Serb rightist wins presidency, backs EU path

BELGRADE (Reuters) - Opposition leader Tomislav Nikolic, last in power when Slobodan Milosevic's Serbia was bombed by NATO in 1999, was elected president on Sunday and pledged to keep the former Yugoslav republic moving towards the European Union.

In a major upset, rightist Nikolic narrowly defeated liberal leader Boris Tadic, ending his eight years as head of state in a tense run-off election in which fewer than half of Serbia's eligible voters turned out.

"There is divine justice," Nikolic told jubilant supporters in the capital, Belgrade. "Serbia will not stray from its European path," he said, directly addressing concern in the West and the region over his hardline nationalist past during the bloody collapse of Yugoslavia.

"This was not a referendum for or against the EU, but to resolve internal problems that were created by Tadic and the Democratic Party."

Tracing the Balkan country's gradual progress from pariah state under Milosevic to EU membership candidate in March, Nikolic has tried to reinvent himself as a modern, pro-European conservative since splitting in 2008 from his firebrand mentor Vojislav Seselj.

The jury is still out; diplomats say the West is encouraged by his apparent conversion to the ultimate aim of taking Serbia into the EU, but they concede uncertainty over the actual substance of his policy or whether he can continue Tadic's work in fostering reconciliation in the region.

Serbia's neighbors in Bosnia, Croatia and Kosovo -- where over 125,000 people died as Yugoslavia collapsed -- were unlikely to welcome Nikolic's victory.

They still firmly associate him with Seselj, who is standing trial for war crimes in The Hague. Nikolic, 60, and Seselj were in government with Milosevic in 1999 when NATO bombed Serbia for 11 weeks to halt the massacre and expulsion of ethnic Albanians by Serb forces.

Like Tadic and most major parties in Serbia, Nikolic says he will never recognize Serbia's former Kosovo province as independent.

Tadic conceded defeat, and challenged Nikolic to prove his commitment to Serbia's EU goal.

"I am appealing to all political factors to preserve Serbia's strategic orientation towards the EU," he told reporters. "It would be a tragic mistake if Serbia were to return to the nineties."

"ELECTION EARTHQUAKE"

The result - 50.2 percent versus 46.8 - ushers in a period of political uncertainty. Serbia is without a government after a parliamentary election on May 6, which Nikolic's Serbian Progressive Party narrowly won.

Tadic's second-placed Democratic Party had been poised to renew a governing alliance with the third-placed Socialist Party formerly led by Milosevic but now by his wartime spokesman Ivica Dacic.

But as president, Nikolic has the right to give the mandate to the largest party - his own.

Dacic said on Sunday the result of the election would not effect his coalition deal with Tadic's Democrats, but negotiations have yet to begin in earnest.

"An election earthquake has struck Serbia," said Vladimir Todoric, head of the New Policy Centre think-tank. "Now the horsetrading will begin, and it's unlikely that the new government will be created before July or August," he told Reuters.

Under the Serbian constitution, the prime minister is more powerful than the president, but the head of state can hold up legislation.

A division of power between Nikolic as president and the Democrats in government could slow reforms needed to revive the stagnating economy and clinch EU accession talks next year.

Like his party in the parliamentary election, Tadic, 54, was punished by voters for an economic slowdown that has seen unemployment reach 24 percent. The Serbian economy is forecast to grow just 0.5 percent this year, pummeled by the crisis in the euro zone, the Balkans' main source of trade and investment.

Tadic was part of the reformist bloc that ousted Milosevic in 2000, but after 12 years in power, many Serbs accuse the Democrats of presiding over a creeping culture of cronyism and deepening government control over the media.

"After all the unfulfilled promises and corruption under Tadic, I believe Serbia needs to be refreshed and that's why I voted for Nikolic," said Miodrag Petrovic, 38.

Nikolic's straight-talking, man-of-the-people manner appeals to rural Serbs and ordinary voters struggling with an average net wage of 380 euros ($480) per month.

Tadic began the day as the frontrunner, but analysts had said a low turnout might favor Nikolic, whose supporters are considered more disciplined voters.

"This is the first time in 25 years that I've decided not to vote," said 44-year-old Belgrade engineer Zoran Momirov. "I'm deeply unhappy with Tadic's policies and the nepotism and corruption of the Democrats and their clique, but I'm equally unhappy with whatever Nikolic has to offer.

(Editing by Diana Abdallah)

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