Long Road Ahead

Serbia hosts the Eurovision Song Contest next week and its entry, an ethno-tinged love song, is considered one of the favorites to win. If only Serbia's path to Europe were that simple for those who want it.

An anti-Western government would mean a setback for the European Union, which invested considerable effort in influencing Sunday's election and urged the next government to pursue "a clear European agenda."

As political leaders began coalition talks Monday, the stakes for regional stability, the EU and ordinary Serbs were high. For Serbia's neighbors, including newly seceded Kosovo, an ultra-nationalist leadership in Belgrade would likely spell a new rush of tension.

For the average Serb, living on $500 a month, the prospect of joining the rich club of European Union nations has obvious appeal.

But the loss of Kosovo and anti-Western resentment rooted in NATO's 1999 airstrikes on Belgrade helped keep hard-line parties in the game. They want to steer Serbia away from the EU in protest of Western support of Kosovo's February declaration of independence.

Some unhappy with nationalist rhetoric

Already, Serbs are contemplating the prospect of a long, uncertain summer of bargaining to form the new government. Who will win -- President Boris Tadic's pro-European bloc, or nationalists who talk of closer ties to Russia -- is anybody's guess.

"It's about fifty-fifty," said James Lyon, a Balkans expert with International Crisis Group, a Brussels-based independent think tank.

Many voters apparently were put off by the anti-Western camp's vicious rhetoric and its echoes of the 1990s, when Serbia fought Balkan wars under the late strongman Slobodan Milosevic, who died while on trial at the war crimes tribunal in The Hague.

After a dirty election campaign that reportedly included death threats against Tadic, his bloc defied pre-election polls and won 39 percent of the vote, to 29 percent for the ultra-nationalist Serbian Radical Party.

Socialists could play pivotal role

But Milosevic's Socialist Party -- itself split between pragmatists and hard-liners -- emerged as the new kingmaker after Sunday's vote.

One scenario making the rounds in Belgrade has Tadic forming a minority government with tacit support by the Socialists.

"We could once again have a government that is very weak, very unstable and very much at the mercy of the natural parliamentary majority -- which is a nationalist majority," Lyon said.

Under the constitution, Serbs have a month to constitute the new parliament and three months after that to form a new government.

Nearly eight years after Serbs toppled Milosevic with mass demonstrations, the West is eager to see Serbia end its drift after the Balkan wars of the 1990s and make decisive progress toward EU membership -- Tadic's main campaign theme.

His camp got a huge boost from the EU over the past two weeks with a pre-membership association agreement and a road map for visa-free travel to Western Europe.

Italy's Fiat added a sweetener with a 700-million-euro ($1.1-billion) investment plan for the moribund Zastava auto factory, which once made the Yugo car but remains a pride of Serbian industry.

Investment dependant on Serbia's path

Like the nationalists, Tadic says he will never recognize Kosovo's independence. But unlike them, he says Serbia still needs to pursue European integration.

"When neighboring governments ... are democratic and pro-European, it will certainly lead to better cooperation in the region," Kosovo's Deputy Premier Hajredin Kuchi told Britain's BBC.

The government in neighboring Macedonia, another ex-Yugoslav country that depends heavily on stability in Serbia, also welcomed the election result.

Foreign investment, critical to Serbia's struggling economy, is also riding on the outcome of the coalition talks. Critics say even Tadic's government has been slow to push through reforms while up-and-coming neighbors like Romania and Bulgaria joined the EU.

"Quickly forming a government would allow [Serbia] to catch up in the second half of the year with the missed chances in the economy, because investors have been waiting for months to see what will happen," former Foreign Minister Goran Svilanovic said.