Comment: Squabbling Yugoslav Republics Set for Divorce

Efforts by the European Union to keep Serbia and Montenegro together have only revealed how ready this squabbling couple are for divorce.

Over the past month, EU foreign policy chief Javier Solana has launched an intensive round of shuttle diplomacy between Podgorica and Belgrade aimed at preventing a spring referendum on Montenegrin independence. Meeting with the Montenegrin president, Milo Djukanovic, in Brussels last month, Solana proposed a new union, hinting at serious consequences - slashing EU aid and refusing to recognise any referendum on independence - if it were not accepted.

Solana indicated that both sides should commit to the general concept of the proposed union, with details to be worked out later.

But for Djukanovic - and for the leadership in Belgrade - the details are key. The divergence of the economic systems of the republics, the complexity of political power-sharing in a new union, the intricacies of implementing this revamped relationship and, indeed, the simple political realities, all conspire to undermine any attempts at match-making.

European leaders remain determined to keep this unhappy couple together, however. They are afraid that unravelling the Yugoslav federation would open the way to Kosovo independence. They worry that a referendum on independence would create further tensions within a very divided society. They also fret about the high cost of integrating an independent Montenegro into the EU.

Yet while no study on the cost of EU integration has been made public, World Bank officials and other international finance experts have indicated that it would be expensive and complicated to reintegrate what are now two de facto independent economies.

Having started economic reforms when Slobodan Milosevic was still Yugoslav president, Montenegro is ahead of Serbia in bringing its monetary regime, fiscal policy, banking system, and foreign trade regime in line with international standards. "Montenegro does not want to be sucked back into a protected and regulated market with Serbia at the cost of closing itself off to other regional markets," said one international economist based in Podgorica.

Although Solana insists the proposed union would not compel Montenegro to undo its economic reforms, Serbian and Yugoslav leaders demand the re-establishment of a unified internal market - with a single currency (Serbia uses the dinar, while Montenegro has adopted the euro), customs regime and tax system. Unless Serbia lowers its external trade tariffs and dismantles price controls, Montenegro will be forced to reverse hard-won reforms.

But the question of whether the union could ever function extends beyond economics. No politician in Serbia wants to be identified as the one who lost Montenegro. But many officials in Belgrade are wary of the proposed union, and the Yugoslav president, Vojislav Kostunica, and the Serbian prime minister, Zoran Djindjic, have criticised the plan as unworkable and contrary to Serb interests.

The leaders in both republics are locked in conflict over how powers in the proposed union would be divided. Junior partner Montenegro is set to seek parity in joint institutions, such as the parliament and courts, a move certain to be rejected by neighbouring Serbia, some 18 times its size.

The handling of responsibilities for key ministries, particularly foreign trade and the army, is another point of contention. Montenegro seems to want any joint bodies to be as lean and flexible as possible. For its part, Serbia would want a more centralised trade and foreign affairs policy.

With power sharing already difficult among the rivals in Belgrade's fractious ruling coalition, the Democratic Opposition of Serbia, DOS, there is little appetite to tackle the job of carving up responsibilities between the union and its republics. What is more, it is a political hot potato for Kostunica, who as federal president may find himself without a job if the EU's initiative fails and Montenegro bolts. While he is thus keener than most of his colleagues to preserve the union and might be more disposed to a compromise, other DOS members jostling for power exploit the issue for their own interests.

Meanwhile, Djukanovic could face the collapse of his minority government. He has failed to deliver independence and seems internationally isolated. If he accepts a compromise deal, the Montenegrin president would need a clear commitment that, after a few years, the proposed union would be reviewed in an internationally guaranteed referendum. Otherwise, any moratorium on the referendum would almost certainly be rejected by the strongly pro-independence parties in his coalition.

Some international officials have hinted that the latter could be replaced with pro-Yugoslav opposition parties. But their poor reform credentials, strong ties to Kostunica and past links to Milosevic make the idea a non-starter for Djukanovic's Democratic Party of Socialists.

This highlights the central dilemma of Solana's approach: it is alienating the very segment of the Montenegrin population most supportive of the EU and the ideal of integration. With its threats to punish Montenegro in the event of a referendum, Brussels is aligning itself with those political forces in favour of preserving the federation, even though their pro-reform and pro-European credentials are suspect.

The EU threats have cooled enthusiasm for independence, according to recent polls. Of course, this shift may also have resulted from the deteriorating economy and corruption allegations against Djukanovic. While support for independence appears to remain in the majority, rural populations (and former, even current, supporters of Milosevic) are gaining in political strength and confidence.

At the same time, the EU's efforts are irking the Montenegrin intellectual elite, the urban population and the youth. All of these groups are the natural allies of economic reform and of Europe, which they blame for denying them their right to self-determination. As one Montenegrin civil society leader said, "The EU is not acting as a mediator for European integration, but as a policeman of the new European order." And if the threat of violence has generally been seen as coming from the pro-Yugoslavia bloc, the possibility of social unrest on the part of frustrated proponents of independence can no longer be excluded.

To make matters more complicated, the legal aspects of the creation of a new union may pose the greatest obstacle. According to Montenegro's constitution, any amendments required to implement the union need to be approved by a referendum. The EU has indicated that it would not accept the threshold of a "fifty percent plus one vote" if an independence referendum were to be held today - although this is in accordance with Montenegrin law. Yet even if Brussels allows this standard for a plebiscite on the union, its proposal might fail to receive sufficient backing. The EU would be hard-pressed to explain the creation of a union supported only by a minority of the Montenegrin population.

European leaders are determined to endorse a deal at their Barcelona summit March 15-16, and Solana is working to the last to secure an agreement. The EU is so eager to make these unwilling partners renew their vows that it might ignore the host of details on which the two republics disagree. That would mean blessing a union that is only to end sooner rather than later.

Mabel Wisse Smit is executive director of the Open Society Institute-Brussels.