The October 2000 democratic uprising in Serbia gave the world new hope that the horror, chaos and misery that devastated the Balkans - through a decade of four wars, and of murder, atrocity and economic destruction on a massive scale - were finally at an end.

But the problems of security and stability in the region have not suddenly been solved by Slobodan Milosevic’s defeat - or by his incarceration as this report goes to press. Nationalist sentiment remains pervasive; sovereignty issues remain unsettled; tens of thousands of refugees cannot return home; and war criminals remain unpunished. Political and other institutions throughout the region are fragile.  Corruption is endemic,and the evidence  of economic failure is everywhere. Unless these issues are addressed quickly and decisively, the potential for renewed conflict remains  grave.

Serbia’s political transformation has unleashed high expectations, but the peoples of the Balkans and the international community must take a comprehensive and forward-looking approach to the current situation if those expectations are not to remain dangerously unfulfilled. Fundamental institutional change is crucial, and final status issues have to be addressed sooner rather than later.

In this report, the International Crisis Group (ICG) makes many recommendations as to how best to move forward,some of them going well beyond the present cautious international consensus. The test for us in each case has not been what is currently acceptable in the diplomatic  marketplace- though many of our recommendations should be - but what will contribute to lasting peace, bearing always in mind the need to apply consistent principles and to consider the wider consequences of every action. Some of our key recommendations are:

• For Montenegro, that it no longer be actively discouraged from seeking independence, and that the international community focus  more constructively on helping Podgorica and Belgrade to find a  mutually  satisfactory basis for a new    relationship.
   
• For Kosovo, that the reality, legitimacy and permanence of the split from Serbia be acknowledged; that early Kosovo-wide elections be held to establish a democratic leadership;  that  the  final  political  settlement process then be commenced; and that the option of “conditional independence”be   closely   explored.
   
• For Serbia,that the embrace by the international community of the new government be less uncritical, with it being held to  the  same  high  standards demanded of other Balkans countries, notably Croatia,  in particular  on  cooperation  with  the Hague Tribunal.
   
• For Bosnia, that a tough policy be maintained toward all extremist nationalists;that the secession of Republika Srpska not be contemplated;   and that Dayton be vigorously enforced to create the conditions  for  ultimate  acceptance  of  a  more  viable post-Dayton governance structure.
   
• For Macedonia, that the international community assist in every  way necessary to maintain the territorial integrity of the  country,  but  at  the same time treat the basic problem as political rather than military, insisting  on a serious and sustained effort to address the political and cultural concerns  of  ethnic Albanians.

This report is built on the experience of five years of field-based analysis by the ICG. Since our first project commenced in Sarajevo in 1996, we have produced on the Balkans three book-length reports and over 140 other reports and briefing papers. This is the first time we have tried to look at the region as a whole, addressing all the outstanding issues, applying experience learned elsewhere, and identifying wherever possible common policy themes and approaches. It is an approach we have long been urging upon governments themselves, who have too often responded in an ad hoc and piecemeal fashion to problems crying out for a comprehensive approach.

Our endeavour is ambitious: to analyse the sources of possible further conflict and offer practical policy measures - including on the critical and sensitive constitutional issues - to prevent that happening. We have sought to identify roles and responsibilities for both local actors and key players in the international community, including the European Union, United States and Russia.

Our focus in this report is not on the entire area that has historically or geographically  been  described  as  “the  Balkans”  but  on  the  seven  entities where the remaining problems - and potential for conflict - in the Balkans are most concentrated, and where policy makers most need to focus their attention: Serbia, Montenegro, Kosovo (together making up the Federal Republic of Yugoslavia),Bosnia,Macedonia,Croatia and Albania.

Much remains to be done before the Balkans can shed the burden of the region’s own divisions,and before peace and stability once and for all make the threat of violent conflict just an unhappy memory. It is our hope that this report will be seen as a timely and useful guide as to how policy makers can take major and lasting steps in that direction.

Brussels, 2 April 2001