O 041847Z FEB 03
FM AMEMBASSY BELGRADE
TO SECSTATE WASHDC IMMEDIATE 9188
INFO EUROPEAN POLITICAL COLLECTIVE
DEPT OF TREASURY WASH DC

UNCLAS SECTION 01 OF 03 BELGRADE 000278 
 
AMEMBASSY ROME FOR MAUREEN GREWE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PBTS MW SR YI
SUBJECT: "YUGOSLAVIA" OFFICIALLY DISAPPEARS, GIVES WAY 
TO "SERBIA AND MONTENEGRO" 
 
SUMMARY 
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¶1.  ON FEBRUARY 4, FOLLOWING THE ADOPTION OF THE 
CONSTITUTIONAL CHARTER AND IMPLEMENTATION LAW, THE 
YUGOSLAV PARLIAMENT OFFICIALLY PROCLAIMED THE END OF 
THE FEDERAL REPUBLIC OF YUGOSLAVIA AND THE BEGINNING OF 
THE STATE UNION OF "SERBIA AND MONTENEGRO." THIRTY 
FEDERAL INSTITUTIONS IMMEDIATELY CEASED TO EXIST, SEVEN 
-- INCLUDING THE NATIONAL BANK OF YUGOSLAVIA -- HAVE 
BECOME SERBIAN BODIES, AND 15 SCIENTIFIC, CULTURAL, AND 
TRANSPORTATION BODIES ARE NOW IN LIMBO. 
 
¶2. THE IMPLEMENTATION LAW SETS A CLEAR TIMETABLE FOR 
THE TRANSFORMATION OF THE JOINT STATE. A NEW UNION 
ASSEMBLY IS SUPPOSED TO BE IN PLACE WITHIN TWO WEEKS, 
AND THE STATE UNION'S FIRST PRESIDENT AND HIS CABINET 
SHOULD BE APPOINTED BY MARCH 6. IN ADDITION, SERBIA AND 
MONTENEGRO ARE OBLIGED TO AMEND OR REPLACE THEIR 
CURRENT CONSTITUTIONS IN LINE WITH THE CONSTITUTIONAL 
CHARTER BY JUNE 30, ALTHOUGH SERBIAN PRIME MINISTER 
DJINDJIC ALREADY HAS POINTED TO SEPTEMBER AS A MORE 
REALISTIC TIMELINE FOR THE ADOPTION OF A NEW SERBIAN 
CONSTITUTION. THE ALREADY APPARENT DISREGARD OF KEY 
OFFICIALS TOWARD THE PROVISIONS OF THE IMPLEMENTATION 
LAW, AND THE NARROW MAJORITY THAT THE RULING SERBIAN 
AND MONTENEGRIN COALITIONS WILL HAVE IN THE NEW UNION 
ASSEMBLY, SUGGEST THAT THE ESTABLISHMENT OF A 
FUNCTIONING JOINT STATE WILL TAKE LONGER THAN 
ENVISIONED. EU HIGH REPRESENTATIVE SOLANA IS DUE IN 
BELGRADE ON FEBRUARY 6 TO TRY TO SUSTAIN MOMENTUM FOR 
THE TRANSFORMATION OF THE JOINT STATE AND THE DRAFTING 
OF A DETAILED ACTION PLAN FOR ECONOMIC HARMONIZATION, 
DUE NEXT MONTH. END SUMMARY. 
 
FEDERAL PARLIAMENT PROCLAIMS CONSTITUTIONAL CHARTER 
--------------------------------------------- ------ 
¶3.  ON FEBRUARY 4, BOTH CHAMBERS OF THE YUGOSLAV 
PARLIAMENT VOTED TO ADOPT THE CONSTITUTIONAL CHARTER 
AND ITS ACCOMPANYING IMPLEMENTATION LAW, FOLLOWING 
THEIR ADOPTION LAST WEEK BY THE SERBIAN AND MONTENEGRIN 
PARLIAMENTS. THIS ACT WAS FOLLOWED IN THE EVENING BY A 
PROCLAMATION CEREMONY OFFICIALLY MARKING THE END OF THE 
FEDERAL REPUBLIC OF YUGOSLAVIA AND THE BEGINNING OF THE 
STATE UNION OF "SERBIA AND MONTENEGRO." IN THE PROCESS, 
THE FRY TRANSFERRED ALL OF ITS RIGHTS AND DUTIES TO THE 
NEW STATE UNION. 
 
¶4. SUPPORT FROM SERBIA'S RULING DOS COALITION AND THE 
MONTENEGRO'S TWO MAJOR PARTIES -- THE RULING DPS PARTY 
AND THE OPPOSITION SNP PARTY -- GUARANTEED RELATIVELY 
EASY PASSAGE OF THE TWO DOCUMENTS IN BOTH HOUSES OF THE 
FEDERAL PARLIAMENT. AS IN THE SERBIAN PARLIAMENTARY 
VOTE, YUGOSLAV PRESIDENT KOSTUNICA'S DEMOCRATIC PARTY 
OF SERBIA (DSS) WAS THE MOST NOTABLE DISSENTER, VOTING 
FOR THE CONSTITUTIONAL CHARTER BUT AGAINST THE 
IMPLEMENTATION LAW. 
 
FEDERAL INSTITUTIONS INSTANTLY TRANSFORMED OR DISSOLVED 
--------------------------------------------- ---------- 
¶5. BASED ON ARTICLES 14, 15, AND 16 OF THE 
IMPLEMENTATION LAW, THIRTY FEDERAL INSTITUTIONS -- 
INCLUDING THE MINISTRIES OF INTERNAL AFFAIRS, FINANCE, 
JUSTICE, AND TRANSPORT -- CEASED TO EXIST UPON THE 
PARLIAMENT'S PROCLAMATION OF THE CHARTER. ALSO 
EFFECTIVE IMMEDIATELY, SEVEN FEDERAL INSTITUTIONS -- 
INCLUDING THE NATIONAL BANK OF YUGOSLAVIA AND THE 
FEDERAL CUSTOMS ADMINISTRATION -- HAVE BECOME SERBIAN 
BODIES, ALTHOUGH THE SERBIAN PARLIAMENT STILL IS 
OBLIGED TO PASS NEW REGULATIONS FORMALIZING THEIR PLACE 
IN THE SERBIAN BUREAUCRACY. FIFTEEN SCIENTIFIC, 
CULTURAL, AND TRANSPORTATION BODIES ARE NOW IN LIMBO, 
REMAINING IN OPERATION AT THE JOINT-STATE LEVEL "UNTIL 
THEIR FINAL STATUS IS DEFINED." 
 
OSTENSIBLY FIRM TIMETABLE SET IN MOTION 
--------------------------------------- 
¶6.  WITH ITS ADOPTION, THE IMPLEMENTATION LAW SETS A 
CLEAR TIMETABLE FOR THE TRANSFORMATION OF THE JOINT 
STATE AND THE COMPOSITION OF ITS EXECUTIVE, 
LEGISLATIVE, AND JUDICIAL STRUCTURES. THE FOLLOWING IS 
A CALENDAR OF DEADLINES SET FORTH BY THE LAW, ALTHOUGH 
PAST EXPERIENCE SUGGESTS THAT NONE OF THESE DEADLINES 
ARE LIKELY TO BE TREATED WITH STRICT OBEDIENCE: 
 
-- FEBRUARY 14: SERBIAN AND MONTENEGRIN PARLIAMENTS 
PASS RESPECTIVE LAWS ON INDIRECT ELECTION OF DEPUTIES 
TO THE NEW UNION ASSEMBLY 
 
-- FEBRUARY 19: INDIRECT ELECTION OF MPS TO THE UNION 
ASSEMBLY 
 
-- WEEK OF 24 FEBRUARY: THE FIRST SESSION OF THE UNION 
ASSEMBLY IS HELD (WITHIN FIVE DAYS OF ELECTION OF MPS). 
THIS SESSION, WHICH IS LIKELY TO LAST SEVERAL DAYS, 
WILL ELECT THE ASSEMBLY SPEAKER AND VICE-SPEAKER AND 
THE PRESIDENT OF THE NEW STATE UNION. IT WILL ALSO 
ENACT THE LAW ON THE TEMPORARY FINANCING OF THE STATE 
UNION. 
 
-- AROUND END OF FEBRUARY: PRESIDENT PROPOSES 
COMPOSITION OF THE COUNCIL OF MINISTERS (WITHIN 5 DAYS 
OF THE PRESIDENT'S ELECTION). 
 
-- MARCH 6: "ALL INSTITUTIONS OF THE STATE UNION WILL 
BE CONSTITUTED, I.E. WILL BE ELECTED." (THIS APPARENTLY 
IS THE DEADLINE FOR THE ASSEMBLY TO APPROVE THE 
PRESIDENT'S PROPOSED CABINET). 
 
-- MID-MARCH: APPOINTMENT OF JUDGES TO THE "COURT OF 
SERBIA AND MONTENEGRO (WITHIN 25 DAYS OF THE 
PRESIDENT'S ELECTION) 
 
-- MID-MARCH: ADOPTION OF OMNIBUS LAW REGULATING THE 
"ORGANIZATION, MODE OF WORK, AND SUPERVISIONS" OF THE 
JOINT STATE'S INSTITUTIONS. 
 
-- MARCH 31: COMPLETION OF DETAILED ACTION PLAN FOR THE 
INTERNAL MARKET AND FOREIGN TRADE 
 
-- APRIL 5: FORMATION OF COMMISSION ON THE DIVISION OF 
FRY PROPERTY AND ASSETS 
 
-- JUNE 30: REPUBLICS EITHER AMEND OR REPLACE CURRENT 
CONSTITUTIONS IN CONFORMITY WITH THE CONSTITUTIONAL 
CHARTER. 
 
-- JULY 4: PROPERTY AND ASSET COMMISSION MUST FORWARD A 
DRAFT LAW TO THE SERBIAN AND MONTENEGRIN PARLIAMENTS. 
 
-- DECEMBER 31: REPUBLICS MUST HARMONIZE ALL OF THEIR 
LAWS AND OTHER REGULATIONS WITH THE CHARTER AND THE 
LAWS OF THE NEW UNION 
 
¶7.  ACCORDING TO ARTICLE 22 OF THE IMPLEMENTATION LAW, 
"ALL THE DEADLINES DEFINED BY THE CONSTITUTIONAL 
CHARTER WILL COME INTO EFFECT FROM THE DAY THE 
CONSTITUTIONAL CHARTER COMES INTO EFFECT." HENCE, 
DIRECT ELECTIONS FOR THE UNION ASSEMBLY'S DEPUTIES MUST 
TAKE PLACE IN FEBRUARY 2005. LIKEWISE, NEITHER REPUBLIC 
CAN SCHEDULE A REFERENDUM ON SECEDING FROM THE JOINT 
STATE UNTIL FEBRUARY 2006, ALTHOUGH MONTENEGRO'S PRO- 
INDEPENDENCE PARTIES STILL MAY TRY TO POINT TO MARCH 
14, 2005, THREE YEARS AFTER THE SIGNING OF THE BELGRADE 
AGREEMENT, AS THE EARLIEST DATE WHEN THEY CAN SLATE 
SUCH A REFERENDUM. 
 
COMPOSITION OF THE NEW UNION ASSEMBLY 
------------------------------------- 
¶8. THE NEW ASSEMBLY WILL COMPRISE 126 DEPUTIES, 91 FROM 
SERBIA, 35 FROM MONTENEGRO. ACCORDING TO MIODRAG ISAKOV 
OF SERBIA'S RULING DOS COALITION, DOS WILL HAVE 47 
SEATS, DSS 16, THE SOCIALIST PARTY OF SERBIA (SPS) 12, 
THE SERBIAN RADICAL PARTY 8, THE PARTY OF SERBIAN UNITY 
4, NEW SERBIA 2, AND THE SPS SPLINTER SOCIALIST 
PEOPLE'S PARTY (SNP) 2. OF THE 35 MONTENEGRIN SEATS, 
SOURCES SAY THAT 21 WILL BE DISTRIBUTED AMONG THE 
RULING COALITION OF THE DEMOCRATIC PARTY OF SOCIALISTS, 
SOCIAL DEMOCRATIC PARTY (SDP), AND ETHNIC ALBANIAN 
PARTY AND THE REMAINING 14 WILL GO TO THE OPPOSITION 
TOGETHER FOR CHANGES BLOC. 
 
¶9. THE TWO RULING COALITIONS THEREFORE HOLD A FEW SEATS 
MORE THAN THE 64 SEATS NECESSARY FOR A MAJORITY VOTE IN 
THE NEW UNION ASSEMBLY. IF THE TREND OF COOPERATION 
BETWEEN THE RULING SERBIAN AND MONTENEGRIN COALITIONS 
ESTABLISHED DURING THE DRAFTING OF THE CONSTITUTIONAL 
CHARTER CONTINUES, OFFICIALS OF THE NEW UNION SHOULD BE 
ABLE TO STICK CLOSELY TO THE TIMETABLE SET FORTH ABOVE. 
NONETHELESS, THE 16 REMAINING PARTIES IN THE DOS 
COALITION MAINTAIN VARYING DEGREES OF LOYALTY TO 
SERBIAN PRIME MINISTER DJINDJIC, AND MONTENEGRIN PRIME 
MINISTER DJUKANOVIC'S COALITION PARTNERS HAVE ALREADY 
SHOWED THEIR INDEPENDENCE BY VOTING AGAINST ADOPTION OF 
THE CONSTITUTIONAL CHARTER. 
 
SOLANA SEEKS TO SUSTAIN MOMENTUM 
-------------------------------- 
¶10. EU DELEGATION OFFICIALS CONFIRMED TO POST THAT EU 
HIGH REPRESENTATIVE JAVIER SOLANA PLANS TO VISIT 
BELGRADE AND PODGORICA ON FEBRUARY 6 TO CONGRATULATE 
OFFICIALS IN BOTH CAPITALS ON THE OFFICIAL ADOPTION OF 
THE CHARTER AND THE ESTABLISHMENT OF THE STATE UNION OF 
SERBIA AND MONTENEGRO. HIS PRIMARY MESSAGE WILL BE THAT 
THE REAL WORK OF ESTABLISHING A FUNCTIONING JOINT STATE 
AND IMPLEMENTING AN ACTION PLAN FOR AN INTERNAL MARKET 
AND FOREIGN TRADE HAS ONLY JUST BEGUN. 
 
 
COMMENT 
------- 
¶11. ALTHOUGH AN IMPORTANT EVENT, THE END OF 
"YUGOSLAVIA" AND THE BEGINNING OF "SERBIA AND 
MONTENEGRO" WAS GREETED WITH LITTLE JOY IN EITHER 
SERBIA OR MONTENEGRO.  THE LONG DELAY IN CRAFTING THE 
CONSTITUTIONAL CHARTER AND THE FRAGILITY OF THE NEW 
UNION HAVE LEFT THE PUBLIC WITH AN APPREHENSIVE 
FEELING.  IT IS INAUSPICIOUS (ALBEIT NOT SURPRISING) 
THAT KEY OFFICIALS ALREADY BEGAN IGNORING PROVISIONS OF 
THE CONSTITUTIONAL CHARTER EVEN BEFORE ITS OFFICIAL 
PROCLAMATION. FOR INSTANCE, SERBIAN PM DJINDJIC 
INDICATED PUBLICLY THAT HE AND MONTENEGRIN PM 
DJUKANOVIC HAVE AGREED THAT TWO SERBS WILL HOLD THE 
FOREIGN AND DEFENSE MINISTER POSTS IN THE NEW UNION, 
EVEN THOUGH ARTICLE 14 OF THE CHARTER SPECIFICALLY 
STIPULATES THAT THESE TWO MINISTERS SHALL BE FROM 
DIFFERENT MEMBER STATES.  SIMILARLY, ON FEBRUARY 1, 
DJINDJIC SAID THAT SERBIA'S NEW CONSTITUTION COULD BE 
COMPLETED BY SEPTEMBER, EVEN THOUGH THE PARLIAMENT IS 
OBLIGED BY THE CHARTER TO ADOPT THE NEW CONSTITUTION BY 
JUNE 30. 
 
¶12. ON THIS BASIS ALONE, WE CAN BE EXPECT THAT SERBIA 
AND MONTENEGRO WILL NOT KEEP PACE WITH THE FIRM 
TIMETABLE FOR ESTABLISHING A FUNCTIONING JOINT STATE 
SET FORTH IN THE IMPLEMENTATION LAW. THE MOST 
COMPELLING INCENTIVES FOR THE TWO MEMBER STATES TO DO 
SO, HOWEVER, WILL CONTINUE TO BE PROVIDED BY THE 
INTERNATIONAL COMMUNITY. IN THE NEAR-TERM, THE NEW 
ASSEMBLY'S ENACTMENT OF A LAW ON THE TEMPORARY 
FINANCING OF THE STATE UNION IS A PREREQUISITE FOR THE 
IMF BOARD OF DIRECTORS TO HOLD AN ALREADY TWICE-DELAYED 
MEETING TO REVIEW COMPLIANCE WITH THE FUND'S THREE-YEAR 
EXTENDED ARRANGEMENT (EA) WITH SERBIA AND MONTENEGRO 
AND TO APPROVE THE THIRD TRANCHE OF THE EA. IN 
ADDITION, SOLANA IS LIKELY TO REMIND OFFICIALS THAT THE 
LAUNCHING OF THE EU'S STABILIZATION AND ASSOCIATION 
PROCESS, STARTING WITH A FEASIBILITY STUDY, IS 
CONDITIONED ON THE DRAFTING OF A DETAILED ACTION PLAN 
OF ECONOMIC HARMONIZATION BY THE END OF MARCH. 
 
 
MONTGOMERY