Montenegro to Drop Aim of Independence

Montenegro's president, Milo Djukanovic, is on the verge of abandoning his dream of independence after heavy pressure from the European Union, including the threat of cuts in aid.

The republic will remain in a federation with Serbia and take turns to occupy a single seat at the United Nations. Although it will have the right to its own diplomatic and trade offices in foreign capitals, according to Yugoslav and western sources, Montenegro will not be recognised internationally as an independent state.

The climbdown was approved in principle at a long meeting of Mr Djukanovic's Democratic Party of Socialists but the party is calling for extra concessions from Javier Solana, the EU's foreign policy chief.

Under the package Mr Solana put to Mr Djukanovic in Brussels last week, Montenegro and Serbia would share a single system of defence, customs and money, with some ministries and other key federal institutions headquartered in Montenegro. The name Yugoslavia would be replaced by a title mentioning both republics, either in a "union" or "federation".

The government's change of heart threatens to split Montenegro's ruling coalition and provoke new elections. The Social Democrats and the Liberal Alliance, two smaller and more radical pro-independence parties in Mr Djukanovic's coalition, accuse him of betraying his voters.

When Slobodan Milosevic was in power in Belgrade, Montenegro received strong support from the west, including help in breaking away from the Yugoslav dinar and bringing in the Deutschmark as its official currency.

But since Mr Milosevic's downfall, western policy has switched, partly for fear that the end of the federation would lead directly to independence for Kosovo.

The pro-independence forces only enjoy a narrow majority in Montenegro, and some diplomats feared that after a referendum on independence planned for this spring, the losers might use violence to resist change.

Mr Djukanovic did not expect Mr Milosevic to be defeated in the 2000 elections, which he asked his supporters to boycott. He now finds himself in the ironic position of seeming "less European" than the one-time pro-Milosevic party, the Socialist People's Party (SNP), which is firmly backing the Solana package.

In Serbia, public opinion is relaxed about a Montenegrin breakaway and many say they would welcome a cut in the federation's huge bureaucracy.

When Serbian-Montenegrin talks reached deadlock in December, even the Yugoslav president, Vojislav Kostunica, who is a strong nationalist, said he was willing to accept an independence referendum.

But EU officials panicked, and insisted on intervening to find a compromise package. The US and several other western envoys have been in Podgorica in recent days, urging Montenegro's elite to accept it. A key element was a moratorium on any referendum for five years.

Mr Djukanovic will tell Mr Solana that Montenegro will accept the package provided it can keep the euro. He also wants clarity on the future of the Yugoslav army, which was used in the Milosevic era to scare Montenegro from unilateral moves.

The trickiest immediate issue is Mr Djukanovic's long-standing promise of a referendum. As a face-saver, he may now organise one to ratify his climbdown with Brussels.

"We don't want to deny our citizens' right to express themselves," a Montenegrin government source said yesterday. "The final word on the status of Montenegro should be given by the people of Montenegro in a referendum. This is the only fair way."