BELGRADE, Serbia, March 14 (UPI) -- The foundation was laid in Belgrade on Thursday for a new state in the Balkans to be formed by Serbia and Montenegro, the two members of the existing Yugoslav federation.
A new state would end protracted negotiations on redefining the relationship between the two parts of Yugoslavia.
The European Union's foreign and security policy chief Javier Solana was at the Palace of the Federation, the seat of the Yugoslav government, to help deliver the newly born but still unnamed polity, which will have a common president, court and ministerial council with five portfolios -- for foreign affairs, defense, external and internal economic relations and the protection of human and minority rights.
Nothing was said about what the new state would be called but the name "The Union of Serbia and Montenegro" recently was mooted.
Solana signed the document on basic principles underlying the new creation, along with Yugoslav President Vojislav Kostunica and Deputy Federal Prime Minister Miroljub Labus, both Serbs, and by Montenegro's President Milo Djukanovic and Prime Minister and Filip Vujanovic.
Prime Minister Zoran Djindjic represented Serbia. Serbian President Milan Milutinovic, Slobodan Milosevic's former close aide, was not present at the signing ceremony. He has not taken an active part in the country's political life since his Socialist Party lost the September 2000 elections and was overthrown the next month.
He likely is to be extradited to The Hague criminal tribunal to answer charges of war crimes in Kosovo when his mandate runs out late this year and he loses immunity from prosecution.
Solana said after the signing the agreement "is not an end to anything but, to the contrary, the beginning of a new chapter which we will be writing together and which will lead us all into the membership of the European Union."
Under the agreement, Serbia and Montenegro each will have their own currency, market and customs but their representatives pledged to harmonize their economic systems with European Union standards.
The currency in Serbia is the dinar and Montenegro adopted the German mark in 2000 and joined most EU countries in switching to the euro as its official currency earlier this year.
After the final round of talks, which began on Wednesday afternoon and ended at about 3 a.m. Thursday, Kostunica told reporters: "I wanted to convince you that the thing about this solution is that it in no ways resembles a loose federation or a confederation. In question is a really original constitutional solution for a state which, I am confident, will last and be durable."
The two Yugoslav republics began moving apart soon after Djukanovic defeated Milosevic's protégé Momir Bulatovic in 1997 for Montenegro's president. Two years later, the Montenegrin government complained it was discriminated against and exposed to political and military pressure from Belgrade.
The crisis came to a head in July 2000, when Milosevic engineered an abrupt change in the federal constitution, making it impossible for a Montenegrin ever to become president.
Montenegro pressed for a referendum on independence from Serbia and for its own seat in the United Nations, after which a union could be considered. The independence campaign gathered momentum after Kostunica and Serbia's 18-party democratic reform coalition came to power but failed to abrogate the constitutional change.
It was only under pressure from the European Union and the United States that Montenegrin leaders agreed to resume talks on restructuring the federation.
Djindjic said the EU had agreed to provide some type of monitoring of the whole process so that "if difficulties crop up between Serbia and Montenegro in coordinating their economic space we will be able to call on the EU to intervene and assist and support the republic which pushed forward faster with its reforms."
Labus said: "We received political guarantees from the Montenegrin delegation and the EU that the process of close integration with Europe, which is currently at a standstill, will be continued without a hitch. As far as I am concerned, the talks are over and I don't intend to participate in drafting the constitution. Let others do this."
The agreement envisions the parliaments of Yugoslavia and the two federal republics adopt the constitution of the future state by next June, after which elections of the federal organs will be called.
Under the agreement, after three years, Serbia and Montenegro will have the right to re-examine their status and possibly secede from the common state.
