Tomislav Nikolic of the extreme right-wing nationalist Serbian Radical Party (SRS) won the first round of the voting in the January 20 Serbian presidential elections. The SRS, which formed a coalition with former president Slobodan Milosevic’s Socialist Party during the 1990s in the period leading up to the West’s dismemberment of Yugoslavia, is the largest party in the country. Its president, Vojislav Seselj, is presently being tried for war crimes at the International Criminal Tribunal for the former Yugoslavia (ICTY) at The Hague.

The elections have been marked by an unusually high turnout and polarisation of the vote. Nikolic won 40 percent to beat current pro-Western president Boris Tadic, who heads the Democratic Party (DS) and received 35 percent. Because no candidate won more than 50 percent, a second round between Nikolic and Tadic will take place on February 3.

The result overturned opinion polls that predicted 21 percent for Nikolic (and 19 percent for Tadic) and smashed the conception held by many political analysts that there was a “glass ceiling” to Nikolic’s support that would prevent him ever getting more than 30 percent.

The votes for the top two candidates came at the expense of the seven other candidates who stood. It was a particularly disastrous result for Serbian Prime Minister Vojislav Kostunica and his Democratic Party of Serbia (DSS), which backed Infrastructure Minister Velimir Ilic as candidate for the DSS-led Popular Coalition. He came a distant third with just 8 percent of the votes. Just one year ago, the DSS won 17 percent of the vote in parliamentary elections, leading to its participation in a coalition government with the DS.

Kostunica has prided himself on attempts to balance between Tadic and Nikolic, supporting membership in the European Union (EU) with a more managed economic “transition” and a concerted appeal to nationalist resentment over the issue of Kosovan independence.

However, the main issue facing the Serbian working class and peasantry is the terrible social crisis. According to Balkans analyst Patrick Moore, “Voters are likely to be swayed not just by Kosovo and other nationalist issues, but by their economic concerns and how they perceive Tadic and Nikolic as being able to deal with them.” He points out, “Serbia has a very high poverty rate, and even those who are above the poverty line often have difficulties making ends meet.”

And the future looks even bleaker. Inflation is rising, and the DS-DSS government is planning to privatise a whole cluster of state assets, which will throw tens of thousands out of work.

Central bank governor Radovan Jelasic has warned about an inflation rate of 10 percent—“substantially overshooting” the forecast 6.5 percent. Serbian Minister of Economy and Regional Development Mladjan Dinkic has attempted to deflect hostility to the privatisation of the power company Elektroprivreda Srbije, airline company Jat Airways, telecommunications provider Telekom, the Yugo car company, medical suppliers Galenika and the Nikola Tesla Airport by announcing that from January 28 Serbian citizens can apply for free shares worth €1,000.

The social crisis, uncertainty over Serbian EU membership and the West’s push for Kosovo independence have created a crisis for Serb politicians like Tadic who played a vital role for the West in ousting Slobodan Milosevic.

Tadic has made EU membership a key point of his campaign, claiming that the economic and social hardship facing the Serbian people can be offset through EU integration. He points to the fact that Italy and Germany are Serbia’s biggest economic partners, worth about US$2.5 billion a year in trade. Tadic has tried to argue that the status of Kosovo and Serbia’s integration into Western institutions are two separate issues, but few believe it when he says, “We will never give up our European goal or our Kosovo goal.”

His position is undermined by the virtual certainty of a declaration of Kosovo independence soon after the Serbian elections, which the US and EU will recognise. There have also been growing calls from within the EU that the process of enlargement be curtailed with no guarantee that Serbia will be admitted. And more fundamentally, closer ties with the EU are dependent on the further impoverishment of the Balkan peoples as the structural reform programme demanded by the international financial institutions is escalated.

During the election campaign, the EU tried to boost support for Tadic by raising once more the prospect of fast-track Serbian membership in the bloc. In the run-up to the first round of the contest, it announced the possibility of a Stabilisation and Association Agreement (SAA) being signed at an EU foreign ministers meeting on January 28-29 as a first step towards membership. “We should...help Serbia on its approach to the European Union,” Slovenian Foreign Minister Dimitrij Rupel said last week. “One of the forms of such assistance, or a sign of closeness, should be a signature of [the] SAA in the coming days.”

However, some member states are opposed to any deal before the ICTY says that Serbia is fully cooperating with it. The Netherlands is particularly adamant that Ratko Mladic, the Bosnian-Serb general indicted for war crimes relating to the massacre of several thousand Muslims in the Bosnian town of Srebrenica in 1995, be handed over before an agreement is signed. The country’s international prestige was shattered when Dutch UN peacekeeping troops were shown standing by as Serb militiamen rounded up the victims and marched them off to their deaths.

It now seems unlikely the SAA will be signed in the foreseeable future. But the EU has offered to start negotiations on visa-free travel, and the new chief UN war crimes prosecutor, Serge Brammertz, has postponed another assessment on Serbia’s cooperation with the tribunal until he travels to the Balkans after the elections.

The EU has also tried to cool down the enormous anger resulting from the US drive to establish an independent Kosovo. It has reined in Albanian nationalist demands for immediate independence following elections in the province last November until the Serbian elections are over.

But these attempts have been seen as opportunist manoeuvres, which the SRS has been able to exploit.

Nikolic declared, “For seven years, we have been under the influence of Western Europe. We have done all that was asked of us by the West. That was our mistake. But the EU also made a mistake. They should have given us full membership straight away. Now we have a situation where the Russian Federation is recovering very well, and the EU is depending on Russia for gas. I think Serbia should be the place where Russian and Western power is balanced....”

He condemns “those who mercilessly speak about [how] European and world standards are getting richer by the day, [whilst] Serbia is sinking into hopelessness and desperation.”

In the past, Nikolic has made declarations to the effect that Serbia would be better off as a Russian province than as an EU member and Russia should set up a military base in Serbia to rival the US presence at Camp Bondsteel in Kosovo. Today, as the prospect of power beckons, he tempers these outbursts.

Moscow has also taken advantage of the crisis in Serbia. The US plans for a new missile system, an attack on Iran and an independent Kosovo have antagonised Russia, which has reacted by reasserting itself in neighbouring states that it sees as its spheres of influence. It has backed Serbia’s opposition to Kosovan independence, warning that it contravenes international law and would bolster similar claims by separatist movements elsewhere in the world.

Russia is eager to boost its position in the Balkans, where it competes for influence with the EU and where its companies have invested heavily, particularly in oil and gas pipelines. On January 21, the energy giant Gazprom agreed a multibillion-dollar gas pipeline project with Serbia, which promises to make the Balkan nation a major hub for Russian energy supplies to Europe. The South Stream will compete with the planned European pipeline, Nabucco, and will transport gas from Russia across Bulgaria to Serbia for further distribution. Gazprom also gained a controlling stake in the state-owned Serbian oil company Naftna Industrija Srbije (NIS) and promised to invest hundreds of millions of dollars. Russian companies have already bought a number of Serbian companies, among them the state’s biggest tourist agency, Putnik, and Termoelektro, a large industrial engineering company.

Nikolic has promised to “fight like a lion” to preserve Serbia’s national integrity and use the Serbian police and army to drive the US and United Nations “occupying” forces out of Kosovo. But recently, he has dropped his war-like rhetoric in favour of punitive measures against Kosovo Albanians, declaring, “We’ll stop Kosovo Albanians coming to Serbia. We’ll stop them travelling through Serbia. We won’t recognise their passports...we’ll cut off the supply of goods to Kosovo.”

And on the issue of the ICTY, while Tadic has always insisted that Serbia will cooperate with the tribunal, Nikolic has snubbed calls for the arrest of the outstanding fugitives and threatened to make Vojislav Seselj the prime minister of Serbia should he win the election.

Whatever the final outcome of the election on February 3, neither Mikolic nor Tadic offers a progressive answer to the problems facing the Serbian working class or the intrigues of the imperialist powers. The situation urgently requires the building of a socialist internationalist party of the Fourth International based on the perspective of the United Socialist States of the Balkans.