REPUBLIKA SRBIJA MINISTARSTVO SPOLJNIH POSLOVA GENERALNA DIREKCIJA ZA INFORMISANJE I KULTURU Direkcija za informisanje BROJ: 2/114 26. Mart 2009. F A X

V R L O H I T N O

SVIM DKP REPUBLIKE SRBIJE REPUBLIC OF SERBIA MINISTRY FOR FOREIGN AFFAIRS

DAILY SURVEY

Belgrade, 26. 03. 2009.

CONTENT:

SERBIA – ECONOMY - FINANCE

- DINKIC: AGREEMENT REACHED WITH IMF - SERBIA FINISHES TALKS WITH IMF - DJELIC: EU FINANCIAL SUPPORT TO SERBIAN BUDGET - CONTRACT ON EBRD CREDIT FOR PROMOTING ENERGY EFFICIENCY - SRBIJAGAS AND GAZPROM TO SET UP JOINT COMPANY IN APRIL

SERBIA

- DINKIC: LAW ON VOJVODINA AUTONOMY DRAFTED - ITALIAN MINISTER PLEDGES ASSISTANCE TO SERBIA - VUKCEVIC: SERBIA HOSTAGE OF MLADIC AND HADZIC - IRISH FOREIGN MINISTER:DUBLIN DOES NOT STAND IN SERBIA'S WAY - FIRST TRAINING CENTER OF CISCO INSTITUTE OPENS IN SERBIA

SERBIA – BOSNIA AND HERZEGOVINA

- SUTANOVAC MEETS WITH BOSNIAN DEFENSE MINISTER - SUTANOVAC VISITS SARAJEVO - SERBIA - BIH COOPERATION IMPORTANT FOR PEACE IN BALKANS - SERBIA, BOSNIA FOSTERING MILITARY COOPERATION – MINISTER - BIH PRESIDENCY APPROVES AGREEMENT ON COOPERATION WITH SERBIA

KOSOVO AND METOHIJA – STITUATION, REACTIONS

- LONG TERM SOLUTION NEEDED FOR POWER SUPPLY TO KOSOVO - RUSSIA ENDS PARTICIPATION IN KOSOVO PEACEKEEPING MISSION - SEJDIU, THACI ON REDUCTION OF NATO FORCES IN KOSOVO - GALLACH: REDUCTION OF KFOR TROOPS WILL NOT AFFECT EULEX - NATO COMMANDER VISITS PRISTINA - NEW CZECH GOVERNMENT COULD WITHDRAW RECOGNITION OF KOSOVO

2 SERBIA – ECONOMY - FINANCE

DINKIC: AGREEMENT REACHED WITH IMF NOVI SAD, Mar 25 (Tanjug) - Serbian Deputy Prime Minister and Minister of Economy Mladjan Dinkic said Wednesday that agreement has been reached with the International Monetary Fund on a three billion euro loan for the next two years, 2.2 billion of which for 2009. The agreement is expected to be made public Thursday by the IMF and the Serbian government he said, adding that IMF has also promised support for rescheduling the private sector debt. The agreement will help Serbia cope with the economic and financial crisis and encourage foreign investors, Dinkic said.

SERBIA FINISHES TALKS WITH IMF BELGRADE, March 25 (Beta) - Representatives of the International Monetary Fund (IMF) on March 25 wrapped up negotiations with the Serbian government on a new credit arrangement. According to government sources, the agreement is expected to provide a EUR3 billion loan over the next two years for replenishing the foreign currency reserves. The results of the discussions will be announced at the government's March 26 news conference. Serbia's new standby arrangement with the IMF will replace the current precautionary credit arrangement, which was approved in January this year and provided EUR402.5 million in loans. In order to be gain access to money from the new credit arrangement, the government will have to meet certain conditions, including a reduction in public spending and changes to tax regulations, in order to reduce budget expenditure and increase revenue. State pensions and salaries are unlikely to increase for at least a year and a half, irrespective of inflation. In agreement with the IMF, the government will prepare a budget rebalance in April this year envisioning a larger budget deficit. The IMF believes that Serbia will also be in recession in 2009, experiencing a GDP drop of about two percent. However, the cabinet does agree with this conclusion. It is estimated that in 2009 the state will require an extra EUR1.5 billion to settle all obligations to local institutions and companies, as well as foreign creditors. This deficit will be covered by loans from international financial institutions, by commercial banks, and EU aid.

DJELIC: EU FINANCIAL SUPPORT TO SERBIAN BUDGET BRUSSELS, March 25 (Beta) - The European Union has decided to designate funds from the IPA program for preparing Balkan countries for EU membership, as well as from the Union's funds for macrofinancial aid, for financially help the Serbian budget. Serbian Deputy Prime Minister Bozidar Djelic said this in Brussels on March 25, explaining that he was told this by the European financial commissioner, Joaquin Almunia. Djelic explained that, as for the funds from the IPA program, an agreement was made in the EU for Serbia to be enabled for the first time and temporarily, to receive budget support from European funds. Part of the IPA preaccession program has been modified for this purpose, just like an agreement has been reached for the Serbian government to be given macrofinancial aid. The exact total sum for covering the envisaged deficit in the Serbian budget, a result of the global economic crisis, will be set at a later date. It was announced that a mission of the European Commission's General Directorate for the Economy and Finance will visit Belgrade in April, to set the amount and the details of the framework of this support, with representatives of the Serbian government. Earlier, the European enlargement commissioner, Olli Rehn, and Serbian officials, stated that EU120 million could be approved from the IPA program, while a significantly larger sum has been mentioned regarding the EU's macrofinancial aid to the Serbian government.

CONTRACT ON EBRD CREDIT FOR PROMOTING ENERGY EFFICIENCY BELGRADE, March 25 (Tanjug) - The Europen Bank for Reconstruction and Development (EBRD) and Banca Intesa signed a contract on Wednesday on the use of the first EBRD credit line in Serbia which will finance the realization of projects for the promotion of energy efficiency and the use of renewable energy sources.

3 In the presence of European Commission Serbia Delegation Chief Josep Lloveras and Serbian Energy Minister Petar Skundric, the contract was signed by EBRD Director for Serbia Hildegard Gacek and Banca Intesa Beograd Executive Board President Draginja Djuric. During the ceremony, Gacek pointed out that energy is the key sector for future investments in Serbia and the western Balkans, and underscored that the credit line covers 60 million euros which are intended, in addition to Serbia, also for Bosnia-Herzegovina, Montenegro, and Macedonia. She said that 10 million euros will go to small and medium- sized enterprises in Serbia that are interested in the realization of projects for the promotion of energy efficiency and renewable sources of energy.

SRBIJAGAS AND GAZPROM TO SET UP JOINT COMPANY IN APRIL BELGRADE, March 26 (Tanjug) - Gas manufacturers Srbijagas and Gazprom will set up a joint company in April, which will be seated in Switzerland and which will be in charge of the realisation of the part of the South Stream stretch running through Serbia. Srbijagas Director Dusan Bajatovic has said that the Russian-Serbian company will be seated in Switzerland because Serbia is not in the position to manage the assets, licence or any other rights of that firm. He added that "we still have to resolve the way in which decisions will be made in the joint company, which will have to protect all of our interests equally, since the ratio is 51 to 49 percent," with Serbia having the lower percentage. "We do not want to be someone who will be financing the 49 percent and who will not be authorized for anything, and this is where we have to be very careful," Bajatovic said in an interview with the Serbian Radio Television (RTS). One more thing which we also have to do is to define the quantities of gas that are required for the Serbian market, the effective cost of the project, repayment of the loan, he added.

SERBIA

DINKIC: LAW ON VOJVODINA AUTONOMY DRAFTED NOVI SAD, March 26 (Tanjug) - Deputy prime minister, minister of economy and regional development and G17 Plus leader, Mladjan Dinkic, confirmed in Novi Sad on Wednesday that a draft law on transfer of jurisdictions onto Vojvodina had been made and that it had already been presented to the province's administration for consideration. According to him, the work on that legal document lasted somewhat longer than official Novi Sad had expected, because the government, faced with the problem of the global economic crisis, had had some other priorities. Dinkic assessed that the law on transfer of jurisdictions and Vojvodina statute would be adopted by the Serbian parliament in April, after the body had adopted the budget rebalance and its accompanying laws. "Once the law comes into effect, Serbia will be divided into seven regions. The only administrative region will be Vojvodina, while all the other parts, excluding Belgrade as a special whole, will represent statistic regions," the minister noted.

ITALIAN MINISTER PLEDGES ASSISTANCE TO SERBIA BELGRADE, March 25 (Beta) - Finance Minister Snezana Malovic met in Palermo on March 25 with her Italian counterpart Angelino Alfano, who promised Italy's full assistance to Serbia in its efforts to reform the judiciary, curb organized crime and secure visa facilitation. "Alfano said that Italy will support both legislatively and politically Serbia's striving to curb organized crime and carry out complex judiciary reform," Malovic told BETA in a telephone statement. A special topic that Malovic discussed with Alfano and later with the chief prosecutor of the AntiMafia Bureau, Pietro Grasso, was the implementation of Serbia's law on the seizure of criminal assets, something that Italy has a great deal of experience with. "When the Italian justice minister says that he supports Serbia and me as a minister, then I believe that our visit has fulfilled its purpose in the best possible way," Malovic added. Malovic further said she informed Alfano that Serbia is seeking to finalize its cooperation with the Hague tribunal and asked him for assistance in overcoming all problems that may arise concerning visa facilitation.

4 VUKCEVIC: SERBIA HOSTAGE OF MLADIC AND HADZIC BUCHAREST, March 26 (Tanjug) - Serbian War Crime Prosecutor Vladimir Vukcevic has stated that Serbia is kept hostage by The Hague indictees Ratko Mladic and Goran Hadzic, who are on the run. At the World Summit of Prosecutors in Bucharest, Vukcevic said that facing the past is a necessary prerequisite for the building of a modern state, International Radio Serbia has reported. Speaking of the necessity for cooperation in the territory of former Yugoslavia, Vukcevic has pointed to the need for all peoples in the region to resolve their past issues, i.e. to deal with the war crimes committed by members of their own nationality, on the account of so-called patriotism. Long-term stability, strengthening of the rule of law and constructive relations among the countries are impossible if the war crime perpetrators remain unpunished, stressed Vukcevic. The gathering in Bucharest is attended by 300 delegates from 114 countries and 16 international organisations.

IRISH FOREIGN MINISTER:DUBLIN DOES NOT STAND IN SERBIA'S WAY BELGRADE, March 26 (Tanjug) - Irish Foreign Minister Micheal Martin claims that the process of European integration of Serbia and the West Balkans does not depend on the adoption of the Lisbon Agreement, but rather on each specific candidate country, as well as that the ratification of that document and the further enlargement of the European Union are two separate issues. I call on the Serbian government to continue with its efforts to finalize the country's cooperation with the ICTY, and I hope that the Stabilisation and Association Agreement (SAA) will be ratified as soon as possible, the foreign minister of the Republic of Ireland said in an interview for the Belgrade daily Vecernje Novosti, published on Thursday. Asked whether the Balkans was part of the collateral damage caused by Ireland's refusing to ratify the Lisbon Agreement, without which the EU had no administrative capacity for further expansion, Foreign Minister Martin said that that was not the case. Allow me to confirm categorically the results of the government's referendum survey, according to which the issue of EU enlargement did not represent such a big problem for Irish voters, he said.

FIRST TRAINING CENTER OF CISCO INSTITUTE OPENS IN SERBIA NOVI SAD, March 25 (Tanjug) - United States (US) Ambassador in Belgrade Cameron Munter and Novi Sad Faculty of Technical Sciences Dean Ilija Cosic opened a Training Center of the CISCO Entrepreneur Institute on Wednesday, the first and only institute of its kind in Serbia and southeastern Europe. The ceremony was attended by Serbian Minister of Telecommunications and Information Society Jasna Matic and Vojvodina Executive Council President Bojan Pajtic. Ambassador Munter expressed satisfaction that the USA can be a partner to Serbia in developing entrepreneurship and competitiveness of companies. The difficult times of the economic crisis can be overcome only by stimulating innovativeness in entrepreneurship, in private business, and by acquiring new knowledge, Munter said, underscoring that, in that sense, the Cisco Institute is the right move at the right time. Minister Matic underscored that it is very significant that the opening of the Institute was realized in partnership between the Novi Sad University, the CISCO company, republican and provincial organs, and the USA.

SERBIA – BOSNIA AND HERZEGOVINA

SUTANOVAC MEETS WITH BOSNIAN DEFENSE MINISTER SARAJEVO, March 25 (Beta) - Defense Minister Dragan Sutanovac said on March 26, in Sarajevo, that good relations between the defense ministries of Serbia and Bosnia and Herzegovina should be the foundation of good relations between the two countries. He told a news conference that he and his Bosnian counterpart Selmo Cikotic discussed the possibility of cooperation in the military industry, education, and participation in peacekeeping missions, while the Federation of Bosnia and Herzegovina was offered access to the services of the Military Medical Academy under the same conditions as citizens of Republika Srpska. Cikotic said the Serbian side expressed an interest in buying a certain number of airplanes, tanks, combat vehicles and artillery, and that there is a readiness to complete the deal to benefit of both sides, but that the Presidency of Bosnia first has to approve a list of surplus arms.

5 The two ministers stressed that all business surrounding the possible purchase of surplus Bosnian military equipment will be transparent and in accordance with the law, in order to avoid the negative comments that such deals usually bring. Asked about the arrest of Ratko Mladic, Sutanovac said all military and civilian security services are involved in locating him, but stressed that being able to talk about a time frame for Mladic's arrest would mean that his whereabouts are in fact known. Sutanovac and Cikotic agreed that the two countries shared a difficult and unpleasant past, which should not be forgotten, but that it should not be an obstacle to future mutually beneficial cooperation.

SUTANOVAC VISITS SARAJEVO SARAJEVO, March 25 (Tanjug) - Defense ministers Dragan Sutanovac of Serbia and Selmo Cikotic of Bosnia-Herzegovina agreed in Sarajevo on Wednesday that there are several possibilities for expanding cooperation between their two ministries which would be to their mutual interest. Addressing a joint news conference, Sutanovac said good cooperation between the two defense ministries should be the backbone of the civilian relations of the two states. Sutanovac said he had discussed with Cikotic possibilities for cooperation in the area of the military industries, participation in peacekeeping operations, and education. Sutanovac said he had offered his counterpart from Bosnia-Herzegovina also the possibility that citizens of the Federation of Bosnia and Herzegovina use the services of the Military Medical Academy (VMA) under the same conditions as the population of Republika Srpska (RS). Addressing reporters, Cikotic pointed out that it was also possible to establish cooperation within regional and multilateral projects, as well as in the area of peacekeeping operations, and also joint exercises. The two ministers agreed that, in spite of the past that the two states share, they should persevere in building up preconditions for a better and more prosperous future.

SERBIA - BIH COOPERATION IMPORTANT FOR PEACE IN BALKANS BANJA LUKA, March 25 (Tanjug) - Bosnia and Herzegovina (BiH) Presidency Chairman Nebojsa Radmanovic and Serbian Defence Minister Dragan Sutanovac agreed in Sarajevo on Wednesday that good cooperation between neighboring countries in all areas, including the army, is very important, because that is the only way that the Balkans can become a peaceful territory, and its countries members of the EU. Radmanovic and Sutanovac discussed the possibility for BiH Armed Forces officers to attend military schools in Serbia, the ways to handle the excess of weapons and military equipment and the possibility of BiH using the capacities of the Military Medical Academy (VMA) in Belgrade, the BiH Presidency said in a statement. Sutanovac, who is on a two-day visit to BiH, said that cooperation with BiH Defense Ministry is very correct and that it can further develop in the future, the statement says.

SERBIA, BOSNIA FOSTERING MILITARY COOPERATION – MINISTER SARAJEVO/BELGRADE, Mar 25 (Tanjug) - Serbian Defense Minister Dragan Sutanovac said Wednesday that his current visit to Bosnia-Herzegovina was a step forward in bilateral military cooperation. Cooperation can be fostered in defense, protection of civilians and medical care sectors, he told Tanjug by telephone. The talks also focused on education and training of Serbian Army officers in the Peace Operations Center in the vicinity of Sarajevo and on trade in surplus arms and military equipment, he said. Cooperation in the military industry and within the regional and multilateral projects was also discussed, he said. The first day of his two-day visit, Sutanovac conferred in Sarajevo with Bosnian Defense Minister Selmo Cikotic, President of Bosnia-Herzegovina Presidency Nebojsa Radmanovic and President of Council of Ministers Nikola Spiric on bilateral military cooperation and the situation in the region. He will then proceed to Banja Luka to confer with Republic of Srpska President Rajko Kuzmanovic, parliament Speaker Igor Radojcic and Prime Minister Milorad Dodik.

BIH PRESIDENCY APPROVES AGREEMENT ON COOPERATION WITH SERBIA SARAJEVO, March 26 (Tanjug) - The Bosnia-Herzegovina Presidency held an emergency session in Sarajevo on Wednesday, at which it approved the Agreement on

6 Economic Cooperation between the Ministerial Councils of BiH and the government of the Republic of Serbia. The Presidency authorized BiH Minister of Foreign Trade and Economic Relations Mladen Zirojevic to sign the document.

KOSOVO AND METOHIJA – STITUATION, REACTIONS

LONG TERM SOLUTION NEEDED FOR POWER SUPPLY TO KOSOVO KOSOVSKA MITROVICA, Mar 25 (Tanjug) - State Secretary in the Serbian Ministry for Kosovo-Metohija Oliver Ivanovic said Wednesday that a long-term and sustainable solution can be found for the problem of power supply to the Kosovo Serbs. The most efficient solution would be to give a license to the public enterprise "Electro Kosmet", a branch of the Serbian Power Corporation that functions in the north of the province, to take over the job of maintaining the low-voltage network and charging for the electric energy in all Serb communities in Kosovo. He pointed to the importance of equal treatment of Serbs in northern Kosovo and in enclaves, adding that the Serbian government is to discuss Thursday the power supply to Serb communities in Kosovo. the Serbian Government has offered on several occasions humanitarian aid in the form of energy in order to compensate for a part of the unpaid bills of the Kosovo Serbs, he said. As regards the ban on entry to Serbian officials intending to visit Kosovo, Ivanovic said it is will not calm the situation but lead to unnecessary high political tensions which might escalate at some time, he said. The Kosovo Albanian leaders must realize that this move could provoke large-scale protests which noone needs, he emphasized. The international community should act directly in this regard through UNMIK, EULEX and other international offices in Pristina, he said.

RUSSIA ENDS PARTICIPATION IN KOSOVO PEACEKEEPING MISSION PRISTINA, March 26 (Beta) - Russia has withdrawn its personnel from the U.N. peacekeeping mission in Kosovo, Leonid Pogorelov, commander of the Russian police contingent in UNMIK said on March 26. He said that, early this week, the last Russian peacekeeper left Kosovo. The Russian forces withdrew in two stages the first group left on Jan. 28 and the second on Feb. 23, Pogorelov told a news conference in Moscow. Russian police officers arrived in Kosovo nine years ago and, according to Pogorelov, engaged in a series of police tasks, from patrols and guard duty to arresting criminals. They also trained local police officers, he said. Pogorelov added that other foreign representatives gave the Russian officers a high rating and that many local police wanted to work with their Russian counterparts in Kosovo.

SEJDIU, THACI ON REDUCTION OF NATO FORCES IN KOSOVO PRISTINA, March 26 (Beta) - The heads of Kosovan institutions said on March 26 that NATO will be present in Kosovo as required by conditions in the field. Kosovo President Fatmir Sejdiu said there is no "direct information" on the withdrawal of KFOR troops by some NATO member countries that have troops in Kosovo. Commenting on the possibility of reducing the number of NATO troops in Kosovo, Sejdiu said Kosovo is cooperating closely with NATO, adding that in the case of some countries, the reasons for withdrawal may be internal and have nothing to do with Kosovo. "For us, it is important that Kosovo develop in the right direction and that it has peace and stability," he went on to say. Kosovo Premier Hashim Thaci said NATO, the EU and U.S. officials have said that the presence of NATO in Kosovo will continue as dictated by circumstances. Thaci stated that Kosovo has established its own security and defense institutions and will function as a normal state. He added that, after the war, around 50,000 soldiers arrived to Kosovo, which is now an independent and sovereign state that has achieved peace and stability and is en route to EU and NATO membership.

GALLACH: REDUCTION OF KFOR TROOPS WILL NOT AFFECT EULEX PRISTINA, March 25 (Tanjug) - The reduction of the number of KFOR soldiers will in no way affect EULEX or the cooperation between the two missions in Kosovo, Spokesperson

7 of the EU High Representative for the Common Foreign and Security Policy Christina Gallach has stated. In an interview for Tirana television Top Channel, Gallach said that she is convinced that field cooperation between EULEX and KFOR will continue in the best possible way and that the EU mission will fulfill their obligations in the whole of Kosovo territory. I can freely say that any type of reduction of KFOR troops in Kosovo will have no effect on EULEX. The EU mission cooperates well with KFOR, and although they have different functions, they are in constant intensive coordination, Gallach underscored. Some NATO members, among which are Latvia, Spain, Germany and Austria, have announced a withdrawal or reductions in the number of their soldiers in KFOR structure in Kosovo.

NATO COMMANDER VISITS PRISTINA PRISTINA, March 26 (Beta) - Mark Fitzgerald, commander of NATO forces in Naples, on March 26 visited Pristina and met with the heads of Kosovo security forces. The Ministry of Kosovo Security Forces announced that the U.S. admiral, accompanied by KFOR Commander Giuseppe Emilio Gay, spoke with Kosovo Security Forces Minister Fehmi Mujota and forces commander Sulejman Sellimi. The main topic of the talks was the forming and training of the Kosovo Security Forces. Adm. Fitzgerald confirmed NATO's support to the forming of the Kosovo Security Forces. Specific steps of support were discussed during the meeting, a press release said.

NEW CZECH GOVERNMENT COULD WITHDRAW RECOGNITION OF KOSOVO VIENNA, March 26 (Tanjug) - Vice President of the Czech parliament Voitech Filip has stated that, after voting down the Czech minority government, the possibility arises of reexamining Prague's decision to recognize Kosovo's unilateral proclamation of independence. The now deposed Czech government had acknowledged Kosovo's independence despite the opposing viewpoints of the majority of parliamentary groups and the Czech's President, which is why there is a possibility of reexamining the disputable decision, the Vice President told a Frankfurt daily paper. Filip said that he will initiate the withdrawal of recognition of Kosovo, which is, according to him, legally possible because the procedure of its full recognition in Czech has not yet been formally completed. It is common knowledge that Czech President Vaclav Klaus, a great opponent Kosovo's independence, does not wish to sign the credentials and appoint the first Czech ambassador to Pristina, the Frankfurt paper reports.

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