* Analysts predict protests, govt looks vulnerable
* Any IMF deal seen coming with tough conditions
By Ivana Sekularac
SUBOTICA, Serbia - The washing powder and jars of Nutella on sale at this open market made it here from Hungary in the trunk of someone's car like they did in the war-torn 1990s.
That trend had waned since international sanctions were lifted from Serbia after the Yugoslav wars, but has roared back since the global crisis hit the Balkans.
And it is a sign of strain on this emerging economy, where the government has asked for a huge international bailout, inflation and unemployment have surged, and analysts fear a resurgence among nationalists that would have Belgrade turn away from its stalled European Union bid and cosy up to Russia.
"I can barely make a living," said a middle-aged woman who refused to give her name for fear that police would seize her stock. Like others at the market, she buys goods in Hungary, gets the VAT back at the border and resells them in Serbia.
Like elsewhere across the region, a collapse in western European demand has hit exports and caused tens of thousands of job cuts since December. Unemployment is in double digits and the economy shrank three percent in the last quarter of 2008.
Political pundits expect public anger to boil over as it already has in Latvia, Bulgaria, Greece and other places where anti-government protests have turned violent. They also say it may put the government under pressure to resign.
"In the autumn we are going to see people on the streets, looting. People will be hungry and angry and we can expect something similar to the riots in Greece," said Milan Nikolic, an analyst with the independent Centre of Policy Studies.
"There will be two possible solutions to that situation -- (an early) election or a government of national unity. And I am afraid that the government of national unity will not be an option because of big differences among political parties."
IMF HELP
Serbia has gone to the International Monetary Fund to ask for 3 billion euros in aid, topping up a loan it originally said was only for "precautionary" reasons last year.
Other states, including EU member Romania are also lining up for IMF cash. Ukraine, Serbia and Belarus have already landed deals with the Fund, along with EU states Hungary and Latvia.
Some policymakers expect that group to widen, and this week Serbian central bank Governor Radovan Jelasic said the EU should throw its weight behind struggling aspirants to the bloc.
"I am willing to bet that the majority of CEE countries will have an IMF programme by the end of this year, as no other institution is as ready to provide the urgently needed support," he wrote in the Financial Times this week.
"The EU should quickly come up with transparent and tangible support for CEE countries. Our local government initiatives should be matched by funds from the EU."
Analysts expect Serbia's IMF deal to come with difficult conditions, including cuts to spending on public sector wages and pensions, which account for two-thirds the budget.
Serbia's government also wants an injection of optimism, at least on the political front and is lobbying Brussels for a fast track to EU membership.
The pro-EU parties say help from Brussels is key to avoiding new elections that could bring a nationalist government into power. But independent political analyst James Lyon said an impasse would exist until Belgrade forms a clear crisis plan.
"The Serbian government is responding like a deer caught in the headlights," he said. "The opposition on the other hand is being silent because they don't have a plan either, but would like to sit and watch the government make all these unpopular moves, then come in and pick up the pieces."