Serbia, Montenegro plan to preserve alliance under new name

BELGRADE, Yugoslavia -- Agreeing to wipe the name Yugoslavia from the map of Europe, the federation's two remaining republics committed Thursday to forming a loose joint state with a new name: Serbia and Montenegro.

The radically restructured alliance -- mediated by the European Union and approved in a historic accord signed by top Serbian and Montenegrin leaders -- aims to ease years of feuding between the republics and help the volatile Balkan region focus on much-needed economic reforms.

It was a major policy victory for the United States and the EU, which feared the discord would lead to a further fragmentation of the region that is returning to peace after more than a decade of war.

However, many Serb and Montenegrin nationalists were unhappy with the accord and could pose a challenge to its ratification.

The two semi-independent states will share a common defense and foreign policy but will maintain separate economies, currencies and customs services -- at least for the time being. After three years, both states will be free to organize referendums on independence and secede if they so choose.

The political accord also calls for elections for a new parliament in the fall.

This legislature will replace the current bicameral parliament with one chamber in which the two entities will be equally represented. The legislatures of both republics, as well as the existing parliament, must endorse the accord by June, when the country's name will also be formally changed.

"This document sets the shape of completely new relations between the states of Serbia and Montenegro," said Yugoslav President Vojislav Kostunica. "This step means a break with the previous regime" of Milosevic, currently on trial before a U.N. tribunal for war crimes in Kosovo, Croatia and Bosnia.

Yugoslavia -- whose name has become a synonym for the worst carnage in Europe since World War II -- began to unravel along ethnic lines during Milosevic's reign.