Serbia Government

Addressing the parliament on Monday, July 7, former Finance Minister Mirko Cvetkovic, who has been appointed by President Boris Tadic as prime minister of the new administration, said Belgrade would seek to improve relations with the United States after cooling them in protest at Washington's support for Kosovo's split from Serbia.

Still, he said the country would not recognize the independence of Kosovo, although it is charting a path toward the EU.

"Full-fledged EU membership is the core interest of the Republic of Serbia and its citizens," he told the parliament.

"Therefore, one of the first moves of the new Government will be to submit the Stabilization and Association Agreement (SAA) to the National Parliament for ratification," he said.

On the eve of the May 11 polls the EU signed the SAA with Serbia, providing a boost to the pro-European bloc. But both sides have yet to ratify the accord, which is considered the first step towards full membership in the 27-member bloc.

"The government's main objective is for Serbia to gain EU candidate country status by the end of this year or by the beginning of next year, through the acceleration of economic and other reforms envisaged by the SAA."

Brussels has already said it would support Serbia's new government.

However, before progress can continue towards EU membership, Belgrade must arrest war-crime suspects still on the loose -- something the Socialist Party (SPS) has vowed to block.

Kosovo sticking point

Serbia has downgraded diplomatic relations with all the nations -- more than 40, including leading Western powers -- that have recognized Kosovo since it declared independence in February.

Virtually all major Serbian leaders said they would never recognize Kosovo, viewed by Serbs as their heartland.

Economically, Cvetkovic has to deal with stalled reforms, bloated spending, an overrated national currency and rising prices, all complicated by endemic corruption.

Cvetkovic singled out the fight against corruption as one of his priorities, like most of his predecessors. Neither the Socialist Party heads of government from 1990-2000 nor those from the Democratic Party (DS) from 2000-2004 have a good track record on this issue.

Difficult tasks ahead

Cvetkovic now plans to lead a cabinet of 27 members, the largest since Slobodan Milosevic's last government, ruling until 2000.

The ruling coalition was forged between pro-European President Boris Tadic's Democratic Party and Milosevic's Socialist Party, along with several ethnic minority representatives.

The Democrats had been fierce opponents of the Socialist Party since 1990, when it Slobodan Milosevic led it and the country into war and international isolation.

Politically and diplomatically, the new authorities face the difficult task of reconciling the aspiration of the majority in Serbia for the country's membership of the European Union with the hurt over Kosovo's secession, which followed a nod from the West.

The opposition has accused the coalition of lacking a clear game plan. Critics have said the reason for this is that the real goal of the unlikely bedfellows -- the Democrats and the Socialists -- is to keep the ultra-nationalists lurking in opposition.

If that is the case, the new government might make gestures that would prolong its stay in power, while avoiding hard decisions that would reap long-term benefits, such as cutting national spending or capturing the war criminals still at large.