The Serbian Progressive Party led by Aleksandar Vucic won an outright parliamentary majority in a general election on a pledge to fight graft, fix the economy and join the European Union by 2020.

Vucic’s party, which forced the ballot two years earlier than scheduled, won 48.8 percent, more than polls predicted, for 157 of the chamber’s 250 seats, Serbia’s independent election monitor said today. Prime Minister Ivica Dacic’s Socialist Party received 14 percent, for 45 seats, said Marko Blagojevic, director of monitor the Centre for Free Elections and Democracy, citing preliminary results.

Vucic, who was once an ally of late Balkan strongman Slobodan Milosevic, pledged to embrace painful austerity measures endorsed by the International Monetary Fund and make Serbia the third former Yugoslav republic to join the EU two decades after the bloody Balkan civil wars. He said he will “extend a hand” to other parties before forming a new government by May 1.

“I’m sure that Serbia will continue its European path,” Vucic told a media briefing after his party declared victory. “We are ready for that kind of dialogue with all the relevant political parties.”

Five more parties, including three representing ethnic minorities, crossed the minimum vote threshold to make it into parliament. Final official results will be announced by March 20, according to the Election Commission.

Milosevic Association

Vucic has promised billions of dollars worth of investment from the United Arab Emirates to create jobs in an economy which has the same number of active workers and pensioners and where one in four is unemployed. EU accession also promises to raise living standards and economic output per capita, which at 36 percent of the trading bloc’s average, trails that of poorest member Bulgaria, according to Eurostat.

The election victory gives the Progressives the strongest lock on power by a single party since the communist days. President Tomislav Nikolic and central bank Governor Jorgovanka Tabakovic are senior members of the Progressives.

Vucic’s critics fear a tendency to wield a powerful hand over institutions may give him too much influence in a country that has received criticism from the EU for weak rule of law and selective justice.

“A great dominance of a single party in a relatively young democracy like Serbia can be dangerous, since they want to control all segments,” Sonja Licht, an analyst at the Belgrade Fund for Political Excellence, said today by phone.

EU Turnaround

Once a prominent member of the Radical Party led by Vojislav Seselj, a ruling partner of Milosevic who is now awaiting a Hague court verdict on charges of war crimes and crimes against humanity, Vucic is trying to shake off associations with his past.

He supports membership in the EU, a turnaround from the years when he and his political partners resisted EU demands to give up suspected war criminals, renounce claims on Kosovo, a former province that declared independence, and bring the judiciary into line with EU norms.

Yields on Serbia’s 2021 dollar bond rose 3 basis points, or 0.03 percentage point, to 5.57 percent by 2:44 p.m. on March 14 in Belgrade, data compiled by Bloomberg show.

The elections are “all very much positive for Serbian credit,” Abbas Ameli-Renani, a strategist at Royal Bank of Scotland Group Plc, said by e-mail on March 14. “All the positive news is already priced in at this stage and I don’t expect any further relative tightening of Serbian yields.”

Anti-Corruption Drive

Vucic pledged “a dramatic decline in the number of unemployed people” half way through the next government’s four-year mandate. He also vowed to wage a “decisive fight against corruption.” Widespread graft has left Serbia trailing behind its former Yugoslav federation partners and neighboring EU members Romania and Hungary in Berlin-based Transparency International’s 2013 corruption perception rankings.

Supporters also have expectations that his economic plans may help the Balkan state catch up with richer ex-Yugoslav states Slovenia and Croatia, both EU members.

“He’s the last chance to push through the reforms that we need to do for the EU,” said Zlatko Lenhart, 44, a clerk in a Belgrade municipality office. “I believe he can do it.”

Public Debt

Serbia’s new government will inherit an economy that the central bank expects to grow 1 percent this year. Serbia’s 2014 budget targets a fiscal deficit of 7.1 percent of gross domestic product. It will need to narrow the gap further and cut public debt by 2016 to meet commitments to the IMF, which suspended a loan in 2012.

The next government needs to focus on fixing its pension system and labor market, overhauling failing state-owned enterprises and cleaning up public finances, unpopular measures that if not done quickly may turn public opinion against it.

“The Progressives alone can pass any law in parliament and, with one more smaller party, they can have a two-thirds majority in parliament to also change the constitution,” Milan Culibrk, editor in chief of NIN weekly magazine, told reporters today. “After these elections, no one else will have an alibi not to implement reforms.”