Historic overhaul wipes Yugoslavia from Europe's map

BELGRADE, Serbia-Montenegro -- Erasing Yugoslavia from the map of Europe, lawmakers all but dissolved the troubled Balkan federation Tuesday and gave birth to a new country with a new name: Serbia and Montenegro.

Under a European Union-brokered accord approved by parliament, the two republics stick together in a loose union that gives each greater autonomy and the trappings of statehood. The final breakup of the former Yugoslavia -- outright independence for both -- could come as soon as 2006.

Widely seen as a compromise solution amid conflicting demands within both republics that Serbia and Montenegro be either firmly tied or completely separated, the accord preserves the alliance but allows each member state to hold an independence referendum after three years.

The deal offers the republics near-total sovereignty, although they will remain linked by a small joint administration in charge of defense and foreign affairs. Yugoslavia, the federation's name for nearly three quarters of a century, is relegated to the history books.

"This is a new beginning, but we should not be euphoric," Serbian Prime Minister Zoran Djindjic said after both chambers of parliament approved the overhaul.

"This new country is based on a minimum of common interest between Serbia and Montenegro, and we should give it a chance," he said.

Yugoslavia, founded in 1918 as the Kingdom of Serbs, Croats and Slovenes, comprised six republics until the early 1990s, when Slobodan Milosevic presided over a bloody breakup that saw Bosnia, Croatia, Macedonia and Slovenia secede.

Serbia and Montenegro, tightly knitted for centuries, opted to stay together as a rump Yugoslav federation.

But the relations between the republics soured, prompting the EU to mediate the accord last year in an effort to keep the two together and prevent fresh upheaval in the volatile region.

The latest arrangement is meant to accommodate a strong independence movement in Montenegro, the smaller republic. Montenegro's leadership began boycotting federal institutions in 1998, prompting some Serbs to demand separation.

Srdja Bozovic, a pro-Serbia official from Montenegro, hailed Tuesday's reform as "a fresh start for Serbia and Montenegro -- an opportunity to have a stable state."

But the new arrangement left many dissatisfied, including staunchly separatist leaders in both republics.

"This new country is stillborn," said Vladan Batic of Serbia's Christian Democrats, who serves as justice minister in the Serbian government. He predicted the two republics would go their separate ways in three years.

Equally unhappy were staunchly separatist Montenegrin politicians like Miodrag Zivkovic of the Liberal Alliance, who contended that Montenegro was being "cheated with this reform."

"Full independence is our true interest," he said.

Moderate politicians from both republics gave their crucial backing to the EU plan and pledged to establish a new administration for the new union by gradually downsizing and reforming existing federal bodies in the coming weeks.

"The new state has a realistic chance of becoming a modern and prosperous country," said the outgoing Yugoslav prime minister, Dragisa Pesic.

"We have opened the way for joining the European Union one day, but we must set up all new institutions here first," said Dragoljub Micunovic, the speaker of the Yugoslav parliament who presided over Tuesday's historic session.

If the new state begins well, "people in both republics would forget about the possible (independence) referendums and decide to keep Serbia and Montenegro together," Micunovic said.

Tiny Montenegro, which has just 650,000 people, is dwarfed by much-larger Serbia, home to 10 million. They "could go either way from here ... creating a truly functional union or going completely separate ways," said Serbian Deputy Prime Minister Miodrag Isakov.

Nationalist parties in both republics opposed the reform, arguing that their deep historical ties ought to be preserved.

Tuesday's overhaul leaves Yugoslav federal president Vojislav Kostunica -- who ousted Milosevic in elections in 2000 -- without an official position. It also raises questions about the status of Kosovo, which remains officially in Serbia but was considered part of Yugoslavia under a key U.N. resolution.

"Now it will be up to the new institutions of the union and to the governments of Serbia and Montenegro to make the union work -- and make the promise of European integration a reality," said the EU's foreign policy chief, Javier Solana, who mediated the accord.