International relief at the fall of the regime of Slobodan Miloöević has been marred by dismay at the prospect of a breakaway from the Federal Republic of Yugoslavia (FRY) by Montenegro. As long as Miloöević was in power, the international community supported Montenegroís moves to distance itself from Belgrade. With Miloöević gone, it was widely expected that Belgrade and Podgorica could patched up their relationship, and find a satisfactory accommodation within the framework of the FRY. Montenegrin President Milo Djukanovićís decision to opt instead for independence has caused international consternation.

The FRY has long since ceased to function in any meaningful sense. Over the past three years, Montenegro and Serbia have, for all intents and purposes, come to operate as separate states. This was in large part due to actions by Belgrade that ended meaningful Montenegrin participation in joint, federal institutions. In response, Montenegro took over the functions which notionally belonged in the federal domain. The governing parties in Montenegro have not participated in the federal parliament since 1998, and they boycotted the September 2000 federal elections that brought defeat to Miloöević. The principal pro-Yugoslav party, the Socialist Peopleís Party (SNP), does participate at the federal level, and is a member of the coalition that governs FRY. Montenegroís governing parties do not recognise the legitimacy of the federal authorities for Montenegro, insisting that they represent only Serbia.

The Montenegrin government and FRY President Vojislav Koötunica have presented different proposals to change the relationship between Montenegro and Serbia. In August 1999, the Montenegrin government adopted a ìPlatformî that envisaged a very loose union, in a single state, with limited joint functions in areas such as monetary policy, defence and foreign policy. In December 2000, a revised platform was presented by Djukanovićís Democratic Party of Socialists and its coalition partner, the smaller Social Democratic Party (SDP). This differed from its predecessor in the key respect that it envisaged a union of two independent states, with separate international subjectivity and two UN seats. In response, in January 2001 Koötunica issued a counter-proposal for a functioning federation, with considerable powers devolved to the two republics. Koötunicaís proposal was endorsed by Serbiaís ruling Democratic Opposition of Serbia (DOS).

Initial attempts at negotiation between Belgrade and Podgorica proved fruitless, sticking on the question of a single-state or a two-state solution. However, many of the issues to be addressed in defining a future relationship remain the same, whatever shape that relationship will take. These include the practicalities of putting in place a single market and a currency union, co-ordination over taxation and competition policy, and education and healthcare provision. A more constructive approach would be to discuss how such matters would be dealt with in future. Belgrade and Podgorica should be encouraged to begin negotiations on such areas of common interest as soon as possible, and before any referendum on independence for Montenegro. They should start by defining points of crucial concern to each side. For example, it is important for Montenegro to ensure that all security forces in the republic should be under its control, so it will never again be subject to threats from Belgrade.

The international community has made clear its opposition to Montenegrin independence moves. This opposition has largely been ineffectual, and has not deflected the Montenegrin government. Whether or not Montenegro will become independent will depend on domestic factors, in particular the performance of the pro-independence parties in parliamentary elections scheduled for 22 April 2001.

International opposition has been based on fears that independence would destabilise both Montenegro and the region. Such fears are probably exaggerated. With Miloöević removed, the threat that Belgrade might use force to prevent Montenegroís departure has all but disappeared. Without support from Belgrade, any in Montenegro who might wish to resist Montenegrin independence other than through political means would have little prospect of success. SNP leaders have in general participated constructively on the Montenegrin scene, and deny any intention of opposing independence other than politically.

Fears of wider regional destabilisation also seem exaggerated. While Kosovo Albanian leaders would welcome Montenegrin independence and the ending of the FRY that that would imply, they say there would be no immediate consequences for Kosovo. Kosovo has to establish functioning institutions and prepare for self-government before its final status can be resolved. The question of that status needs to be resolved by the international community irrespective of what Montenegro does. Fears of a possible domino effect, with Montenegrin independence encouraging separatism among the ethnic-Albanian community in Macedonia and among Serbs and Croats in Bosnia are similarly misplaced. As a full republic of former Yugoslavia, Montenegroís position is rather analogous to that of Slovenia and Croatia, with the exception that Montenegroís departure should not be expected to bring serious instability, domestically or regionally.

The key international interest is not served by heading off Montenegrin moves towards independence, but rather by achieving a solution, whatever it may be, that does not undermine stability in the region, and may in the longer term be most likely to enhance it. The international community should adopt a neutral stance as to the final outcome. In the mean time, it should be ready to assist Montenegro and Serbia in working out the details of their future relationship. It should also be ready to appoint a high-level mediator or facilitator to help them reach agreement on their final status, perhaps under the auspices of the OSCE.

Podgorica/Brussels, 28 March 2001