2006 is an important year for the political future of Serbia and the stability of the entire region. Both the European Union and the international community have a great deal at play. Five years after the end of the war in Kosovo and the fall of Slobodan Milosevic none of the issues seem to have been resolved in Serbia, whether we speak of economic development, the stabilisation of the institutions or the settlement of border disputes. How far has progress been made in democratising Serbia?

After the fall of Slobodan Milosevic, Serbia seemed to be set for rapid democratisation and should finally have been able to make up for lost time in drawing closer to the European Union: this at least was the new Serb leaders' programme after the former dictator's defeat. But things turned out to be much more difficult both on a domestic level and in Serbia's relations with the European Union. As always the glass is half empty or half full: undeniable progress has been made in Serbia-Montenegro over the last six years. But we have also discovered that it was not enough to be rid of Milosevic to be rid of the main obstacle in the success of Serbia's transition over to democracy ie the influence of nationalism and the unresolved problems associated with the national question. The simple, or rather simplistic scheme whereby on the one hand reforming pro-European Union democrats wanted both economic and political changes– the issue of NATO is generally avoided and is even taboo in the wake of the military intervention in 1999 - and on the other nationalists swathed in scenarios of the past make it impossible to understand the developments in the political arena in Serbia since the fall of Milosevic. Although the influence of nationalism is not equally spread it is shared mostly by the Serb political elites and the main ruling parties. Hence instead of there being a scission between pro-European democrats and authoritarian nationalists as in other post –Communist States after 1989, in Serbia there is a continuum ranging from moderate nationalists who are more open and more democratic, to the most extreme nationalists in the Party led by Vojislav Seselj (Radical Party) or the party of Slobodan Milosevic (Socialist Party, SPS). This continuum persists and it will continue to poison Serb political life as long as territorial and border issues have not been resolved.

This is one of the main lessons that has been learned from what happened in the Balkans and more particularly in Serbia over the last decade: transition to democracy has little chance of succeeding if there is no consensus on the territory of the State, that is if we do not know into which context this democracy fits. To a great degree this is also one of the problems facing Bosnia-Herzegovina, whose institutional and political configuration mid-term we know little about. With regard to Kosovo we talk of the Albanian issue but there is also a Serb issue. All of Serbia's Balkan neighbours are expecting an answer to this question. The wars undertaken by Milosevic in the 1990's to some extent were an attempt to resolve the issue: first by maintaining Yugoslavia's integrity, even by force, and then establishing a "Great Serbia". Now we have to manage that post-war heritage ie the status of Kosovo and the question of Montenegro. Although the case of Montenegro a priori appears easier to settle, notably thanks to the existence of very strong historical links between Serbia and Montenegro and of a common language, it is difficult to find a solution acceptable to all of the political elites in Belgrade and Podgorica. As long as the political agenda is blocked by this type of question, the danger of nationalist excesses will remain strong and potentially disruptive for the entire region.

The national issue used by the nationalists and radicals is not however the only one weighing over the future of Serbia-Montenegro and the region. The socio-economic situation of the countries of former Yugoslavia is especially difficult. In Serbia the Milosevic years have left an extremely crushing legacy in their wake. In ten years the GDP per capita has dropped tenfold. Although growth has started again the GDP is only half of that in 1989. In a country where one third of the population is unemployed, where there is an overall impoversihment of the intellectual community and of what might be the beginnings of a middle class, there is no longer any social base on which to build a new democracy. Everywhere in Central Europe the new democratic parties have anchored themselves amongst the new middle class or amongst the new entrepreneurs. In Serbia the process is much slower and much more difficult allowing more room for the populist arguments which find strength in social discontent and exacerbate the national issue. In these circumstances it is difficult for a government to launch a programme that would in essence imply economic deregulation (privatisation, restructuring) even if this went hand in hand with a promise of integrating the European Union.

How are Montenegro's overtures for independence seen in Serbia? How do these interfere in the debate on the question of Serb identity?

Until recently the Serbs thought it almost impossible for Montenegro to claim its independence. Montenegrins were considered as every close counsins and during the war in Bosnia-Herzegovina it was taken for granted that Montenegro was part of the Serb sphere of influence. An initial fissure in Serb-Montenegrin relations appeared when Milo Djukanovic cut ties with Slobodan Milosevic and distanced himself from the Serb dictator from 1997-8 on. At that time the Serb opposition considered Montenegro as an area of relative freedom in what was left of Yugoslavia. It was then believed that the discord was just political, linked to the nature of the Milosevic regime and these overtures for independence were related to the rejection of an authoritarian government; however once this regime had dissolved the desire for independence no longer had any reason to exist. But this was not the case and Milo Djukanovic has continued on this trajectory whilst Montenegrin society is divided on the question of the possibility of independence.

At first lack of understanding reigned in Serbia and this was all the greater since there are many mixed Serb and Montenegrin families and many Montenegrins living in Belgrade working for the government. For the Serbs, Montenegro represents the last access to the sea conserved by Serbia upon the dissolution of Yugoslavia. The stakes are not only psychological or about identity, they are also geo-political and strategic (the naval base in the Bay of Kotor).

Right now we are in a new phase and the Serbs have adopted the following approach: either build a functional federation, implying under Serbia's tutelage - in other terms return to a "fair" relationship between a small country of 650,000 inhabitants (Montenegro) and Serbia (10.8 million inhabitants including Kosovo) - or proceed to a friendly separation. The Czech/Slovak model of a "Velvet Divorce" was mentioned by Montenegrin independence supporters indicating that the independence process does not necessarily lead to war or conflict, explaining that they did not want to be held back by Serbia in the democratisation process and the rapprochement with the European Union. Whilst Serbia is committed on the road towards European democracy the Montenegrin approach has changed: this implies continuing on two parallel but convergent routes towards the European Union.

Recently the Serbs seem to have adopted this plan recalling however that the option of separation is not their preference and that they would like to maintain a functional federation. This development is important: it means that the dangers of conflict or blunder if the answer to the referendum on Montenegro's independence is positive (planned for 21st May) are relatively limited. It also trusts in the idea that by avoiding all threatening attitudes the Serbs might have more of a chance in winning the population over during the referendum.

Pressure on the part of the international community and the European Union is moving in the direction of maintaining a Serbia-Montenegrin federation. What impact does this have on public opinion on either side?

The European Union was at the origin of the agreement that in 2003 established this new entity of "Serbia-Montenegro". This meant creating a tailored made entity at the request of and thanks to the mediation on the part of the CFSP High Representative, Javier Solana. This is why that this entity is nicknamed "Solania". It was the first time that the Union found itself directly involved in "state-building". The European Union opted for this solution to gain time; it enabled the postponement of a decision that might have had serious repercussions on the future status of Kosovo and on the stability of the region. Until then the Union satisfied itself with positions of principle such as the Badinter Commission (1991-92) which explained from a relatively theoretical point of view the conditions whereby a national entity had the right to secession (yes, if you are a republic, no, if you are an autonomous province). The European Commission is involved at present in the creation of a new State entity even though this is only provisional. It imposed a clause on Montenegro that will only make the secessionist vote valid if the "yes" achieves more than 55 % of the vote and if the participation rate rises beyond 50 %. This means that the hybrid entity was intended to be maintained at all costs. Although it wants to maintain a common State it is vital that the Union prepares itself for other options.

The question of Montenegro is important for the Serbs because it comes at a time when Serbia is restoring State authority and is setting out a new Constitution. The stakes are not only constitutional or legal but they are also political: this is about the nature of the new State. After the failed dream of "Grand Serbia" and after ten years of war, reality is about to turn a small Serbia into a Nation-State. If Montenegro chooses not to be part of this State which is difficult to qualify - "post-Yugoslavia", or "post-New Serbia"? - this might have repercussions on the future status of Kosovo and on Serbia's relations with the Republika Srpska of Bosnia-Herzegovina.

As for Kosovo one thing appears to be rather reassuring; most observers exclude a violent hypothesis. The settlement of the Montenegrin question will serve as a precedent. If Serbia and Montenegro separate it will be difficult to explain to the Kosovars that the 650,000 Montenegrins, - who are much closer to the Serbs, since they are Slavs, with the same language and religion, in short they are the Serbs' "cousins" - have the right to choose independence whilst the Albanians, who are not Slavs, do not speak the same language and who are greater in number than the Montenegrins are to remain a common State with Serbia. The traditional argument might now be put forward stating that there is already an Albanian State and that it is impossible to create another. This argument refers to the distinction employed by the Tito system between those who had to the right to a republic and those who only had the right to an autonomous province, between those who were a nation and those who only were a national minority, in other terms, between those who might theoretically aspire to secession and establish a State and those who could not. But this is an extremely academic argument with regard to the reality of the field. It is difficult to imagine the Kosovars being satisfied watching Montenegrin independence which is accepted by the international community without demanding a similar solution in Kosovo.

The Serbs, who seem to admit the possible separation from Montenegro, do not have the same approach with regard to the possible independence of Kosovo. Why?

With regard to Montenegro eveyone agrees that it is possible to come to an aimiable solution rapidly. But the same does not apply to the status of Kosovo about which it is often repeated "more than autonomy and less than independence". The principle of "substantial autonomy" for Kosovo is exactly what was offered to the Serbs during the Rambouillet Conference in 1999 and which was refused at the time. Part of the Serb delegation at Rambouillet was Vuk Draskovic, the present Foreign Minister for Serbia-Montenegro. The Serbs did not want substantial autonomy in 1999. They will have independence in 2006. In effect one hardly perceives what the term "substantial autonomy" means since Yugoslavia no longer exists and even Montenegro is alluding to independence.

There seems to be a consensus in the West in admitting that there is hardly any other realistic alternative than Kosovo's independence. How open are the negotiations really just a few months before a decision which is supposed to be final?

In fine it will be a UN decision. In order to gain an idea of the international community's position we should read the report by Norwegian Kai Eide, UN special envoy in Kosovo, listen to the Finn Martti Ahtisaari, who is co-ordinating the negotations on behalf of the UN and the Austrian Stefan Lehne, the European Union's representative. The contact group (USA, UK, France, Germany, Italy and Russia) drew up a certain number of common positions, conditions of principle in order to address these negotiations. The international community is recommending a type of conditional independence for Kosovo. It is crucial to understand the idea is not to impose an external solution but that the final compromise is the result of direct negotiation between the democratic Serb and Albanian representatives. Everyone wants an agreement on the status of Kosovo to be found within a reasonable amount of time ie one year. The regional context might help in this: if Montenegro proclaims and win its independence this could cause a certain number of decisions to be taken rapidly and clarify positions.

The Serbs are now saying of Kosovo "everything but independence", whilst the Albanians repeat "nothing but independence". To a great degree these are pre-negotiation stances but nevertheless the question arises with regard to the ability of those involved to come to a compromise. The negotiators must be able to "sell" what they are negotiating to public opinion. This is a vital part of the process. But Serb opinion has not been prepared to face reality, ie to assume the consequences of a decade of lost wars. Most Serbs did understand that well when Milosevic fell from power. It was then that the new political Serb leaders should have been honest. They had an opportunity to say what they thought: "All of this is a tragedy for Serbia. It is very painful. But the one responsible for the ills of Serbia are Slobodan Milosevic and his regime. They started in Kosovo. Everything ended in Kosovo ten years later. The loss of Kosovo is a tragedy for Serbia but it is Milosevic's legacy. We are now looking to the future and not to the past, towards Brussels and not to Pristina." Instead of speaking like this the political elites of Serbia have adopted an ambiguous national approach over the last few years. Neither Kostunica, nor Djindjic - who was undoubtedly the most accommodating on these issues - had the courage to say what would have been intelligible and understood by most Serbs after 2000.

Serbia believes it has to protect the Serbs of Kosovo. It is true that with regard to security, minority rights and the political integration of Serbs in Kosovo, the present situation is far from satisfactory. This argument enables the Serbs to maintain several options open including that of the partition of Kosovo, ie the annexation to Serbia of the northern enclave of Mitrovica, which, it is true, operates closely with Belgrade (since its institutions are even financed by Serbia). Such a solution would however cause a certain number of problems firstly because more than half of the Serbs of Kosovo live beyond this enclave, which means that a partition would inevitably lead to more displacements on the part of the population; and then if this territory is annexed to Serbia the land in the south of Serbia, the Presevo Valley, would then be annexed to Kosovo in exchange. The hypothesis of a partition of Kosovo would finally come down to an exchange of territories.

Does the hypothesis of the partition of Kosovo run the risk of affecting the Republika Srpska of Bosnia Herzegovina which may adopt the same stance and request its incorporation into Serbia?

Any solution offered within a context can become a precedent for other configurations in the region. A partition of Kosovo would be a dangerous precedent for Bosnia that might possibly compromise any new constitutional project launched for the tenth anniversary of the Dayton Agreements with the goal of creating a central functional State. There is a danger of adopting the Dayton approach whereby the two entities could maintain privileged relations with the neighbouring State although it is now a question of withdrawing from the Dayton framework which is no longer tenable.

This might have extremely negative effects on Macedonia. The present Macedonian compromise finds support in a new Constitution that guarantees Albanian inclusion in Macedonian institutions (administration, police ...) as well as administrative decentralisation. Any future partition of Kosovo might be extremely destabilising for multiethnic Macedonia.

This option of partition - which would be the Serb choice - would not only be totally unacceptable for the Albanians but also a potentially destabilising factor for neighbouring Bosnia Herzegovina and Macedonia. It also seems unacceptable to the international community which would have intervened in Kosovo in order to prevent ethnic cleansing to then be obliged to accept the partition of a territory for ethnic reasons.

If there is a whole range of arguments against the option of the partition of Kosovo, there is no ideal solution either. The International Commission for Kosovo, of which I was a part, delivered a report to Kofi Annan in the autumn of 2000 putting forward the idea of "conditional independence" for Kosovo, which has now been taken up and accepted by everyone. In a way we proceded by elimination. We rejected the idea of partition. We considered the return of Kosovo to Serbia was unthinkable even under the cover of "autonomy" or as suggest the Serbs "improved autonomy". None of these would be acceptable to the Albanians. This hypothesis was therefore discarded. Another hypothesis was to continue the international protectorate. But protectorates wear out and end up being challenged. In February 2004 we witnessed outbreaks of violence in Kosovo demonstrating just how fragile the situation is. The protectorate approach is untenable long term. This is the lesson learnt from Bosnia Herzegovina where ten years after the signature of the Dayton Agreements the main task is the successful transfer of political authoritiy over to the national institutions. The former UN representative in Bosnia-Herzegovina, Englishman Paddy Ashdown (who was succeeded by the German Christian Schwarz-Schilling on 31st January last) achieved some good work but he was accused of being a kind of a "proconsul" of a protectorate which totally denatured democracy. What purpose do democratically elected institutions serve if they are substituted by ideas forced on them from outside? In the course of time the option of extending the protectorate was therefore exhausted and would not be a solution for the future.

The last option which is of course imperfect but nevertheless considered as being a lesser evil is conditional independence. Yugoslavia no longer exists; this reality has to be accepted. Kosovo will not return to the tutelage of Serbia, nor will it be part of a common State with Serbia. In this manner we can talk of independence. We are not talking of independence or sovereignty in the 19th century sense of the word but conditional independence or even shared sovereignty. The new entity would clearly abandon all desire to modify its borders (therefore no Grand Albania) and commit itself to respect democratic freedom, minority rights, the protection of historical Serb sites and orthodox Serb heritage in Kosovo which symbolically is extremely strong for Serbia. These conditions are important for both the Serbs and the Albanians. The question at stake is the one of Kosovo's political identity in the Balkans, while security and neighbourhood issues remain vital.

The conditional nature of independence would no longer be an affair for the UN but for the European Union: since the process is only viable if everyone has the aim of joining the Union. The concept of shared sovereignty finds support in the idea that the Kosovars share a certain number of principles, values and legal norms with their European neighbours - including their Serb neighbours –and that thanks to the respect of their minorities, democracy and the commitment to the European project, all of the populations in the region are moving in the same direction. This is the philosophy behind "conditional independence" within a European context.

Are the Albanian and Serb elites ready for this? Negotiations have just started and each side has adopted hard stances for the time being which are essentially positions always adopted at the launch of negotiations. But the initial stances must be distinguished in order to have room for manoeuvre in the discussions and the reality of internal political constraints that reduce this very same room for manoeuvre. It is not easy to be elected in Serbia with a courageous stance vis à vis Kosovo. No Serb leader wants to enter history as the one who lost Kosovo.

Will Milosevic's death make the processus more complicated by providing additional arguments for the anti-Western opposition in Serbia?

Milosevic's disappearance may have negative effects on the process. Judging from the first reactions in Serbia it will strengthen the attitude of victimisation which is already quite widespread. Even though the majority of the population has other more prosaic worries and wants to turn over a new leaf, the nationalists in the Milosevic's Socialist Party and especially those in the Seselj's Radical Party (on trial in The Hague) will be able to rekindle their campaign of denigration against the ICTY and more generally against the West who is deemed hostile to the Serbs and indulgent towards the Croats, Bosniac Muslims and the Kosovars. Milosevic's death is also a terrible blow for the trial that was to come to an end shortly at the ICTY. The victims of "ethnic cleansing" in Bosnia and Kosovo will not see the main culprit condemned. The trial was undoubtedly over ambitious and too long.

Serbia's relations with the European Union might also suffer the effects of a Head of State's extradition under international pressure and whose unfinished trial leaves Belgrade with other urgent demands for extradition. The Union has just given Serbia an ultimatum demanding the surrender of Karadzic and Mladic, responsible for massacres in Bosnia by the end of March in order for the negotiations on a Stabilisation and Association Agreement to continue. Karadzic is hiding in Bosnia but General Mladic is in Serbia protected by some parts of the army. It is the present Prime Minister Kostunica who signed his retirement papers and it is difficult to imagine him challenging the army to respond to the request on the part of the international tribunal, which most Serbs deem to be discredited. The tribunal's discreditation might reflect on the European Union's ability in persuading the Serbs that facing up to their recent past is a condition of entry into the European family.

However isn't the hope of joining or shouldn't the hope of joining the European Union be the only lever of "exchange" that the Serb political elites enjoy with public opinion?

It is the only plausible one. The Serb-Albanian negotiations on Kosovo are the source of several major issues: the Serb minorities, patrimony, the State of Law, borders, the movement of people and goods as well as security. All of these questions are interlinked and associated with the negotiation of a compromise on the status of Kosovo. Everyone has to make major concessions in comparison with the initial objectives that were either to maintain Kosovo within a kind of reshaped Serbia or to achieve full independence without taking any other consideration in account. Both the Serbs and the Albanians will only be able to adopt intermediary positions or accept a compromise on condition of achieving an additional advantage: the hope of joining the European Union. In this manner the European context is unavoidable for the success of the negotiations.

The European context means that for both sides it will be possible if they progress in the right direction, if they come to a compromise and if they stabilise their democratic institutions; then they might finally aspire to joining the European Union. This is what happened with Croatia which has just succeeded in opening negotiations with the EU, with Macedonia which has just been acknowledged by the Union as a candidate country and even with Bosnia Herzegovina and Albania which have just started negociations in view of signing a Stabilisation and Association Agreement with the Union. This is the traditional scenario for enlargement: signature of a Stabilisation and Association Agreement, acknowledgement of candidate status, opening of negotiations and finally the signing of the Membership Agreement. In spite of the French and Dutch referenda the process is moving forwards. The question remains however to see whether this traditional enlargement scenario offered to the Balkan States is adequate to create the European context enabling the achievement of compromise on the future of Montenegro and the status of Kosovo. This is not so certain.

As soon as the negotiations have been concluded on each of the themes, both Serb and Kosovar representatives will almost immediately have to sign a European agreement that will finalise their political membership of the European Union. No one doubts the entitlement of the countries to enter the European Union. They must at first be offered political membership, along with the practical scheduled modalities to reach full membership over time. This proposal is not easy to "sell" to the EU Member States but this is the only way that the Serbs will accept a border between Serbia and Kosovo and for the Albanians of Kosovo to accept an open border with Serbia whereby the latter will have the right to oversee, not in the sense of permanent interference, but to entertain a normal relationship with the Serbs of Kosovo. This new border would immediately be rendered relative by belonging to Europe or by the short term perspective of belonging to the Union. In other words a border would be created whose importance would immediately be rendered relative. We acknowledge Kosovo's new sovereignty but it is shared sovereignty. There would be an independence agreement but independence which is conditional. Each of these terms is therefore "defused" of their explosive potential with which they traditionally go hand in hand: ethnic nationalism, secession, independence.

Is the European Union able to make a proposal such as this? We just have to look at the surveys on enlargement perspectives. Although public opinion is in favour of enlarging with regard to Norway and Switzerland, it is hostile to enlarging with regard to Turkey. The Balkans are midway between the two. Of course the European Union is undergoing a difficult time at present in the wake of the French and Dutch referenda but there are commitments for the Balkans with which the EU cannot afford to make mistakes. The issue of Kosovo's final status is the most important one of these.

What would be the cost for the EU if it does not succeed in meeting these challenges?

This is not easy to estimate. It is not so much the cost of enlarging but that of not enlarging. Let those who want to have an idea of what the cost of not enlarging might be remember how the Balkans were in the 1990's. It was expensive for the international community: the military and reconstruction costs together were valued at around 100 billion dollars.

We must bear the issue of cost in mind but we must also look into the political feasibility of such a proposal. The only way of succeeding in the Balkans is to remember that the EU committed itself to these countries at the European Council of Thessaloniki in 2003. The Union's credibility depends on sticking to these commitments. Given the number of candidates or potential candidates it is vital to separate the Balkan countries' candidature from those of the Ukraine and Turkey. The announcement on 3rd October last of the simultaneous opening of negotiations with Turkey and Croatia was not to the Balkans' advantage.

To conclude we must remember that the Balkans are not like any other neighbours for the European Union. Europe cannot be allowed failure in the Balkans, not only because it made an explicit promise at the European Council of Thessaloniki, repeated at the European Council last June, but above all because Europe already failed in the Balkans and cannot now afford to make any mistakes. How credible will the Union be in interventions in the Middle East or in other regions of the world if it is unable to manage its own backyard? The credibility of the CFSP also depends on this. The Balkans are the European test 'par excellence'. The rest is of trifling importance.

We must also remember the commitments: the issues of Montenegro and Kosovo must be resolved rapidly. This calls for us to rethink enlargement. The traditional enlargement mode has been proven in Central Europe, but it might not be the best adapted to the problems of the Balkans. In the West some are reticent of and even fear the unending enlargment of the European Union. The best way to avoid the Balkans falling victim to this fear of the void, or even blind pursuit in spite of the evidence, would be to establish a hierarchy of priorities for the Union: first the Balkan countries, then possibly announce other candidatures (Turkey, Ukraine) without avoiding however, the issue of limiting the enlargement process.

The 2006 calendar of events in the Balkans leaves no room for postponing these commitments; it is vital for the European perspective to be clearly visible for the countries in the region. This will enable us to point out that the Balkans is a European issue and that the Union does not have the right to fail in this part of Europe.