Not your Serbian déjà vu

The Serbian presidential elections this weekend look familiar – but Serbia is a very different place to how it was in 2004 and 2008. It is normalising fast and its core concerns are far more similar to other European countries than they were before.

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The trial of Ratko Mladic is a reminder that recent history casts a long shadow in the Balkans. But as Serbia approaches the final round of its presidential elections this weekend there are definite signs that the keystone country of the region is at last becoming normal. This is good news for the EU and for the Serbs themselves.

The circumstances surrounding the elections may give rise to feelings of déjà vu. As in both 2004 and 2008 Boris Tadić, a pro-Europe democrat, faces a populist with an impeccable nationalist pedigree. To echo the epic songs rhapsodising the Serbs’ medieval glories and catastrophes, will the forces of good (Tadić) defeat Tomislav Nikolićand the forces of darkness?

This time, however, the Serbian political landscape is far more complex than such a simplistic good/bad struggle. It is certain that the future president, whoever of the two wins the contest, will have to cohabitate with a government composed ofTadić’s Democrat Party (DS), and the Socialist Party of Serbia (SPS, once presided over by a certain Slobodan Milošević),along with one or two smaller parties. Whatis more, the SPS leader Ivica Dačić (Slobo’s spokesperson in the 1990s) might even be in charge. After his party won 15% of the popular vote, the SPS leader noted that “Perhaps it is not known who will be Serbia's president, but it is known full well who will be prime minister.”If Tadićwins on Sunday this might well come true. Few in Brussels will object.

What if Nikolićwins and the pro-EU coalition is forced to share power with a former paramilitary? It would be tricky and uncomfortable, to be sure, but not the end of the world. For one, nationalist posturing is present across the whole political spectrum in Serbia. A protégé of Tadić, Foreign Minister Vuk Jeremić,has long outdone the opposition in waving the flag over the Kosovo issue. And what about Dačić’s electioneering stunt to arrest a Kosovar unionist to show who is the toughest of them all? Nikolić, by contrast, has not played up the issue. Instead he campaigned on corruption and economic troubles, and even visited an Albanian-majority area in the south to talk about coexistence. He also says Serbia should do its utmost to join the EU in the next decade and reap maximum benefits from accession. Nikolić‘s political message specifically draws a distinction with Europhobes such as Vojislav Koštunica or his ex-boss Vojislav Šešelj.

Talk, however,is cheap in politics, and Nikolić’s Serbian Progressive Party (SNS)has yet to prove that itcould emulate the example of the Croatian Democratic Union (HDZ), a nationalist party that managed the shift to the centre-right and European respectability. The international community seems disinclined to give Nikolićthe benefit of the doubt just yet. But the SNS is facing what might be called the political Islamists’ dilemma: until it finds itself in real power it has little incentive to back up its words with action and demonstrate that it really is on the path to moderation.

As all main players now favouring the EU, it is only natural that Serbian political life now focuses on issues such as jobs, welfare, development, and corruption in high places. Like the rest of the Western Balkans Serbia is in poor shape economically. 2011 was the first year of growth since the onset of the global financial crisis three years beforehand, although the 1.9% growth in Serbia’s GDP was well below the 5.4% average enjoyed between 2000 and 2008. 22.2% of the workforce is unemployed, and there are worrying parallels with the EU’s southern countries. It suffers from a combination of fiscal and balance-of-payments deficits,alarge debt (45.1% of GDP), anaemic growthand alack of competitiveness.

Nikolićhas undoubtedly been boosted by the disaffection that this economic gloom has caused. After a term in office the incumbent DS is finding it tough to explain to voters that it is still a force for good. Corruption scandals and pork-barrel politics have tainted its reputation. Serbia’s good rapport with the IMF and progress with attracting foreign investors(including landmark projects by companiessuch as Fiat and Benetton)fails to convince those whoseethemselves as losers in the transition to a market economy at a time of widercrisis.

So what can the EU do in this more complex Serbia? Brusselshas few other choices but tobet on the status quo. Tadić has agreed to cooperateonKosovo,leading to several important breakthroughs in the “technical talks” with Pristina. If Nikolić gets the presidency he might find it expedient to undercut deals struck by the governing coalition and score quick points domestically. A tandem between Prime Minister Dačić and President Tadić would maintain momentum in the talks that won Serbia EU candidate status back in March.

A question also remains over Dačić’s competence as an economic manager: it is one thing to head the Interior Ministry (as he did in 2008-11), and quite another to steer Serbia through the current economic storms. The first review of the stand-by agreement with the IMF approved in September 2011 is due soon, and this would present Dačićwith the challenge of taking the IMF prescription of getting hold of public debt and reining in a fiscal deficit that is currently at 4.1%. This would be a bitter pill for his core support of pensioners and rural dwellers to swallow. Rebalancing the economy and implementing structural reforms to spur growth may turn out to be far more challenging than either reciting the Brussels shibboleths or being constructive on Kosovo. It is perhaps a sign of the gradual normalisation of Serbia that its core concerns now mirror those of much of the rest of Europe.