Yugoslavia looks to the future

Serbs celebrate outside the parliament building

Yugoslavia's new President Vojislav Kostunica has spelt out the challenges facing him at home and abroad as he begins building a new administration.

He admitted that he faced problems reconciling Serbia with Montenegro, its independence-minded partner in the Yugoslav federation.

He also spoke of the need to normalise relations with other countries after the downfall of Slobodan Milosevic.

Mr Kostunica, an ardent Serb nationalist, was elected on 24 September but Slobodan Milosevic only admitted defeat on Friday after a popular revolt.

In his first interview since being sworn in late on Saturday he reiterated his determination not to give up the Serbian province of Kosovo, which is currently under UN protection and where a majority want independence.

Kostunica: New era for Yugoslavia

The new president also warned Montenegro, Serbia's smaller sister republic in the Yugoslav federation, against being tempted to exploit the situation to secede.

"Reconciliation between Serbia and Montenegro is the task of tasks," Mr Kostunica said.

Independence

The AFP news agency said Montenegro's President Milo Djukanovic did not attend Mr Kostunica's swearing-in ceremony in Belgrade.

Yugoslavia and Serbia have joined the community of democratic nations

President Vojislav Kostunica

Instead, Mr Djukanovic warned that Montenegro would take the road to independence if ties between the two republics were not re-assessed.

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Another big barrier to peace in the Balkans remains the fate of Kosovo.

The parliament was looted and burnt

Mr Kostunica said he was determined the province would remain part of Yugoslavia.

But a former member of the Kosovo Liberation Army (KLA), Jakup Krasniqi, denounced what he called Mr Kostunica's "extreme nationalism" and predicted Kosovo would walk to independence.

Sanctions

Mr Kostunica said his other priority was the normalisation of Yugoslavia's ties with the international community.

The United States has appeared to soften its demand that Mr Milosevic, be extradited immediately to the International War Crimes Tribunal in The Hague.

US Secretary of State Madeleine Albright on Sunday refused to link economic aid to Mr Milosevic's extradition, saying Mr Kostunica must be given time to consolidate his achievements.

In the capital Belgrade, people are eagerly awaiting the expected lifting of sanctions by the West on Monday.

Germany has already announced nearly $900,000 of aid to Yugoslavia to help clear the River Danube, which is blocked by debris from last year's Nato bombing of Serbia.

Meanwhile, the Yugoslav currency, the dinar, has continued its dramatic recovery on the black market - helped by the prospect of an early end to sanctions.

Milosevic

Mr Kostunica is now turning his attention to forming a new government.

One of his big challenges is that all of Serbia's key institutions are still run by supporters of Mr Milosevic.

Mr Milosevic's Socialist Party of Serbia is the largest in parliament but will not have a majority unless it can retain the support of its former allies, including the Montenegrin socialist party, SNP.

Mr Milosevic himself has said he will remain in Yugoslavia as a political force.

But the UN War Crimes Tribunal said on Sunday it was seeking to indict Mr Milosevic by December on further charges of genocide in Bosnia and Croatia.

Mr Milosevic and four members of his cabinet were charged last year with war crimes against ethnic Albanians in Kosovo.

Mr Kostunica has already said he will not hand over any Yugoslavs to the tribunal which he has dismissed as a political tool of the US.