Montenegro, the smallest of ex-Yugoslavia's republics, appears headed for full independence after voters narrowly approved secession from a loose union with Serbia. Regional experts say Serbia and the U.N.-run Kosovo are most likely to feel the impact.
Montenegro will now revert to the full independence it enjoyed for a 40-year period between 1878 and the formation of Yugoslavia in 1918. Located in a mountainous region extending inland from the Adriatic Sea, Montenegro's population is less than 700,000.
James Lyon, the Belgrade representative of the International Crisis Group, says Montenegro's rejection of ties with Belgrade is certain to have a strong psychological impact in Serbia.
"Now we've had Slovenia, Croatia, Macedonia, Bosnia, Kosovo and now we're actually having a republic that is comprised of Serbs turn its back on us [Serbia], saying we don't want to be part of you," said James Lyon. "This is actually quite a serious psychological blow."
Serbs and Montenegrins were often regarded as one people and share the same language and orthodox Christian religion. Lyon says while the impact on Serbian politics can't yet be measured, Montenegro's vote will embolden Albanians in Kosovo, which is also seeking independence from Serbia.
Dan Serwer, the Balkans project director at the U.S. Institute of Peace in Washington, says the referendum's impact extends beyond Montenegro.
"The psychological effect on the internationals and on the region is considerable as well, for if Montenegro can't stay in a common state with Serbia, you know, it's pretty obvious that people who share so little with Serbia as Kosovo Albanians might not be able to either," said Dan Serwer.
The European Union praised Montenegro's conduct of Sunday's vote and said it would recognize the result.
EU foreign policy chief Javier Solana was the principal architect of the loose union of Serbia and Montenegro that was formed in 2003. Under the deal, either side could vote for independence as early as March 2006. The EU set a high threshold for independence, insisting that at least 50 percent of eligible voters must cast ballots and no less than 55 percent of those must vote for independence.
Lisa McClain, the Podgorica representative of Washington's National Democratic Institute says the next step is technical negotiations with Belgrade to wrap up the affairs of the state union.
"They're about dividing up the debt, dividing up the gold, dividing up other things like that," said Lisa McClain. "Then there's working out agreements on what to do about citizenship for people who live in Serbia who are Montenegrin citizens, and what are we going to do about our borders?"
McClain sees no reason that these technical negotiations couldn't be complete by July 13, the date that the Montenegrin governments hopes to declare independence.
Montenegro's prime minister Milo Djukanovic says his immediate objective is to win a pre-accession accord with the European Union, develop a positive relationship with Serbia and achieve ethnic harmony inside Montenegro.