Nikolic approves Dacic as PM designate - SNS, SPS and URS to form government

(Tomislav Nikolic)

Serbian Socialist leader Ivica Dacic received a mandate on Thursday to form a coalition government with President Tomislav Nikolic's nationalist Progressive Party.

- They have convinced me that they have a parliamentary majority - Nikolic told reporters after handing Dacic the mandate.

- The new government's task is to create a better life for our citizens ... and it must stay on a stable European course - Nikolic said.

The new cabinet, which will also include the pro-business URS party, will have to tackle a budget deficit that by far exceeds the 4.25 percent of gross domestic product level agreed with the International Monetary Fund, public debt of over 50 percent of GDP and unemployment around 25 percent.

It will also have to try to unblock a 1 billion-euro ($1.25 billion) stand-by deal with the IMF that was frozen in February over Serbia's inflated spending and widening debt, and also work hard to win the West's trust.

The Socialists rejected proposals to revive a coalition with Tadic's Democratic Party after seven weeks of talks and instead sided with Nikolic.

- Our coalition had to answer the question whether it will take the responsibility to lead the government ... as the prime minister, I will never make a decision that will be an injustice to Serbia and its citizens - Dacic said after meeting Nikolic.

- I took the responsibility ... and there will be no return to the 1990s - Dacic said.