S&P lowers Serbia

NEW YORK (Reuters) – Standard & Poor’s has revised its outlook on Serbia to negative from stable, saying the collapse of the government of Prime Minister Vojislav Kostunica will likely bring political instability to the country. Kostunica’s 10-month-old government was dissolved on Monday due to disagreements over his handling of the political crisis caused by Kosovo’s unilateral declaration of independence in February. President Boris Tadic is now expected to set May 11 as the date for early elections, which should be the most important since voters ended the era of the late autocrat Slobodan Milosevic in 2000. The vote will be a close race between the Democrats and the nationalist Radicals, the strongest party, which oppose integration with the European Union after the bloc largely supported Kosovo’s independence. «Outrage over the loss of Kosovo in the wider population may lead to a new government dominated by the radicals,» the ratings agency said in a statement. «This would negatively affect Serbia’s EU prospects, which have hitherto been a key supporting factor for its sovereign rating.»

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