Books on Serbia & Montenegro
% of GDP
Update No: 095 - (31/03/05)
What is Serbia?
In March 2002 the remaining two republics left in the old Yugoslav federation
-Serbia and Montenegro-agreed to create a looser union, one which a recent
proposal in March 2005 by Montenegro puts very much in jeopardy. They at the
moment share a presidency, parliament and a handful of ministries. But each
controls its own economic system and are semi-independent. Legally, Kosovo is
part of Serbia; effectively, it has been a United Nations protectorate since
1999. Tension is rising in the province ahead of talks on its future scheduled
to begin in the summer of 2005.
Zoran Djindjic, Serbia's reforming, pro-Western prime minister, the best bet for
the region, was unfortunately assassinated in March 2003, allegedly by organised
criminals, although the matter has yet to be cleared up. His successor, Vojislav
Kostunica, is a lawyer and nationalist who believes in the establishment of
separate regions for Albanians and Serbs in Kosovo. After three previous
elections which were declared invalid due to low turnout, Boris Tadic became
Serbia's president in June 2004. A former defence minister, he is pro-Europe and
pro-reform. Ex-president Slobodan Milosevic, whose troublemaking in the 1990s
ignited the Yugoslav wars, is meanwhile on trial for war crimes in The Hague.
Montenegro looking bleak
Relations soured between Montenegro and its then-federal parent, Yugoslavia,
after the pro-Western Milo Djukanovic was elected its president in 1997.
Montenegro's restiveness raised the spectre of yet amother Balkan war,
especially with Djukanovic threatening to call a referendum on independence. The
assassination of Yugoslavia's defense minister in February 2000 raised tensions
In mid-2000, Milosevic changed Yugoslavia's constitution to undercut
Montenegro's vote in the federal parliament. Many Montenegrins then boycotted
Yugoslavia's federal elections in September 2000. The surprise fall of Milosevic
did not heal the rift. But after his successor, Kostunica, paid an ice-breaking
visit to Montenegro in October 2000, Serbia and Montenegro eventually agreed to
create a looser union in February 2002. They now share a presidency, parliament
and handful of ministries. But each controls its own economic system and are
semi-independent states. Despite this, Montenegro's future looks bleak.
Will Serbia-Montenegro be dissolved?
Montenegro has in fact recently presented to Serbia a proposal to bring an
end to the federal union of Serbia-Montenegro. In March Montenegro President and
Prime Minister, Filip Vujanovic and Milo Djukanovic, delivered the proposal to
Serbia-Montenegro President Svetozar Marovic and Serbian President and Prime
Minister Boris Tadic and Vojislav Kostunica, with hopes that they will reach an
agreement, because this new model would take care of all the federal union's
Serbia-Montenegro Judge Blagota Mitric said that the suggestions made by the
Montenegrin officials can be carried out legally, adding that similar solutions
do exist. He said that this suggestion of forming a union of two independent
states has a goal in mind of easing the current relations between Serbia and
Montenegro. 'Its legal fate is still up in the air, because it must first be
adopted by each of the two states, and then by the federal parliament.' Mitric
Mitric said that this proposal is probably an effort to speed up the process of
independence for Montenegro, which according to the Belgrade Agreement, must
wait until 2006 to hold a referendum. 'The Belgrade Agreement was also adopted
without the public's knowledge, without a referendum, and it should have been
passed with a referendum. If an agreement resulting from this proposal is to be
discussed in Serbia, then it must be given a referendum, because it is the
citizens' responsibility to decide the status of the nation.' Mitric said.
One of the creators of the Serbia-Montenegro constitutional charter, Zoran
Lutovac, said that all signs, including the fact that Montenegro was looking to
postpone federal elections, point to the fact that Montenegro was preparing a
proposal such as this one.
'The idea of a union of independent nations is not new, it existed even before
the Belgrade Agreement, only the details are new. A union of independent states
is a step towards autonomy, and autonomy is one of the topics, and should be
discussed. However, it has to be said that some elements are not included, for
starters, a proper sequence of events. We have received a finished proposal,
without getting a political consensus or opinions from the citizens beforehand.'
'On the basis of everything we know, Belgrade is in a completely different
position, and I think that now it is more realistic to look for an agreement in
procedure in reaching a proposal, rather than insisting on a proposal. Belgrade
is against independence, mainly because independent states would once again have
to ask to be internationally recognized as such, and I think that this would not
be a question of Serbia and Montenegro, rather, of the international community.'
Reactions from Belgrade
Serbia-Montenegro President Svetozar Marovic said that the citizens would
have the last say on the proposal. He told Podgorica daily Vijesti that he has
received the proposal and that it is one of the options available in the
democratic process of sealing the fate of Serbia and Montenegro.
Prime Minister Vojislav Kostunica said that the proposal goes against the
existing Belgrade Agreement. In a letter addressed to Vujanovic and Djukanovic,
Kostunica said that there were many people who signed the Belgrade Agreement,
and that those people have an obligation to respect what they signed into law.
'If you feel that the constitutional charters created by the Belgrade Agreement
need to be changed, you can do so, but only through a procedure that it
available along the guidelines of the constitutional charters themselves.'
Serbian Deputy Prime Minister Miroljub Labus said that he will carefully look
over the proposal and release a statement regarding his stance shortly. He said
that Serbia-Montenegro needs a peaceful 2005, in order to deal with its most
important question, Kosovo. 'Starting this summer, discussions regarding
Kosovo's status will begin, and we must be prepared for that.' Labus said.
The Democratic Party said that all proposals must be taken into consideration in
solving the question of Serbia-Montenegro's status, but stressed the party's
opinion that remaining a unified nation is the quickest and most effective way
into the European Union for both Serbia and Montenegro.
Serbian Radical Party leader Tomislav Nikolic said that his party will not
accept an agreement for the transformation of the federal union. 'We do not wish
to accept this new experiment.' Nikolic said.
National Socialist Party President Predrag Bulatovic said that the proposal has
intentions of destroying the union for good. 'The governments in Belgrade and
Podgorica can discuss this, but only within its constitutional jurisdictions,
which do not include the agreement which Milo Djukanovic is offering.' Bulatovic
Reactions from abroad
European Union officials say that Pro-European economic and political
reforms in Montenegro and Serbia are currently a lot more important than any
changes that need to be made to the federal union. These officials, who wished
to stay anonymous, said that reforms are doubly important because of the
upcoming Feasibility Study that the European Commission is to give a report on
in March. A positive critique is necessary for discussion for the Agreement for
Stability and EU Accession to begin.
European Union High Official Javier Solana's representative Christina Gallach,
said that the EU will try and help Serbia and Montenegro to solve their problems
and sustain the union, but will not impose any solutions. 'Solana is in constant
contact with Belgrade and Podgorica, we are following the situation and trying
to help, but it must be clear to everyone that the EU and Solana can do nothing
to effect the situation directly.' Gallach said.
US ambassador to Serbia-Montenegro, Michael Polt, said that the US will support
all agreements regarding the national status which Serbia and Montenegro reach
in a democratic fashion. 'Decisions regarding the future are up to the citizens
of Serbia and Montenegro, and no one else.' Polt said. An impeccably democratic
sentiment, no doubt.
On the whole the established democracies are opposed to the idea of the former
Yugoslav Republic spawning yet another statelet, particularly whilst the
potentially explosive future of Kosovo is not yet resolved. It may well be that
membership of the European Union will be dangled as a realistic prospect for the
Federal state that exists now, but likely to be long delayed in the event of the
break up of the Federation. Such a break-up also would block one option for
Kosovo possibly achieving autonomy like Montenegro, within the Federation.
The push is coming from Montenegro whose politicians will have their own reasons
for this, whilst for Serbian politicians it would mean becoming a land locked
state - losing their access to the sea.
Intesa buys stake in Serb bank
Banca Intesa SpA agreed to buy 75% plus one share of Delta Banka of Serbia for
€277.5m, a move that fits into the Italian bank's strategy of expanding in
Eastern Europe over the next three years, the Wall Street Journal Europe
Banca Intesa, Italy's largest bank, said that "under certain
circumstances" it could eventually buy 100% of Delta Banka for €370m in
cash. Holders of the remaining 25% of shares have four years to decide whether
to sell to the Italians.
Delta is 86% owned by Hemslade Trading, the Cyprus-registered company of Serbian
tycoon, Miroslav Miskovic, whose business empire also includes distribution
rights for Nike sportswear and Fiat and Alfa Romeo cars.
Banca Intesa said the transaction should close early in the second quarter.
The acquisition of Delta Banka - Serbia and Montenegro's second-largest bank in
terms of assets - follows Banca Intesa's establishment of the Central European
International Bank in Hungary in 1979, the acquisition of Croatian bank,
Privredna Banka Zagreb in 2000 and of Slovakian bank, Vseobecna Uverova Banka in
According to figures provided by Intesa, Delta's assets were valued at about
Slovak company buys Montenegrin coal mine
The Ivangrad coal mine near Berane was bought through a tender by Slovaks who
are interested in exploiting this source of high-quality coal, FoNet news agency
The property of the coal mine was purchased by the Slovak company Kovex
[smelting works]. Only two tenders had been submitted - by Kovex and VIK of
Valjevo [Serbia]. As the company from Valjevo had failed to pay the mandatory
deposit of 60,000 euros, its tender was not even taken into consideration.
FOREIGN ECONOMIC COOPERATION
Montenegrin, Albanian presidents discuss economic relations, minorities
Montenegrin President, Filip Vujanovic, and Albanian President, Alfred Moisiu,
assessed recently in Podgorica that bilateral and economic relations between the
two states were comprehensive and meaningful, pointing to a further development
in mutual interests, SRNA News Agency reported.
"We agreed that everything should be done to make better use of the
Podgorica-Shkoder rail connection, as this is an opportunity to provide the two
countries' citizens with cheaper and faster communications. We concluded that
the construction of the Adriatic-Ionian motorway was of great importance to
Montenegro and Albania," Vujanovic said at a news conference.
He suggested to President Moisiu that they meet with Croatian President, Stjepan
Mesic, in Montenegro for trilateral talks "to promote the significance of
the Adriatic-Ionian motorway for the three states and their economies."
We agreed Montenegro and Albania should protect the natural resources of Lake
Shkoder and to realize all the projects recently initiated by the Albanian and
Montenegrin science academies," Vujanovic said.
Moisiu pointed out that this was the first official visit by an Albanian
president to Montenegro.
We expressed our desire to advance cooperation in the interests of both our
countries and the region, which have changed in a significant way as a result of
everything that has happened in our states and the international engagement,
especially that of the USA and the EU," Moisiu said.
Vujanovic and Moisiu both agreed that the position of the Albanian minority in
Montenegro and the Montenegrin minority in Albania was at a high level and this
was "an asset and a condition for good cooperation between the two
President Moisiu will hold talks this afternoon with Montenegrin Prime Minister
Milo Djukanovic and Speaker Ranko Krivokapic, while tomorrow he will visit
Belgrade and Ljubljana sign cooperation agreement
Slovenia's government recently signed a ratification bill for a development
cooperation agreement with Serbia-Montenegro. The agreement will provide a
formal organisational and normative framework for Slovenia's international
development aid to Serbia-Montenegro, Slovene Press Agency reported.
When the accord enters into force, Serbia-Montenegro will have the status of a
country to which Slovenia must provide aid, in line with its commitments as an
EU member and donor of international development aid.
The document, which was concluded in July 2003, also stipulates that the two
countries will set up a special committee to determine priority tasks and the
content of development aid, the government PR and media office said.
A Slovenian company has won a contract for the bridge in Belgrade.
The structural engineering company Ponting and partners DDC of Ljubljana and
Centarza puteve from Serbia-Montenegro have won a contract for the design of a
major bridge over the Sava in Belgrade. The centrepiece of the 980m construction
will be a 200m tower.
Montenegro sells telecom company to Hungarians
Representatives of the Montenegrin government, the Employment Bureau and Magyar
Telecom signed a contract on the sale of 51.12 per cent of shares in Telekom
Crne Gore [Montenegrin Telecom] to a Hungarian company, Mina News Agency
"By signing the contract we managed to ensure that all our demands were
met," Branko Vujovic, member of the government's Privatization Council,
said immediately before signing the contract and added that this protected
After signing the contract Magyar Telecom Director, Andras Balogh, said that
this was a very important day for the company which was keen to ensure
sustainable development for Telekom Crne Gore, while focusing on its customers.
According to him, it is very important for the company and Montenegro that
Telekom Crne Gore has become part of the Hungarian company and the Deutsche