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EU Takes Lead in Serbia, Montenegro Unity

The European Union has seldom played a leading role in the politics of non-member countries. But for six months, EU officials have been playing the leading role in the effort to hold together Serbia and Montenegro, the only republics remaining in Yugoslavia after four others declared independence, sparking a series of wars.

The old Yugoslavia has been dead for a decade. Serbia's sole partner in what remains of Yugoslavia is Montenegro, a mountainous coastal region with a population of about 600,000 people.

When former Yugoslav President Slobodan Milosevic ruled in Belgrade, western powers encouraged greater autonomy for Montenegro. During the last years of Milosevic rule, Montenegro essentially went its own way. It got rid of the Yugoslav currency and adopted first the Deutschmark and then the euro. It shifted its trade away from Belgrade, and conducted an independent foreign policy.

Last March, the Europeans brokered a new unity agreement. Under the terms of the so-called Belgrade agreement, Yugoslavia will be replaced by a new nation called Serbia and Montenegro. The ties between them will be far looser than they are currently. Should either party wish to opt out of the agreement, it can do so after three years.

Jan Willem Blankert is the European Union diplomat with the job of monitoring progress on the Belgrade agreement. He says the Serbs and Montenegrins have been advised by the EU that it is in their long-term interest to get along. "Our statement has been, if you want to integrate [with Europe], integration begins at home," he says. "Show by your integration at home how you can integrate with the European Union. You are one country. Therefore, you have to show one face, one trade regime, one face, one negotiator."

Yugoslav President Vojislav Kostunica, who is giving up on his current job to run for the presidency of Serbia, says holding Serbia and Montenegro together is his biggest accomplishment in two years on the job.

But few Serbs are enthusiastic about the Belgrade agreement. The economic reformers were outraged that the deal permits Montenegro to maintain a separate currency. There is growing sentiment here to be done with Montenegro.

Another group interested in preventing a break-up is the European Bank for Reconstruction and Development, the EBRD. It is playing a major role in rehabilitating Yugoslavia's war- and sanctions-shattered infrastructure. The EBRD is also involved in trying to stitch the two Yugoslav economies back together, as is being required by the European Union. Henry Russell is the EBRD representative in Yugoslavia. "One way forward might be for both parties to look forward to integration with Europe. Even if they took separate paths, they both have the desire to join the European Union, whenever that may happen. And joining the European Union requires harmonization," says Mr. Russell. "So de facto you may find that harmonization becomes a priority for both."

But analysts are skeptical about the prospects of Serbia and Montenegro remaining together. Negotiators are again bogged down in details, and the debut of the new state is behind schedule, although the EU says it will take place by the end of the year.