Sep 12, 2014 - 13:02

Sept. 12 (Bloomberg) -- Kosovar Prime Minister Hashim Thaci is sticking to his ambition of leading the six-year-old country for a third term following inconclusive snap elections, extending a political deadlock in one of Europe’s poorest state.

The former rebel Kosovo Liberation Army leader’s Democratic Party of Kosovo is battling to stay in power against a bloc of challenging parties after he won just 37 of parliament’s 120 seats in the June ballot. He’s now insisting that other parties bow to a Constitutional Court ruling that his party name the assembly’s speaker before proceeding with the process of forming a government.

“I remain confident that party leaders will put the country’s interests first and agree to a solution which will allow for new institutions to be established,” Thaci, a graying 46 year-old, said in an interview at his government office in Pristina, the capital, yesterday. “This political stalemate will not have an impact, but if it drags on, question marks will arise. We have no time to lose.”

The standoff is threatening to stall development in the country of 1.8 million, Europe’s newest state since it became independent from Serbia. Kosovo wants to sell state assets and attract foreign investors to strengthen a $7 billion economy that depends on foreign aid and remittances and where living standards are about a 10th of the European Union average, according to the World Bank.

Constitutional Clash

Thaci, in power since 2008, has pledged to continue working to improve ties with Serbia and push on with selling state assets. He also wants Kosovo to join the European Union. That aspiration may be hampered by the 28-member bloc’s intention to file charges against Kosovo Liberation Army leaders for crimes against humanity and ethnic cleansing during the country’s 1999 war with Serbia.

Talks to form a government ground to a halt in July, when the Constitutional Court struck down a vote naming former Pristina mayor Isa Mustafa, whose Democratic League of Kosovo is in the bloc challenging Thaci, as speaker of parliament.

Under the constitution, President Atifete Jahjaga must first ask the biggest party in parliament, in this case Thaci’s, to form a government, only after the appointment of the speaker and the formation of parliamentary institutions.

Once the clock starts, Thaci will have 15 days to name a cabinet and win a confidence vote before the mandate passes to a second pick, which could again be Thaci. If he succeeds in luring away dissidents from other parties, including from the challenging block, he may then be able to muster a big enough vote to form a majority, said Naim Rashiti, a political analyst and director of the Balkans Policy Research Group, a think-tank in Pristina.

Protracted Stalemate

Even still, there’s no deadline on how quickly parliament must be formed or the speaker voted in, meaning the deadlock may continue indefinitely.

“I see no government a for a few months at least,” Rashiti said in an interview. “Thaci’s party will insist on electing the speaker, and with this secure the votes for the government, while the opposition bloc will refuse to give votes to the candidate from Thaci’s party.”

The challenging coalition, which also includes the Alliance for the Future of Kosovo of Ramush Haradinaj, wants to form its own government. Lacking a majority with only 47 votes, it elected Mustafa with the help of minority parties including a Serb faction that has since withdrawn its support when the main parties invited the ethnic-Albanian Self-Determination Movement, which opposes any talks with Serbia.

Organ Trafficking

Thaci has come under pressure because of accusations, including in a 2010 probe by the Council of Europe, of being “heavily” involved in organ trafficking with Serb prisoners during the 1999 conflict. He’s denounced the charges as a fabrication designed to smear Kosovo’s leaders.

The war ended when NATO intervened and drove out Serbian troops from Kosovo, which Serbia still considers the cradle of its culture. Kosovo has won recognition for its independence from 23 out of the EU’s 28 members. Serbian Foreign Minister Ivica Dacic said on Sept. 5 in Belgrade that his country won’t sign a peace treaty or recognize Kosovo, a stance shared by its major international ally Russia.

“Non-recognition does not mean that we should not normalize relations,” Thaci said. “It’s important to continue the implementation of the full agreement and move to the second phase to make a peace treaty between two countries, without the need of mutual recognition from Serbia.”

Jobs Pledge

The economy of the landlocked Balkan country is set to expand around 4 percent this year, according to the International Monetary Fund, which concluded a $141 million loan program in December.

Thaci wants to move about 1.5 billion euros of cash into the country that he says are now placed outside it and pledged to create hundreds of thousands of jobs, which would represent a huge boost in a country that the World Bank estimates had 31 percent unemployment in 2012.

“I am determined to move the country forward through the vision I have presented, to open 200,000 new jobs, for economic development, for the European perspective and of NATO,” Thaci said. “I am optimistic that we can achieve that as well as improve the wellbeing of our citizens.”