Joint-rule in Serbia-Montenegro in Jeopardy

Two weeks ago, Montenegro's Prime Minister Milo Djukanovic wrote to the Serbian government outlining his hopes for the future of the two nations. His plan foresaw Serbia and Montenegro ending the State Union of Serbia and Montenegro and forming independent nations, without a union parliament but with a form of federal council.

Although the two states would maintain a central administration in charge of economic and political affairs, they would operate separate foreign and defence policies.

Premature pressure

The union of Serbia and Montenegro was voted into existence by the Yugoslav parliament in 2003. The EU-brokered Belgrade Agreement marked an end to a long-drawn out constitutional crisis and was designed to remain in place for a minimum of three years, after which the two republics were to hold referendums on whether to maintain the union arrangement or vote for independence.

Djukanovic has made no bones about his desire to end the union and insists his proposal does not represent any breach of the agreement, even though this is supposedly valid until 2006. But he's determined to forge ahead with the referendum determining whether or not the tiny republic can attain full sovereignty.

"We have made our intentions clear to both our partners both in Belgrade and Brussels," he said.

More differences than similarities

The loose union has always been seen as a provisional solution only, with its primary task billed as foreign and defense policy, while the respective republics retained autonomy regarding economic and customs issues.

Montenegro has adopted the Euro, while Serbia is holding tightly onto the Dinar. Montenegro relies heavily on tourism, while Serbia's economic mainstays are agriculture and industry -- differences which make a cohesive tax and customs policy impossible. And while Serbia is keen to invest in its dilapidated armed forces, Montenegro wants to introduce a 4000-strong professional army.

On March 3, the mandates of all the deputies in the State Union parliament expire. But with Montenegro and Serbia unable to reach agreement as to how new elections should be held, the mandates are expected to be extended until a solution is found.

Time for Brussels to intervene

Belgrade hopes this solution will come from Brussels. EU foreign policy chief Javier Solana -- one of the signatories of the Belgrade Agreement -- has invited Djukanovic to Brussels, which has always insisted Serbia and Montenegro will only ever join the EU in a joint bid.

Many in Belgrade agree. "I believe we will have a positive feasibility study by late March, and can then begin stabilization talks with the EU and also finally join Nato," said Svetozar Marovic, the Montenegrin president of the union of Serbia-Montenegro and member of Djukanovic's Democratic Party of Socialists (pictured with Gerhard Schröder).

But neither Marovic nor the Foreign Minister of Serbia-Montenegro, Vuk Draskovic, appear able to influence the two sides.

The Serbian government, led by Prime Minister Vojislav Kostunica is refusing to negotiate Montenegrin independence, fearing it may encourage a claim for independence from Serbia on the part of the Kosovo-Albanians, ahead of the UN's negotiations about the long-term status Kosovo, which is currently an international protectorate.

Ulterior motives?

Western Europe is beginning sit up and take notice. Franz-Lothar Altmann, Balkans expert at the Berlin Foundation for Science and Politics, says a a relaxing of joint-rule between Montenegro and Serbia is by no means out of the question.

"Why shouldn't the union become even looser?" he says. "One could even go a step further and include Kosovo in the equation."

Altmann also points out that independence for Montenegro is very much in Djukanovic's interests. The Prime Minister faces a trial in Italy on charges of involvement with organized crime and cigarette smuggling in the 1990s. It was recently decided in Italy that because he is not the head of a sovereign state, he does not enjoy immunity from prosecution.

Were this to change, Djukanovic could no longer be tried in an Italian court.