Serbian Parliament replaces the country’s central banker

BELGRADE – Serbia’s new Parliament moved on yesterday to replace the central bank governor, in a first show of strength by the prospective conservative-led minority government backed by Slobodan Milosevic’s Socialist Party. The Finance Committee voted to put a motion to remove Governor Kori Udovicki on the agenda of the full Parliament, which is expected to back it today. Former Deputy Governor Radovan Jelasic has been nominated to succeed her. The proposal was supported by committee members of the three parties expected to form the minority government, as well as the once-mighty Socialist Party, whose jailed leader is now standing trial at the UN war crimes tribunal in The Hague. «It is a done deal. I expect Parliament to vote the same way,» said committee chairman Nenad Bogdanovic. Leader Miroljub Labus of the liberal G17 Plus, set to join the government, was quoted as saying it would be a «test whether we really can have a majority in Parliament or not.» His party has long demanded that the appointment of Udovicki last July be canceled because of alleged voting irregularities in Parliament, at the time dominated by reformist rivals. G17 Plus and a monarchist group agreed at the weekend to join a coalition led by the Democratic Party of Serbia of former Yugoslav President Vojislav Kostunica, a moderate nationalist who helped oust Milosevic in 2000. Their decisions signaled the end of weeks of deadlock since an election in December that gave no group of parties a clear majority. Kostunica is expected to be appointed prime minister-designate later this week. Western officials overseeing aid and investment to the impoverished state are worried that such a government would be dependent on the good will of the discredited Socialist Party. The Socialists are not expected to be in the government itself, but the minority cabinet would depend on Milosevic’s supporters to avoid being voted down in Parliament. Jelasic, a member of Labus’s party, said he had accepted the nomination as new governor. He said he would aim to boost market confidence in the dinar currency if elected to the post. Stabilization of the currency was seen as one of the main achievements of the reformers who overthrew Milosevic. But it has lost 7.5 percent against the euro since July on the back of a growing trade gap, which hit $4.8 billion in 2003. «The exchange rate of the dinar will be a great challenge in the long term because of high deficits, little investment and falling privatization receipts,» Jelasic told Reuters. He now heads the Belgrade unit of the German HVB Group. Udovicki has offered to step down after a government takes office, saying an earlier resignation would hurt the bank’s credibility. While she was in office, inflation reached a relatively low 7.6 percent in 2003, below a 9.0 percent target. Feuding among reformist politicians who toppled Milosevic blocked formation of a majority pro-reform coalition. The ultranationalist Radical Party topped December’s poll on a wave of widespread discontent with three years of Western-style political and economic change, but did not win enough support to form a government and has no allies.