* Former ultranationalists riding high in polls
* Decision due after start of EU accession talks
By Aleksandar Vasovic
BELGRADE, Jan 16 (Reuters) - Serbia will hold a snap parliamentary election in March as the co-ruling Serbian Progressive Party (SNS) seeks to cash in on rising poll numbers, the Politika daily reported on Thursday.
A spokesman for the government declined to comment on the report, which follows weeks of mounting speculation that the Balkan country is heading for a second election in less than two years as the coalition tussles over the pace of economic reform and a battle to root out corruption.
Economy Minister Sasa Radulovic, a SNS appointee, told the Reuters Global Markets Forum chatroom on Tuesday that if the coalition shirked tough reforms, "it's better to have elections as soon as possible".
Politika, citing multiple government sources, said President Tomislav Nikolic would call the election at the end of January for March 16, when a municipal ballot in the capital, Belgrade, is also due.
A March poll may complicate loan negotiations with the International Monetary Fund, expected to begin within weeks. But analysts say a strong win for the SNS could make economic reforms easier in the long run.
The SNS is riding high in opinion polls, thanks largely to the personal popularity of party leader and deputy Prime Minister Aleksandar Vucic.
A former ultranationalist rebranded as a pro-Western reformer, Vucic is the face of a high-profile anti-graft campaign that is proving popular with Serbs weary of years of endemic corruption and deep-rooted organised crime.
The SNS is expected to take a decision on elections at a meeting on Jan. 25, four days after the official start of membership talks with the European Union.
"There's no doubt what's better for the SNS when we look at the interests of the party," Nebojsa Stefanovic, a senior party official and parliament speaker, told the Serbian daily Vecernje Novosti. "My position is clear and I have repeatedly said we need an early parliamentary vote."
Reached by Reuters, Stefanovic said: "It's not up to me as parliament speaker, and the party has not taken a position yet."
TOUGH ECONOMIC REFORMS
SNS officials are playing up alleged tensions between the party and its main coalition partner, the Socialists of Prime Minister Ivica Dacic.
Dacic denies any rift and has repeatedly said he is against an early election, which looks likely to return a big win for the SNS and could see the Socialists pushed into opposition.
Asked about the report, a senior Socialist official told Reuters: "Elections aren't necessary. We believe the government is working well, but the Socialist Party is not afraid of elections."
The SNS emerged in 2008 from the Serbian Radical Party, an ultranationalist party that held power with the Socialists of late strongman Slobodan Milosevic during Serbia's 1999 war with NATO over Kosovo. Both the SNS and the Socialists have since embraced a pro-EU path.
Vucic says Serbia needs a complete overhaul of its bloated public sector and pension system.
But a 2014 budget adopted in December shied away from the harshest measures to rein in a deficit set at 4.6 percent of output, fuelling speculation that the SNS had an eye on a possible early election.
Our Standards: The Thomson Reuters Trust Principles.
