Brussels, 23/08/2002 (Agence Europe) - The Centre for European Policy Studies (CEPS) devotes issue 36 of its journal South-East Monitor to the negotiations under way on the creation of the future State of Serbia and of Montenegro. The study observes that despite the impossibility for the EU to intervene directly, "its subtle influence is felt at the negotiating table". See also EUROPE of 23 August, p.2, for more on this subject.
The author of the study had anticipated that the work of the constitutional committee charged with drawing up the charter of the future State of Serbia and Montenegro, in accordance with the agreement signed in March 2002 by the two republics (known as the "Agreement of 14 March" or the "Solana Agreement" - see EUROPE of 15 March), would not be completed on 31 July 2002, as recommended by the EU. In this connection, during his visit to Belgrade on 25 July last, Javier Solana, EU High Representative for the CFSP, asked the two republics to bring the negotiations to a conclusion as swiftly as possible in anticipation of the presidential elections in Serbia on 29 September and the legislative elections in Montenegro on 6 October. The Solana Agreement makes provision for the establishment of a common and stable State, which could negotiate an association and stabilisation agreement with the EU. The negotiations between the two republics will take place according to a plan that is "not available to the public" and that has been developed by Council of Europe independent legal experts, after consultation with EU experts. The author recognises that the plan originally gave rise to a lukewarm reaction, notably by Montenegro, which fears that it "goes further than what the two parties agreed at Belgrade". Highlighting in particular the elements of centralisation and the pre-eminence of the authority of the future State laid down in the plan, the two republics apparently consider that "certain provisions could be interpreted as an increase in the State's powers at the expense of those of the republics". In the economic sphere, customs and trade would be integrated, in the hope of concluding an association and stabilisation agreement with the EU and of eventual membership of the World Trade Organisation (WTO), whereas currencies and budgets would be separate. The author notes that harmonisation limited to trade and customs is "probably not sufficient to create a common State, but constitutes the absolute minimum making the future State eligible for a European Commission feasibility study which, if positive, will initiate the association and stabilisation process with the EU". It will be recalled that the Commission is considering carrying out this study next autumn and has stated on several occasions that it hoped to commence negotiations for a stabilisation and association agreement in 2003. In conclusion, "the EU is influencing the results of the talks (…) by limiting the options from which the parties may choose and by defining the acceptable parameters which the parties must try to attain". The European perspective for the Balkans "is a question of mutual interests" because while it is a fact that these countries "are knocking at the EU door", the Union is very interested in making a success of its common foreign policy in the Balkans.
In parallel with the political negotiations, Serbia and Montenegro are working to harmonise their economic systems and have drawn up an action plan for the effective functioning of the future State's internal market, a plan that is part of the work of the constitutional committee. The plan covers the movement of goods, capital, persons and services and the administrative organisation of the future State. It contains the following provisions:
Free movement of goods: the two republics will abolish within three years the existing customs border, introduce uniform standards for customs procedures, harmonise customs rates on the basis of WTO standards (which will mean gradually decreasing rates in Serbia), appoint a common representative to the World Customs Organisation and a competent authority to manage the process of becoming a signatory to international conventions and treaties, establish a single sanitary and veterinary control body, harmonise external trade systems with WTO standards, abolish trade barriers within the future internal market and harmonise direct and indirect taxation systems;
Free movement of capital: the two republics have agreed to apply the rules in existence on their territory, before harmonising them with EU standards.
Free movement of services: Serbia and Montenegro will maintain their respective monetary and banking systems while placing them in conformity with European standards and engaging in close cooperation with one another. The two republics will set into place a financial council composed of their respective members to represent them in international monetary and financial institutions.
Free movement of persons: the working groups have noted that there are very few differences between the two republics in matters of employment, education and protection of the elderly and the disabled. the two republics will ensure the free movement between different systems for people who benefit from pensions or insurance entitlements by applying the principle of reciprocity. However during the signing of the international treaties in the area of insurance and work and within the International Labour Organisation (ILO), Serbia and Montenegro will be represented separately.
The administrative organisation of the future state of Serbia and Montenegro: all existing federal authorities will have to terminate their activities at the moment when the new authorities decided by the Constitutional Charter are put into place. The future State will consist of five Ministers (Foreign Affairs, Defence, International Economic Relations, Domestic Economic relations, Human and Minority Rights) responsible for organising and harmonising the work of the authorities of the two republics and of representing the future State within international institutions. Ministers will have their seats in both Belgrade and Podgorica.