BELGRADE, 9 December 2001

• FRENCH PRESIDENT LAYS FLOWERS ON MEMORIAL TO FRANCE IN BELGRADE
• YUGOSLAV, FRENCH PRESIDENTS SAY YUGOSLAVIA'S ASSOCIATION WITH EU NATURAL
• PRESIDENT KOSTUNICA HOSTS DINNER FOR PRESIDENT CHIRAC
• YUGOSLAV PREMIER CONFERS WITH FRENCH PRESIDENT
• FRANCE FULLY SUPPORTS SERBIA'S REFORMS, DJINDJIC
• COVIC SAYS CHIRAC PRAISED SERBS FOR TAKING PART IN KOSOVO ELECTIONS
• FRENCH, MONTENEGRIN PRESIDENTS HOLD TALKS IN BELGRADE
• YUGOSLAVIA'S DESTINY IS IN EUROPE, CHIRAC
• CHIRAC DOUBTS EU WOULD RECOGNIZE INDEPENDENT MONTENEGRO
• CHIRAC CATEGORICALLY VETOED BOMBING OF BELGRADE BRIDGES IN 1999
• YUGOSLAV LOWER HOUSE SPEAKER CONFERS WITH FRENCH PARLIAMENTARIANS
• YUGOSLAV UPPER HOUSE SPEAKER CONFERS WITH FRENCH PARLIAMENTARIANS
• YUGOSLAV, FRENCH FOREIGN MINISTERS CONFER IN BELGRADE
• CHIRAC ACQUAINTED WITH PROBLEM OF MISSING, ABDUCTED KOSOVO RESIDENTS

• KOSTUNICA AND LABUS FOR OPENING DIALOGUE ON REORGANIZING FEDERATION
• TALKS ONLY ON REDEFINING RELATIONS WITHIN FEDERATION, YUGOSLAV PM PESIC
• LABUS: SERBIA, MONTENEGRO SHOULD CONSIDER THE DESTINY OF THEIR CITIZENS

• MICUNOVIC: FOREIGN POLICY PRIORITY - ESTABLISHMENT OF RELATIONS WITH NEIGHBOURS
• CROATIA AND YUGOSLAVIA NEGOTIATE AGREEMENT ON FREE TRADE
• BOSNIA-HERZEGOVINA, YUGOSLAVIA DETERMINE 47 PERCENT OF COMMON BORDER
• RULE OF LAW, POLITICAL STABILITY CRUCIAL FOR REFORMS - CENTRAL BANK GOVERNOR
• YUGOSLAVIA GETS 70-ML-DLR LOAN FROM WORLD BANK

• SWITZERLAND TO PROVIDE AID TO SERBIA FOR ENVIRONMENT PROTECTION
• DOS SHOULD FORGE NEW COALITION AGREEMENT FOR ONE YEAR, LABUS

• KOSTUNICA-DEPUTIES: ALL DIVISIONS AMONG KOSOVO SERBS SHOULD BE OVERCOME
• DJINDJIC-DEPUTIES: AGREEMENT ON COMMON STRATEGY IN KOSOVO AND METOHIJA
• KOSOVO SERBS SHOULD NOT TAKE PART IN INCOMPLETE INSTITUTIONS - COORDINATOR
• KFOR OPENS PRESS CENTRE IN KOSOVO-METOHIJA
• KFOR SEARCHES, GETS INTO CONFLICT WITH KOSOVO SERBS
• KOSOVO ALBANIAN STUDENT LEADER RELEASED FROM SERBIAN PRISON

BELGRADE, Dec 7 (Tanjug) - French President Jacques Chirac, who is visiting Belgrade at the invitation of Yugoslav President Vojislav Kostunica, Friday laid flowers on the Memorial to France in Belgrade.

An envoy of the French president laid a wreath at the Unknown Soldier's Monument on Mt. Avala near Belgrade.

On his arrival in Belgrade, Chirac conferred with Kostunica and then with Yugoslav Premier Dragisa Pesic.

Friday afternoon, Chirac is due to confer with Montenegrin President Milo Djukanovic, Serbian Premier Zoran Djindjic, President of the Coordinating Center for Kosovo Nebojsa Covic, and families of Serbs reported missing in Kosovo.

Later in the day, Chirac will address university professors, politicians and eminent figures of public and cultural life at the Belgrade College of Philology.

Chirac is accompanied by Foreign Minister Hubert Vedrine, who is conferring behind closed doors with his Yugoslav counterpart Goran Svilanovic.

BELGRADE, Dec 7 (Tanjug) - Yugoslavia's association with the European Union is a natural course, Yugoslav and French Presidents Vojislav Kostunica and Jacques Chirac said Friday in Belgrade.

The first step has already been taken through the talks on stabilization and association, on which an agreement will hopefully be signed soon, Chirac told a press conference he gave jointly with Kostunica after their meeting Friday morning.

Yugoslavia must regain its obviously rightful place in the European family of nations, Chirac said, noting that a series of conditions must be fulfilled prior to association with the EU, such as respect of borders, development of regional cooperation, internal reforms, etc.

Kostunica said that France has contributed much to the democratic changes in Yugoslavia and to its reintegration in Europe.

Chirac, who is on a two-day official visit to Yugoslavia at Kostunica's invitation, said he has come to Belgrade with a message of encouragement and solidarity in the endeavors for overcoming all existing difficulties.

According to Chirac, Yugoslavia has achieved considerable progress in realizing freedom and reforms on its path towards the EU. Progress has also been achieved as regards Yugoslavia's cooperation with the UN War Crimes Tribunal, Chirac said, adding he has reiterated during his meeting with Kostunica France's view that Yugoslavia and other states must cooperate with the Tribunal.Kostunica underlined that Yugoslavia is ready for cooperation with the Tribunal as it is its international commitment, reiterating his view that such cooperation should be based on relevant legislation.

Kostunica also welcomed the EU support in seeking a solution for the relations within the Yugoslav federation.

Yugoslavia accepts this initiative, not as mediation as this is its internal affair, but as an incentive and encouragement for finding a legally valid solution as soon as possible, Kostunica said.

Referring to the relations between Serbia and Montenegro, Chirac underlined that France and the EU share Kostunica's view that a solution must be found within the framework of the joint state on the basis of modalities on which agreement should be reached by the representatives of the two republics and the federation.

Kostunica noted that the more than friendly talk he has had with Chirac, his fifth since the democratic change in Yugoslavia, also focused on bilateral cooperation, which Chirac described as excellent, and on regional stability and the situation in Kosovo.

Yugoslavia's and France's views on all issues are convergent and pave the way for Yugoslavia's integration in European institutions, above all the EU, Kostunica said.

Kostunica proposed, and Chirac approved, Yugoslavia's integration in the international francophone organization.

BELGRADE, Dec 8 (Tanjug) - Yugoslav President Vojislav Kostunica hosted a dinner at the Federation Palace in Belgrade late Friday in honor of French President Jacques Chirac and the members of his delegation who were on a two-day official visit to Yugoslavia.

The dinner was attended by the presidents of both chambers of the federal parliament - Dragoljub Micunovic and Srdja Bozovic, Serbian Prime Minister Zoran Djindjic, members of the federal and Serbian governments, dignitaries of the church, and other officials.

In the toast, President Kostunica paid tribute to France for lifting the sanctions against Yugoslavia and its speedy return to Europe and the international community.

Yugoslavia still expects France's understanding and support in resolving the many state tasks, finding valid solutions for the constitutional, political and economic fundamental reorganization of the state, and optimal and mutually beneficial cooperation with the international community on the whole, Kostunica said.

Returning the toast, President Chirac appealed to Serbia and Montenegro to remain united over the issue of the renewal of the federation, and to stop the process of the fragmentation of the Balkan region.

Chirac concluded that it was their common ambition to see a new Yugoslavia, reconciled with itself and its neighbours, an active partner of Europe, and, one day, a full member of all its institutions.

BELGRADE, Dec 7 (Tanjug) - Yugoslav Premier Dragisa Pesic conferred Friday in Belgrade with visiting French President Jacques Chirac on Yugoslavia's endeavors for integration into the European Union.

A dialogue on all essential issues is the best way of resolving the relations within the Yugoslav federation in order to preserve Yugoslavia as the joint state of Serbia and Montenegro, they underlined.

Politically and economically, a federation has a better chance for stability, economic prosperity and regional cooperation, and for achieving the ultimate goal of joining the EU, Pesic said.

Expressing his support to the federal government, Chirac pointed to France's endeavors and his own readiness to help preserve Yugoslavia as a joint state of Serbia and Montenegro. He added he would endeavour to persuade Montenegrin President Milo Djukanovic to accept this idea, pursue the dialogue on redefining the relations between Serbia and Montenegro within Yugoslavia and avert a referendum.

According to Chirac, the necessary political and democratic conditions for a referendum as a way of taking a decision crucial for the fate of future relations have not been secured.

Such an important decision must not be taken on the basis of momentary emotions, Chirac said. He underlined that the EU doubts that the referendum would be organized in a legal and transparent manner from politic, legal and financial aspects.

The path of disintegration being taken by Montenegro is anachronous and contrary to European political culture and orientation, Chirac noted.

BELGRADE, Dec 7 (Tanjug) - Serbian Prime Minister Zoran Djindjic said late Friday after a meeting with French President Jacques Chirac that full support was secured for the reforms and much praise received for what the Serbian government was doing, particularly in the area of economics. In a statement to reporters after the talks held at the French Embassy in Belgrade, Djindjic said he had asked the French president to encourage French investors to invest in Yugoslavia and that Chirac had agreed to do this.

"We received a promise that France...will support our request to be granted EU candidate status by the year 2004," Djindjic said.

The reformist forces in Serbia were evaluated highly in all their activities, but Chirac said the only small concern was for the stability of the reformist coalition, since stability is necessary for the implementation of reforms, Djindjic said, answering a reporter's question.

Djindjic said he had told Chirac that "there is a critical mass for reforms" in the area of political parties, parliament and citizens. "It is a unique situation in our history that there is such a clear option for the reformist course, and this historic maturity of the people should not be lost in the fog of daily conflicts and polemics," he said.

Regarding the political situation in the country and the region, Djindjic said he had reached full agreement with Chirac "both on the reform of the federation and the implementation of United Nations Resolution 1244 in Kosovo."

Asked if cooperation with The Hague tribunal had been mentioned during his talks with the French president, Djindjic said Chirac had voiced support for "our concept of cooperation at several levels - consultative, in investigations, exchange of information, data on missing persons..and, naturally, the transfer of certain persons who have been indicted."

BELGRADE, Dec 7 (Tanjug) - Yugoslav Coordinating Center for Kosovo and Metohija President Nebojsa Covic said that French President Jacques Chirac had paid tribute in Belgrade on Friday to the Serb national community for taking part in the recent Kosovo elections.

President Chirac said he hoped a joint approach would help calm and stabilize the situation in Kosovo and Metohija, Covic said after his talks with Chirac at the French Embassy.

Covic said it was imperative not to make a single rash move in northern Kosovska Mitrovica, the divided town in northern Kosovo and Metohija, where a minor clash took place this morning between KFOR French troops and local Serbs during a KFOR attempt to search several Serb houses.

He said Chirac had promised to help here. The tense situation in northern Kosovska Mitrovica is merely a consequence of the fact that Serbs have been expelled from all other towns in the province, he said. Elaborating his stand, Covic said there were still about 3,000 ethnic Albanians in northern Kosovska Mitrovica, while none of the 2,600 Serbs and roughly 6,000 Romanies still live in the southern, ethnic Albanian, part of this town. "We agreed we would get direct help from the president and direct cooperation with the new KFOR commander (French General Marcel Valentin), which whom we have had very good relations so far, but wish to promote them even further," Covic said.

He described his talks with Chirac as "very sincere" in the part on resolving problems in Kosovo, and pointed out that it is precisely members of the French contingent who are present in sensitive spots, such as Kosovska Mitrovica.

Covic's talks with Chirac were attended also by Coordinating Center for Kosovo and Metohija vice-presidents, General Ninoslav Krstic and Branislav Krstic.

BELGRADE, Dec 7 (Tanjug) - Montenegrin President Milo Djukanovic said in Belgrade on Friday that he had told French President Jacques Chirac that Montenegro accepts the European Union initiative for the resumption of dialogue with Serbia on organizing relations in the Yugoslav federation.

After the meeting which took place in the French Embassy, Chirac said that the talks would continue in December, if Serbia is ready, and that he expects the definite solution in the first months of 2002.

Montenegro has agreed that all options be discussed - the common state, but also ties between two separate states, or a union of independent states, which could be "an embryo of new regional integrations of the European type," according to Djukanovic.

Montenegro is ready for its relations with Serbia to be based on those of EU member-states - provided such agreement is reached. In that event, a referendum in Montenegro would not be a priority, but an inevitable formality, Djukanovic said.

The talk with Chirac was one between good friends, he said. Podgorica sees the choice between a common state and a union of independent states as the question whether Montenegro will give up its statehood and cultural identity and fit into something "which it would be more proper to call an enlarged Serbia, than federal Yugoslavia."

Djukanovic said Chirac had conveyed to him the warnings which are daily heard from EU representatives - that solutions should be sought within a common state.

In parallel with the dialogue between Serbia and Montenegro, dialogue will be conducted within Montenegro itself on all relevant issues and on the organization of a referendum which will ultimately resolve the state status of Montenegro, Djukanovic said.

BELGRADE, Dec 7 (Tanjug) - French President Jacques Chirac said in a speech delivered at the Faculty of Philology of the University of Belgrade on Friday that Yugoslavia's destiny is in Europe and that Europe and France are waiting for it there.

He expressed the wish that this century be the one of Yugoslavia's reconstruction, when the potential of its talent is expressed. Modern and democratic Yugoslavia should resume its famous history in the fold of the family of Europe which has missed it so much, Chirac said, underscoring that a great future is in store for Yugoslav citizens.

Speaking about the democratic changes in Yugoslavia in early October last year, he said the Serbian people, in liberating themselves, gave an example which should be considered, an example of national unity, courage and freedom. This victory stirred great joy in the hearts of all French citizens, he said.

Chirac said the establishment of a democratic state is a long-term process, and that anyone who is guilty must answer for their crimes in court, regardless of origin or conviction.

The decision to extradite former Yugoslav president Slobodan Milosevic to The Hague tribunal was difficult and brave, but it is a historic decision which promoted human rights in Europe and the world, Chirac said. He expressed satisfaction that the Yugoslav people have set forth on the path of re-examining their own past.

Pointing out that the integration process in Europe is being stepped up, he underscored that it would be anachronous for the countinent's southeast to go through the reverse process of disintegration.

The reconstruction of the Yugoslav federation, with respect for its integrity, is the best solution not only for regional stability, but also for the development of harmonious relations between the different parts of Yugoslav society, Chirac said.

Speaking about the situation in Kosovo and Metohija province, he underscored it should realize absolute essential autonomy, equality for every citizen and every community, in the spirit of United Nations Security Council Resolution 1244.

Urging the creating of conditions for the return of refugees to Kosovo and Metohija, Chirac pointed out the history of French-German relations and stressed that hatred need not be present forever.

Chirac said southeastern Europe had been on the sidelines of integration processes in the past decade and welcomed the return of regional countries to the fold of Europe.

Firmly rooted democracy, restored state authority, respect for national unity, regional cooperation and clearly chartered prospects for entry into the European Union are all elements of the positive dynamics, he said.

Speaking about French-Yugoslav relations, he said that the strength of this political partnership lies in the deep ties of the past and the fostered ambitions. This partnership is firmly directed toward the future of Europe, he said.

The speech was attended by Yugoslav parliament Chamber of Citizens President Dragoljub Micunovic, Serbian Prime Minister Zoran Djindjic, a number of federal and Serbian ministers, Prince Aleksandar Karadjordjevic, and a large number of foreign ambassadors and other public figures.

BELGRADE, Dec 8 (Tanjug) - French President Jacques Chirac said in Belgrade on Saturday he doubted the European Union was ready to recognize an independent Montenegro. Chirac addressed a press conference in Belgrade's Hyatt Hotel at the end of his two-day official visit to Yugoslavia at the invitation of Yugoslav President Vojislav Kostunica. Chirac said he was not speaking on behalf of the European Union, but merely expressing his private opinion.

The French president said he believed the European Union would be very hostile to a complete break of Montenegro's relations with the federal state. This would bring far more problems than advantages, he said.

He said he hoped talks on reorganizing relations between Serbia and Montenegro would continue in the spirit of solidarity and that momentary passions would not triumph and affect the future.

Chirac met in Belgrade with top officials of the federation, Serbia and Montenegro, and said he had not hesitated to stress during all these talks the importance of respect for international laws and cooperation with The Hague tribunal. He said he had intervened in a friendly but unequivocal way to support the transfer of war criminals to The Hague tribunal. He said he had found collocutors open to this hypothesis and who had proven their stand by extraditing former Yugoslav president Slobodan Milosevic to that court. However, there are more criminals who must be apprehended and extradited, he said.

Chirac said he had welcomed Milosevic's extradition, and said he had made it clear here, and would do the same in Zagreb during his visit after Belgrade, that everything must be done to arrest criminals and transfer them to The Hague tribunal for trials.

Asked to comment on the effect of the current parliament crisis on the reforms in Serbia, Chirac said the situation was somewhat turbulent, but stressed that he did not want to interfere in the internal affairs of this friendly country. He said, however, that there were pressing economic and social problems which demand radical and important reforms.

It is necessary to have unity in order to carry out such reforms, he said, and expressed his strong wish that Yugoslavia and Serbia should take the good road which leads to Europe.

Speaking about the situation in Kosovo and Metohija, Chirac pointed out that it was necessary for dialogue and solidarity to triumph. He said he was confident there was no other option or solution than to create conditions for people to rally together.

Extremists of every origin must be fought because they always pour oil on fire, Chirac concluded.

BELGRADE, Dec 8 (Tanjug) - French President Jacques Chirac, who ended an official two-day visit to Yugoslavia on Saturday, told reporters in Belgrade that he had categorically vetoed attacks on Belgrade bridges urged by some military men during the 1999 NATO air strikes on Yugoslavia.

Chirac said there had been much tension over that issue, but that he had never given in. He said he had opposed destruction which would have been absolutely unnecessary and offensive.

France had joined in the operations against the system of former Yugoslav president Slobodan Milosevic and said it did not want a war against the Serbian people, but against the one man, the one system which was unworthy of today's Europe and unworthy of Yugoslavia. That is why the air strikes had to focus strictly on the instruments of that system, Chirac said at the press conference held at Belgrade's Hyatt Hotel.

Asked what he felt while crossing the Belgrade bridges, Chirac said he had been very moved.

BELGRADE, Dec 7 (Tanjug) - Yugoslav parliament lower house Speaker Dragoljub Micunovic conferred Friday in Belgrade with a delegation of French parliamentarians.

French President Jacques Chirac's current visit to Yugoslavia marks the beginning of a new stage in the development of bilateral relations, they noted, the parliamentary press service said.

BELGRADE, Dec 7 (Tanjug) - Yugoslav parliament upper house Speaker Srdja Bozovic briefed Friday a delegation of French parliamentarians on the current political situation in Yugoslavia.

Bozovic described Montenegro's relations with the federation as very low-levl, and underlined that despite recommendations of the European Union, Podgorica has not given up the path of secession.

He, however, noted that forces exist in Montenegro which favor a democratically reformed federation and the preservation of the joint state of Serbia and Montenegro.

This would guarantee the stability of the entire region and make it easier for Yugoslavia, as a single internationally recognized state, to find its place in the international community, Bozovic said.

The French parliamentarians endorsed the view of the international community that the joint state should be preserved, according to the principle of a democratic Montenegro within a democratic Yugoslavia, and that the present federation crisis should be overcome through dialogue.

BELGRADE, Dec 7 (Tanjug) - Yugoslav Foreign Minister Goran Svilanovic and his French counterpart Hubert Vedrine conferred Friday in Belgrade on the current issues of relations within the Yugoslav federation, the situation in Kosovo, Yugoslavia's cooperation with the UN War Crimes Tribunal and the situation in the region, the Yugoslav foreign ministry said in a statement.

Svilanovic said that as regards foreign policy, Yugoslavia gives priority to fostering relations with its neighbours, particularly the states created after the breakup of the former Yugoslavia.

He also confirmed Yugoslavia's commitment to join in European integration processes.

Vedrine paid homage to the Yugoslav authorities for fostering relations with neighbouring countries and the international community.

He also pointed to the traditionally good bilateral relations and underlined that France would continue providing its full support to Yugoslavia in its endeavors to overcome its present problems.

BELGRADE, Dec 8 (Tanjug) - Association of families of missing or abducted residents of Kosovo and Metohija member Olivera Budimir said after a meeting with French President Jacques Chirac in Belgrade late Friday that she was satisfied that the French president had been very well acquainted with the problem of abducted or missing persons.

"We have great hopes that he will do his utmost toward the realization of everything we asked of him, primarily that KFOR forces in Kosovo and Metohija do everything possible to find the living (missing Serbs) in the camps which we still believe to be operational," said Budimir, one of the four-member Association delegation who were received by Chirac at the French Embassy.

The delegation asked also that France advocate an expansion of the mandate of The Hague tribunal, at the United Nations Security Council, to the period following the arrival of KFOR in Kosovo and Metohija in June 1999, and that KFOR provide assistance in the identification of missing or abducted Serbs who are no longer alive, she concluded.

About 1,300 Serbs have disappeared or been abducted in Kosovo and Metohija since the arrival of international forces in the southern Serbian province.

BELGRADE, Dec 7 (Tanjug) - Yugoslav President Vojislav Kostunica and Deputy Premier Miroljub Labus said on Friday that the opening of a comprehensive political dialogue on reorganizing the federation was the best path for resolving the existing conflicts in the federation and in Montenegro.

Kostunica and Labus said in a joint statement released by their offices that they agree with the European Union that maintaining and reorganizing the federation would be an advantage in joining European integrations and for regional stability.

The European Union is welcome to stoke this process, concerning the manner of conducting dialogue and its time framework, the joint statement said.

The European Union, as an alliance which Yugoslavia aspires to join and with which it has entered into the process of negotiations on stabilization and association, also pointed out the need for essential dialogue.

This is why it was proposed during talks with EU foreign policy and security chief Javier Solana in Brussels recently that the dialogue between representatives of the federal state, Serbia and Montenegro, be renewed, and that the subject of the talks be: a) the reorganization of the federation and the consequences of the possible disintegration of the state, and, b) the promotion of cooperation between Serbia and Montenegro.

However, the statement pointed out that "the creating of two independent states and their possible union were not a subject at the recent talks with the EU representative, nor were they even mentioned as a subject of the dialogue, and therefore cannot be a subject at the upcoming talks."

Relations within the federation can be resolved within the dialogue also according to specific areas (economic relations, customs system, infrastructure, defense, implementation of the law, etc.), with respect for the Yugoslav Constitution which provides a legal framework for regulating all these issues.

PODGORICA, Dec 8 (Tanjug) - Yugoslav Prime Minister Dragisa Pesic said late Friday that the redefinition of the federation was the only possible topic at the renewed dialogue between Montenegro and Serbia. "A union of independent states cannot be discussed in the continuation of the dialogue between Podgorica and Belgrade, which will, I believe, begin very soon, but the reorganization of the federation," Pesic was adamant in a live broadcast by Podgorica-based Elmag TV.

Pesic said the presence of representatives of the international community at these talks was "very important" and that it would help toward "some agreement."

Should there be no results on the proposed subjects for the dialogue, then "there can be talks on the results of the referendum in Montenegro which can provide two options - an independent Montenegro or a common state," he said.

Pesic said he hoped the majority would opt for a community with Serbia at the possible referendum in Montenegro.

BELGRADE, Dec 8 (Tanjug) - Yugoslav Deputy Premier Miroljub Labus said on Friday that the delegations of Serbia and Montenegro at the upcoming talks on the future of the Yugoslav federation should consider the consequences for the citizens of the possible disintegration of the common state.

These consequences would cover the problem of real estate status, respect of human rights, and the issue of succession, Labus told a G17 Institute meeting on Yugoslav reforms.

"I think, and so does everyone in Europe, that a referendum is not the solution, but that a minimal common state should be discussed," Labus said.

BELGRADE, Dec 8 (Tanjug) - Yugoslav parliament Chamber of Citizens President Dragoljub Micunovic said on Saturday that the priority of Yugoslavia's foreign policy is to establish relations with its neighbours, in particular countries which used to be part of the former Yugoslav federation.

"All countries of the former Yugoslavia aspire to be integrated into Europe and we have a unique foreign policy," Micunovic said, addressing participants in a conference on Yugoslavia and its neighbours which is under way in Belgrade through the organization of the Freidrich Ebert Foundation and the Ljuba Davidovic Fund for Promoting Democracy.

Regional countries are aware that there must be joint action, and the fact that they had the same structure and market is an advantage for cooperation between the countries of the former Yugoslavia, Micunovic said.

Friedrich Ebert Foundation Coordinator for Yugoslavia Michael Weichert said the activities so far of the Yugoslav and Serbian governments have been successful and that inter-governmental cooperation is the foundation of all forms of cooperation. However, he said that international relations were too important to be left up to the governments alone, but must develop in all segments of society.

ZAGREB, Dec 8 (Tanjug) - Delegations of Yugoslavia and Croatia held a meeting in Zagreb on Saturday, which opened negotiations for concluding an agreement on free trade between the two countries.

Assistant Yugoslav Foreign Trade Minister Dejan Jovovic said in a statement for Tanjug that the talks had been constructive and that they had come to an understanding that the agreement should be concluded as soon as possible.

Jovovic announced the second round of talks would be held in Belgrade in January next year. The free trade agreement would stimulate more sophisticated and better balanced trade between the two countries, since there is currently a deficit on Yugoslavia's side, he said.

He said countries of the Balkan Stability Pact should conclude mutual agreements on free trade by the end of 2002, creating a "respectable zone of 55 million inhabitants."

SARAJEVO, Dec 8 (Tanjug) - Inter-state commissions of Bosnia-Herzegovina and Yugoslavia held a meeting in the town of Mostar in the Federation of Bosnia-Herzegovina on Friday and precisely determined 47 percent of the common border, Bosnia-Herzegovina delegation head Zeljko Obradovic said.

The remaining part of the border should be determined by mid-2002, he said.

The commissions concluded that there was an urgent need to sign an agreement on border and local border crossings between the two states.

BELGRADE, Dec 7 (Tanjug) - Yugoslav National (central) Bank (NBJ) governor Mladjan Dinkic said that in its endeavors for reforming the banking system, the central bank is facing the problem of the absence of the rule of law, reflected in the existence of parallel banking.

At a meeting on reforms in Yugoslavia organized by the G17 Institute, Dinkic said that in addition to 54 licensed banks, there are 45 more, which he described as "vampire banks".

Another obstacle to accelerating reforms is the top-heavy state administration, in which coexist experts employed in the nineties according to political considerations and those chosen by the new political coalition DOS (ruling Democratic Opposition of Serbia), Dinkic said.

In order to accelerate economic, institutional and legal reforms, it is necessary to establish the rule of law and political stability within DOS, reduce state administration, and resolve the relations between Serbia and Montenegro, the status of Kosovo and cooperation with the UN War Crimes Tribunal, the participants underlined.

BELGRADE, Dec 7 (Tanjug) - The World Bank on Friday approved a 70-million-dollar loan for the structural adaptation of Yugoslavia's economy, which will be used for public finances in Serbia, as well as the power industry, the labour market, and the pension and health systems in Yugoslavia.

Yugoslav Deputy Premier Miroljub Labus told reporters this was the first instalment of a 200-million-dollar loan from the World Bank with a 20-year repayment period, a grace period of 10 years, and an annual interest rate of 0.75 percent, which will go directly into the Yugoslav budget.

The loan will be equally distributed between Serbia and Montenegro, Labus said.

World Bank Yugoslavia Office chief Rory O'Sullivan announced the loan would be increased in the next fiscal year to 250 million dollars. Among other things, it will be used directly to finance the development of small and medium-sized companies and new jobs.

World Bank negotiating team head Ardo Hansen explained that the loan to Yugoslavia was aimed at helping the reform processes, filling social funds, and creating a stable environment for foreign investments.

BELGRADE, Dec 7 (Tanjug) - The Swiss government and the OSCE Mission in Belgrade will help the Serbian government draw up a bill on environment protection and create a relevant ministry, in line with an agreement signed Friday at the OSCE office in Belgrade.

The Swiss government has earmarked 200,000 euros for expert aid to legislation, development of institutions and a media campaign for environment protection.

The agreement was signed in the presence of Serbian Administrator for environment protection Andjelka Mihajlov by the OSCE Mission chief Stefano Sannino, the Swiss Ambassador to Belgrade Gaudenz Ruf and the Coordinator of the Swiss Agency for Development and Cooperation Pius Rohner.

BELGRADE, Dec 7 (Tanjug) - Yugoslav Deputy Premier Miroljub Labus said on Friday that the ruling Democratic Opposition of Serbia (DOS) should forge a new coalition agreement for at least one year, in the interest of the people to whom it promised comprehensive reforms in its election program last autumn.

"They should agree on a new minimum of common interests in DOS for at least one year," Labus told a meeting on reforms held at the G17 Institute.

He warned that the current situation was bad for negotiations and future relations between Serbia and Montenegro.

Any further conflicts within DOS will jeopardize political stability which is so necessary for the inflow of foreign capital into Yugoslavia, now when the international community has given it a three-year chance to implement structural reforms in the economy, said Labus, referring to the write-off of two-thirds of Yugolavia's foreign debts to the Paris Club of creditor countries.

"I believe there is room to redefine relations within DOS," he said, acknowledging there was evidently great mistrust among its members within this coalition. Labus said he was confident that "DOS will make a rational decision at the last minute and continue the reforms."

BELGRADE, Dec 8 (Tanjug) - Yugoslav President Vojislav Kostunica told MPs of the coalition return on Saturday that their main objective in the future Kosovo parliament should be to secure the return of displaced and expelled Serbs to the province and its return to Serbia and Yugoslavia.

In talks with Serb MPs and Coordinating Center for Kosovo and Metohija President Nebojsa Covic, Kostunica stressed that the coalition MPs were now in a position to fight for the full realization of the interests and rights of Serbs and other non-Albanians, both those who remained in Kosovo in spite of pressures and those who were expelled from the province, said a statement released by Kostunica's office.

That is why all divisions among the Serb population must be overcome, including this latest to those who voted and those who did not vote in the recent Kosovo elections, Kostunica said.

The main objective of all political activities of Serbs in Kosovo and Metohija should be the return of displaced persons, the elimination of the consequences of ethnic cleansing, the establishment of peace and stability in the province and its return to Serbia and Yugoslavia, the statement said.

Serb MPs pointed out the importance of permanent communication with state organs, especially President Kostunica, which would facilitate their work in Kosovo parliament and the daily political activities in the province, the statement said.

BELGRADE, Dec 8 (Tanjug) - Kosovo parliament MPs of the Serb coalition Return and Serbian Prime Minister Zoran Djindjic held a meeting in Belgrade on Saturday and agreed on the common strategy and a coordinated approach by representatives of Serbian state organs and the Serbian people in Kosovo and Metohija.

In a statement to reporters after the talks, which were attended by Serbian Deputy Premier and Coordinating Center for Kosovo and Metohija President Nebojsa Covic, Djindjic said it was very important to act in a coordinated manner in the institutions of Kosovo and Metohija.

"The objective of this strategy is to strengthen the positions of our people in the province," Djindjic said, underscoring that "Serb MPs who will have an influence in the institutions of Kosovo and Metohija must represent its political safety."

The first step in that safety must be the return of expelled persons to Kosovo, Djindjic said, and added that, once the state's position is strengthened, it will be able to discuss the future status of this province in Serbia, with certain self-administration and, perhaps, new institutions of autonomy.

The government pledged to determine what has been neglected in the past two years in the maintenance of major systems which are vital for the normal life not only of Serbs, but all citizens of Kosovo and Metohija.

BELGRADE, Dec 7 (Tanjug) - President of the Coordinating Center for Kosovo Nebojsa Covic said Friday that the Serb community in the province should not take part in incomplete institutions before regulations are established in line with the joint document signed by Serbia and Yugoslavia with UNMIK chief Hans Haekkerup.

Covic said he has conveyed this view of the Serbian and Yugoslav governments to NATO during his recent visit, adding that the UNMIK administration has started urging the Serb community to take part in health and educational institutions and to seek employment in the power industry.

The Serb community is ready to take part in Kosovo institutions, but only under specific regulations, Covic told a press conference, warning that the Serbian and Yugoslav governments would not endorse any individual disrespect of that stance, which would bring disunity among Serb ranks.

Noting that he would confer with Haekkerup on Dec 13, Covic expressed hope that Haekkerup would be much more active in the future, as the present situation in Kosovo is such that no time should be wasted any more.

KOSOVSKA MITROVICA, Dec 7 (Tanjug) - At the Cultural Centre in the Kosovo-Metohija town of Kosovska Mitrovica, late on Thursday KFOR opened its press centre, which will be opened both for Kosovo Serbs' and ethnic Albanians' press.

The centre is equipped with telephone lines, satellite telephones, computers...

Brigade North commander-in-chief has said that the centre was opened in cooperation with UNMIK, and pointed out that one of the reasons why the centre was opened, was to try to make Kosovska Mitrovica become a united town.

KOSOVSKA MITROVICA, Dec 7 (Tanjug) - KFOR police forces early on Friday got into conflict with a group of Kosovo Serbs from the town of Kosovska Mitrovica, after KFOR and UNMIK police forces had blocked at 4 a.m. local time, a part of the town around a local hospital and streets which led to the Ibar river bridge, and had searched two Kosovo Serbs' houses.

KFOR police forces had blocked the town with jeeps, trucks, and bullet-proof vehicles, but had found no weapons in the Ilacics and Desanovics houses.

Around 4.20 a.m., first sirens went off, and about 150 citizens gathered around the hospital in order to prevent KFOR and UNMIK police forces from entering into the hospital premises, and then stood around the houses which had been searched.

Around 5 a.m., embittered inhabitants began throwing stones at the police, and damaged several vehicles.

While running toward their trucks, the French police threw a shock bomb, and drove across the bridge, Tanjug learned from reliable sources.

No casualties were reported.

Two hours later, the citizens, who were slowly leaving the place of the incident, damaged a few more UNMIK vehicles.

Since early morning hours, French soldiers have been passing leaflets in poor Serbian language, which explain that the early Friday search was performed in the houses which belonged to "three extremists, who were identified in the settlement of Brdo on December 4, where UNMIK and KFOR tried to bring ethnic Albanians, who wanted to visit their houses."

The leaflet says that KFOR will continue with similar actions.

PRISTINA, Dec 8 (Tanjug) - An ICRC official said in Pristina late Friday that Serbian authorities released former Kosovo Albanian student leader Albin Kurti, arrested during the 1999 NATO air strikes on Yugoslavia and sentenced to 15 years in prison for terrorism during the former regime of Slobodan Milosevic. International Committee of the Red Cross (ICRC) spokesperson Vjosa Osmani said Kurti was released from prison in Pozarevac, a town located about 100 km southeast of Belgrade.

Kurti told reporters on his arrival in Pristina that the worst had happened, since he was the only one to have been released. He said his friends were still in prison in Serbia proper. Kurti said he had never asked for amnesty or pardon.

The French news agency AFP described Kurti as the most important Kosovo Albanian political prisoner. The agency said no official statement had been issued in Belgrade so far.