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FILE PHOTO: Serbian Prime Minister and President-elect Aleksandar Vucic speaks during a rally in Novi Sad, Serbia, March 18, 2017. REUTERS/Marko Djurica/File Photo

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BELGRADE (Reuters) - Serbia's Prime Minister Aleksandar Vucic stepped down on Tuesday, a day before he assumes the country's presidency which he won in a decisive election victory last month.

He announced this in a brief letter of resignation sent to parliament and will take the oath of office on Wednesday to succeed outgoing head of state Tomislav Nikolic.

Vucic, who is also head of the ruling conservative Serbian Progressive Party, is moving to a largely ceremonial post, but he is expected to wield considerable power through his control of the Progressives and their allies in the coalition government.

Until the appointment of the new prime minister, which is expected by mid-June, Serbia's Foreign Minister and First Deputy-Prime Minister Ivica Dacic will serve as the caretaker head of the government.

On Tuesday, Vucic told Reuters Global Markets Forum he will strive to boost economic ties among the countries in the region, most of which are still recovering from armed conflicts of 1990s, with an ultimate goal of joining the European Union.

To join the EU, Serbia, Bosnia, Montenegro, Macedonia Albania, and Kosovo must undertake deep reforms, some of which may take decades. Vucic said that until that happens, the region should create a regional economic alliance.

"That will mean a unique market of 20 million people which will become one of the most important markets on the continent," he said in Belgrade. In addition, he said, "it will economically strengthen our position regarding the EU".

Vucic also said he would try to renew talks about normalising relations with Kosovo, Serbia's former southern province which is predominantly ethnic Albanian and declared independence in 2008, following a bloody war and NATO bombing of the-then Yugoslavia in 1999.

With the backing its traditional ally Russia, as well as several other countries, Serbia remains firmly opposed to Kosovo's independence.

(Reporting by Aleksandar Vasovic and Kirsten Donovan; Editing by Tom Heneghan)

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