In October 2000, a coalition of democratic parties defeated Serbian strongman Slobodan Milosevic in presidential elections, overturning a regime that had plunged the country into bloody conflicts in the region, economic decline, and international isolation in the 1990s. The country's new rulers embarked on a transition toward Western democratic and free market standards, but success has been uneven. Serbia has held largely free and fair elections, according to international observers. A new constitution adopted in 2006 marked an improvement over the earlier, Socialist-era one. However, the global economic crisis dealt a setback to Serbia's economy. Organized crime and high-level corruption remain very serious problems. Serbia has set integration in the European Union as its key foreign policy goal, but its prospects have been clouded by concerns of some EU countries that it has not done enough to normalize relations with its former Kosovo province, which declared independence in 2008. U.S.-Serbian relations, although positive in many respects, have also been negatively affected by the leading role played by the United States in promoting Kosovo's independence. Serbia's most recent parliamentary, presidential, and local elections were held on May 6, 2012. In the parliamentary vote, a coalition of parties led by the nationalist Serbian Progressive Party (SNS) won 73 seats in the 250-seat Serbian parliament. A pro-EU coalition led by the Democratic Party (DS) won 68 seats. In the biggest surprise of the vote, a coalition led by the Socialist Party of Serbia (SPS) won 45 seats, significantly more than expected. The strongly nationalist Democratic Party of Serbia (DSS) won 20 seats, as did a coalition led by the Liberal Democratic Party, which favors a less nationalist approach than the DS. The United Regions of Serbia group won 16 seats. Most of the remaining seats were won by representatives of national minorities. In the presidential election, outgoing President Tadic of the DS faced Tomislav Nikolic from the SNS, as well as candidates from smaller parties. Tadic took first place with 26.7% of the vote. Nikolic came in a close second with 25.5%. The other candidates trailed far behind. As no candidate received a majority, a runoff election was held between Tadic and Nikolic on May 20. In a result that surprised almost all observers, Nikolic defeated Tadic, winning 49.55% to Tadic's 47.3%. Voter turnout was 46.37%. Analysts believe that Tadic's defeat may have been due to low turnout among his supporters, some of whom may have wished to punish him for the poor economic situation in the country and persistent government corruption. The powers of the Serbian presidency are modest, but the presence of the Progressives in the government will likely strengthen his hand greatly. Until a few years ago, Nikolic held extreme nationalist views, but he has moved closer to the center and now advocates stances close to those of the DS, including on European Union membership. Negotiations on forming a new government were difficult. At first, it appeared that former President Tadic would head the new government as Prime Minister, renewing the DS's alliance with the Socialists. However, these efforts failed, and the Socialists decided instead to form a government with the Progressives and the United Regions of Serbia. Unusually, despite having secured many more seats that the Socialists, the Progressives ceded the position of Prime Minister to Socialist leader Ivica Dacic. Indeed, some observers assert that this was a key reason, among others, for the Socialists' switch of alliances. Aleksandar Vucic, who became acting leader of the Progressives after Nikolic became President, is Defense Minister, and also oversees the intelligence services. The Foreign Minister is Ivan Mrkic, a career diplomat who served as ambassador to Cyprus during the regime of Serbian strongman Slobodan Milosevic. The speaker of the Serbian parliament is Nebojsa Stefanovic, from the Progressives. The Serbian parliament approved the new government on July 27, 2012. The continuing economic crisis in Serbia remains the key problem for the government, one lacking an easy solution. However, the government boosted its popularity (and especially that of Vucic) by launching an anti-corruption drive. The campaign has implicated former and current government ministers and Miroslav Miskovic, a prominent businessman with powerful political connections. Observers have lauded the government's first steps in fighting corruption, but caution that the rule of law must be preserved in all investigations and trials. Moreover, they note that it will be at least as important to institute lasting changes in the current political and legal systems to make corruption less likely to occur in the future. Another political controversy in Serbia has been the powers of the autonomous region of Vojvodina in northern Serbia, with some local authorities (often affiliated with the opposition in Belgrade) demanding more powers, and the central government wishing to keep a tight rein on the province. Serbia has faced some problems with the Presevo Valley region in southern Serbia. This ethnic Albanian majority region bordering Kosovo has been relatively quiet since a short-lived guerrilla conflict there in 2000-2001 between ethnic Albanian guerrillas and Serbian police, in the wake of the war in Kosovo. However, there have been sporadic incidents and problems since then, some resulting in injuries to Serbian police. Local Albanians claim discrimination and a lack of funding from Belgrade. Some local ethnic Albanian leaders have called for the region to be joined to Kosovo, perhaps in exchange for Serbian-dominated northern Kosovo. The United States and the international community have strongly opposed this idea. After the signature of an agreement between Serbia and Kosovo in April 2013, ethnic Albanian leaders in the Presevo valley have demanded the same rights for their area as Serbs in northern Kosovo would receive from the agreement. Until the global economic crisis hit in late 2008, Serbia experienced substantial economic growth. This growth was fueled by loose monetary and fiscal policies (in part keyed to election cycles), including increases in pensions and public sector salaries. The international economic crisis had a negative impact on Serbia's growth, and recovery has been slow due to continuing weakness in the EU, which is Serbia's main export market. After a decline of 1.7% in 2012, the International Monetary Fund expects Serbia's real Gross Domestic Product (GDP) to rise by 2% in 2013, and by the same percentage in 2014. Serbia's unemployment rate in 2012 was 23.1%, and will likely remain very high for the foreseeable future. Serbian net salaries are low, at roughly $488 a month in March 2013. Serbia's currency, the dinar, has depreciated sharply as a result of the economic crisis. This has aggravated inflation, leading the central bank to keep a tight rein on the money supply. Serbia is seeking a precautionary loan arrangement with the IMF. Serbia might not need to draw on the loan, as it has been successful in borrowing in the Eurobond market, but the loan agreement would signify IMF approval for Serbia's policies. This could keep the costs of borrowing in private markets relatively inexpensive and could encourage foreign investment. However, the IMF wants Serbia to make more credible efforts to cut its budget deficit and public debt before it commits itself to a new program. The economic crisis has caused a drop in foreign direct investment in Serbia. In early 2012, international investors sold their stakes in two key Serbian firms to the government. US Steel sold the Smederovo steel works, the country's largest exporter, to the Serbian government for the nominal price of $1. Declining steel prices and heavy competition made the plant unprofitable. The Serbian government bought the steel works to prevent large job losses, and hopes to resell it to another international investor. The Serbian government also bought the Greek telecom company OTE's 20% share in Telekom Srbija, with hopes of selling a stake in the company to a strategic investor. Serbia's budgetary problems have resulted in increased pressure from the IMF to privatize inefficient state-owned firms, whose losses amount to 2.5%-3.5% of GDP. However, the Serbian government has been reluctant to do so, fearing an increase in unemployment. One of Serbia's most difficult political and foreign policy challenges in recent years has been its relations with its former Kosovo province. Belgrade strongly opposed Kosovo's declaration of independence in February 2008. Serbia won an important diplomatic victory when the U.N. General Assembly voted in October 2008 to refer the question of the legality of Kosovo's declaration of independence to the International Court of Justice (ICJ). However, Serbia's diplomatic strategy suffered a setback when the ICJ ruled in July 2010 that Kosovo's declaration of independence did not contravene international law. After the ICJ ruling, under strong EU pressure, Serbia agreed to hold talks with Kosovo under EU mediation. The dialogue, which began in March 2011, at first focused on technical issues, although it has been difficult to separate technical issues from the main political one—Kosovo's status as an independent state. In an effort to make better progress in the talks, talks were moved to a higher political level in October 2012, when Prime Minister Dacic and Kosovo Prime Minister Hashim Thaci met. Such meetings became a regular feature of the negotiations in the following months. The technical agreements reached so far have included ones on free movement of persons, customs stamps, mutual recognition of university diplomas, cadastre (real estate) records, civil registries (which record births, deaths, marriages, etc. for legal purposes), integrated border/boundary management (IBM), and on regional cooperation. Implementation of most of these accords has lagged. A technical protocol on IBM went into effect at the end of 2012, with the opening of several joint Kosovo/Serbia border/boundary posts.