s stability, and they agreed,” he added, reminding Serbia is ahead of signing several vital contracts (like the one between UAE’s Etihad and Jat Airways) and such instability would not bring anything positive for the citizens and their interests.

Furthermore, Vucic said, his party planned to continue the partnership with both SPS and URS in the reshuffled cabinet - not because it agrees in everything with them but because it believes it is better when in the decision making for the country’s future participate more political parties. He added SNS was ready to hold talks with Dinkic on the government reconstruction.

However, a day earlier his ally Dacic said SPS’ verdict to insist on removing Dinkic as finance and economy minister is grounded on the country’s poor economic state. Dacic also added that during the negotiations, which preceded the final decision, Dinkic agreed to split in two the economy and finance ministry that he leads but asked to receive a newly-created post of a deputy PM in charge of investment.

Later in the day on July 30, Dinkic told reporters that it was quite the opposite – and it were Dacic and Vucic who offered him the deputy PM post. Dinkic accused Dacic of misleading the public because of fears for him PM post.

As the political clashes develop, the news that the cabinet will be reshuffled without the need of early elections sends a calming signal to investors and the international community – as Serbia should instead start preparing for the launch of EU accession talks in January 2014.

Without URS, SNS and SPS will still keep a slim majority of 126 votes in the 250-seated parliament, which might not enough to preserve the political peace lastingly.

Moreover, the World Bank warned on Wednesday the political instability might delay the agreed help of USD 200mn for the Serbian budget, adding the change of the finance minister could result in a three-to-five months delay – the time the new finance chief would need to get informed on the agreed deal and the World Bank would need to identify what the new policy will be.

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