For more than a decade Serbia was the driving force behind much of the instability in the Balkans.  Following the overthrow of Slobodan Milosevic on 5 October 2000, it was hoped that Serbia would promptly reform the external policies of the Federal Republic of Yugoslavia (FRY) that had caused such disruption. To date, these hopes have been substantially disappointed.

Nevertheless, the FRY has set its sights on catching up with its neighbours by integrating into Euro-Atlantic institutions and political processes. In particular, it wants to make significant progress during 2002 towards three major foreign policy goals: accession to the Council of Europe (CoE); membership in NATO’s Partnership for Peace (PfP); and negotiating a Stabilisation and Association Agreement (SAA) with the European Union (EU).

These objectives confirm the FRY’s welcome re-orientation to a pro-European, trans-Atlantic outlook.  Nevertheless, post-Milosevic Yugoslavia still presents significant obstacles to regional stability, openly opposing important policies and standards represented or implemented on the ground by the international community.

Regional instability is exacerbated by the federal authorities’ refusal or inability to cooperate with the International Criminal Tribunal for the former Yugoslavia (ICTY), undermining of international community goals in Bosnia and Kosovo, and reluctance to address Montenegro's concerns about the federation itself. Looming behind these highly visible policies and practices is a fourth, massive problem: the FRY's unreconstructed armed forces, which – lacking civilian control or budgetary oversight – influence foreign and domestic politics, block reforms, and oppose accountability for war crimes.

This report examines all but one of these problems. (Belgrade’s relationship with Montenegro will be considered in a future report.) It assesses their impact on regional stability, and identifies them as the consequences of ideological nationalism, rear-guard resistance by Milosevic-era cadres, and institutional inertia.

These are all factors that Serbian reformers want to overcome but cannot without international support. Premature FRY admission to Euro-Atlantic institutions is more likely to weaken the reform camp than to strengthen it. Such significant endorsement of Belgrade's regional role should be withheld until it has confirmed by deed its commitment to help stabilise the region.

Until then the FRY cannot be viewed as a guarantor of regional peace and stability or a reliable partner in any collective security framework. The international community must hold the FRY to the same high standards for inclusion in intergovernmental structures that have rightly been required of Croatia and Bosnia since 1996. NATO, the CoE, and the EU should raise these problems with their Yugoslav counterparts and require solutions. So, too, the U.S. administration and Congress should face – and act on – the reality that the FRY is not in compliance with the conditions established under the impending 31 March 2002 deadline and there is, therefore, no justification to certify its eligibility for further U.S. donor aid.

To do otherwise would strengthen obstructionist forces inside Serbia, reduce international community leverage over Belgrade, undermine Yugoslavia’s neighbours, and cheapen membership in the international institutions involved.

Belgrade/Brussels, 7 March 2002