New Serbia cabinet to press EU bid, tackle economic woes

Serbia's new centre-right coalition government led by Prime Minister Aleksandar Vucic was sworn in on Sunday, expected to push the country's EU membership bid and urgently tackle the ailing economy. Vucic, leader of the centre-right Serbian Progressive party (SNS), was given a mandate after a landslide victory in March elections called after Serbia began EU membership talks in the wake of a landmark accord with breakaway Kosovo last year. Out of 228 deputies present at the SNS-dominated parliament, 198 MPs voted for Vucic's cabinet, 23 were against it and seven abstained. "I am ready to undertake the implementation of reforms as I am convinced that if things remain the same, the consequences will be catastrophic," Vucic told parliament. In his three-hour speech before the vote, Vucic said the priority of his 19-member cabinet would be the reform of Serbia's outdated economy, the reduction of the budget deficit and moves to accelerate Belgrade's bid to join the European Union. "The EU is not an ideal union, but it is the best union of the states that exists nowadays and we belong there," Vucic said. "If we work hard, I am convinced that Serbia can become an EU member by the end of this decade," he said. - Belgrade to resume talks with Kosovo - Vucic will discuss the first moves of his cabinet with EU foreign policy chief Catherine Ashton, who will visit Belgrade on Monday. High on the agenda will be the resumption of talks with Pristina on a further normalisation of relations between the two former foes, a key condition for Serbia's EU membership hopes. Vucic said he would personally lead Belgrade's delegation in the EU-sponsored talks with Pristina, expected to continue in coming weeks. Serbia -- the largest country to emerge from the break-up of Yugoslavia in the 1990s, with a population of 7.2 million people -- has to reform antiquated labour and other economic laws and cut down on bureaucracy. More than 20 percent of the workforce is unemployed, and those with jobs struggle to survive on an average monthly salary of 350 euros ($480). - Heavy burden of reforms - The new government will have to push through a stringent austerity package, including the privatisation of more than 150 state-owned companies, along with subsidy cuts and tax increases. "These reforms have been put off for too long and they are more than necessary if we want to avoid a Greek scenario," Vucic said. He called on the deputies to "eat and sleep in parliament" in order to adopt a series of reform laws to replace labour regulations that have hampered fresh investments. "The burden is extremely heavy and I am shaking like a leaf faced with the responsibility," said Vucic. The 44-year-old once had the reputation of an ultra-nationalist hawk but he reinvented himself as a pro-European anti-corruption campaigner. The SNS owes its popularity largely to Vucic's high-profile anti-graft drive that led to the arrest of several tycoons and former ministers. Vucic invited his former coalition partners, the Socialists, founded by late Serbian strongman Slobodan Milosevic, to join the government. Socialist leader and former prime minister Ivica Dacic holds the post of foreign minister. Yale graduate Lazar Krstic remains finance minister, while former World Bank expert Dusan Vujovic was named economy minister. Serbia's first female governor and former IMF expert Kori Udovicki will be in charge of the public administration. The opposition has brushed off Vucic's plans as "populist and full of empty promises". "We haven't heard any real and detailed plans for these changes," said opposition leader Borko Stefanovic of the centre-left Democratic party. Vucic said the government would revise the budget in June in a bid to maintain the deficit at already announced seven percent of GDP. It is one of the main conditions set by the International Monetary Fund to approve a new loan.