Select Committee on Foreign Affairs Third Report

4 Montenegro

83. The growing economic divergence between Serbia and Montenegro, and the calls for the dissolution of the state union, will present a serious political challenge over the next two years. The problem presents a series of complex questions, revolving around constitutional reforms and regional stability, but the independence of Montenegro is unlikely to precipitate violence.

State union

84. The unresolved question of the union between Montenegro and Serbia is a major distraction for policy makers in the Balkans. Dr Eyal explained the importance of the state union question in his submission: "The seemingly never ending dispute between [Serbia and Montenegro] has not only precluded a wider political solution in the Balkans as a whole, but has also wasted an opportunity to concentrate on economic reconstruction inside Serbia. Violence between the two entities can be excluded. Nevertheless, a resolution to this problem—in one way or another, even if it involves formal separation—is an urgent necessity in order to break up the current legal logjam."[105] Commenting on the question of Montenegro's independence, Kai Eide told us: "This whole question of Serbia and Montenegro adds to the political burden in the political landscape in Belgrade and complicates the situation further there."[106]

85. The existing system—a loose federation between Serbia and Montenegro—is based on the Belgrade Agreement, which the EU High Representative for Foreign Policy, Javier Solana, brokered in March 2002; his efforts were part of an attempt to postpone the separation of the two states until after the Kosovo final status talks of mid 2005.[107] Under the agreement, Yugoslavia ceased to exist in February 2003, and was replaced by the state union of Serbia and Montenegro, but the discussions leading to the constitutional charter revealed strong differences. The Serbian government wanted a union chamber with elected deputies, while the Montenegrin government wanted to appoint delegates. A compromise which permitted the appointment of delegates for two years before their election rested on Serbia's acceptance of a referendum on independence in Montenegro after the agreement expires in February 2006.[108] Gabriel Partos assessed the effectiveness of the agreement, saying it "has been a success in terms of crisis prevention/postponement. But it has not so far laid the foundations for a stable, long-term union."[109] Neither side has adopted the terms of the agreement with enthusiasm and the FCO wrote in it submission that "progress on implementing the provisions in the Constitutional Charter has been slow."[110] In effect, the agreement amounted to a truce until the referendum takes place.

86. Part of the problem is that the Belgrade Agreement established an unwieldy vehicle; examples of the complexity of the state union include the division of posts in Serbia and Montenegro's diplomatic corps—so a Montenegrin is ambassador in London, and a Serb in Berlin—and the parallel federal and state government structures. However, the biggest obstacle to the effective functioning of the union is growing economic divergence between the two states. The Embassy of Serbia and Montenegro wrote in its submission: "When speaking of the state of the economy in Serbia and Montenegro, we must keep in mind that the economic systems of the two republics…significantly differ. Amongst other things: there are two central banks; two different currencies are in use; the systems of privatisation are different, so are foreign trade, protection and customs and excise systems, as is general taxation."[111]

87. The constitutional structure has also impeded reform efforts as well as Serbia and Montenegro's progress towards a SAA. Recognising the logjam, the EU launched a twin track process in September 2004 which will permit the signature of a single SAA with two separate economic annexes for Montenegro and Serbia.[112] We asked Dr Whyte about the twin-track process, and he told us: "I think the twin-track approach recognised the reality that the attempts to make Serbia and Montenegro integrate with each other before joining the EU simply was not working."[113] Dr Anastasakis added that the twin-track approach "shows a genuine attempt by Chris Patten and the Commission to understand what exactly the problem is…I think maybe they recognise that this kind of (Solana) state was a kind of failure…Showing this kind of flexibility will definitely…end the antagonism in trying to approach the standards of the EU."[114]

88. However, Dr Whyte added that the EU approach could also contribute to the end of the union because "the Montenegrins now plan to make the best go they can of proving their European credentials within the framework of the new proposed feasibility study, and they hope to be in a position to turn around to their own voters and say, 'Look, Serbia is holding us back from our European integration' and that will then be used as an argument for separation."[115]

89. The question of Montenegro's independence remains divisive within both Montenegro and Serbia. In Montenegro the Democratic Party of Socialists and Social Democratic coalition government, led by Milo Djukanovic, fiercely advocates separation from Serbia, while the opposition Socialist People's Party, the Serbian People's Party and the People's Party, with 40% of the seats in parliament, staunchly oppose a break with Belgrade.[116] Gabriel Partos told us: "At present support in Montenegro for independence and the continuation of the SaM union is almost evenly balanced".[117] In this situation, a referendum on independence has the potential to provoke political instability within Montenegro. Gabriel Partos went on to describe the political processes which may lead to independence. He said: "An early indication of [the dissolution of the state union] may come in the elections for the SaM parliament, due in February 2005. A strong showing for Montenegrin Prime Minister Milo Djukanovic's party and its allies could set in motion moves towards Montenegro's independence…Djukanovic may also want to use an independence referendum to rally support at a time when he will have been in power as prime minister or president, without interruption, for 15 years."[118]

90. In Belgrade, we heard that views within the governing coalition differ, but that Serbia would accept the results of a referendum on independence, provided the result was clear and the poll conformed to appropriate standards. The Embassy of Serbia and Montenegro said that "ultimately, the will of the people (as expressed through a referendum) will prevail and should be respected."[119] Details such as the phraseology of the referendum question, however, could be a source of friction between the two governments, as would a move towards independence ahead of the February 2006 timetable.

91. Montenegro's independence could have an impact on the region, given the secessionist impulses in some communities in Macedonia, Bosnia and Herzegovina, and Kosovo. For instance, one fear is that the independence of Montenegro could provide a precedent for the secession of Republika Srbska from Bosnia or encourage the Kosovo Albanians' demands for independence. However, our witnesses played down the potential impact of Montenegro's independence. Dr Eyal told us: "I suspect…that if Montenegrin independence comes, it will have very little impact on Bosnia where the logic of the behaviour of the various ethnic communities is completely different. It will, however, on Kosovo, because it will be very difficult to say we are not settling the legal status of Kosovo, but we are rushing to settle the legal status of Montenegro."[120] Gabriel Partos told us that the impact of independence "will be marginal, minimal."[121]

92. A further question is whether Montenegro has the capacity to function as an effective independent state, given its small size—about 660,000 people—and its problems with organised crime. Misha Glenny told us that Montenegro "is so small that absorbing it actually would not make much difference [for the EU]. It would probably be very easy to do it, although it is still a pretty highly criminalised state."[122] The Italian government has particular concerns about crime in Montenegro. Another concern is the impact that such small states could have on the distribution of voting powers within the EU.

93. We asked the Minister if the United Kingdom would accept Montenegro's independence. He said: "I cannot imagine the British Government…saying that Montenegro cannot have its independence…[but] I do not want to say independence on any terms, declared by any faction which can get a majority vote in a plebiscite. There are a lot of qualifiers to it but there is no one in Britain saying, 'Under all circumstances, under all conceivable scenarios, the only future state we will accept is a merged Serbia Montenegro.'"[123] We welcome this balanced and realistic position.

94. We conclude that independence for Montenegro in 2006 is probable, and that it is unlikely to lead to serious violence or instability. However, we recommend that the Government strive to minimise the risks of conflict. We conclude that the international community, including the United Kingdom, should seek to ensure that the details of the referendum conform to international norms, should play a role in monitoring any referendum in Montenegro to ensure its fairness, and should accept the results of a free and fair poll. We also recommend that the Government work with the local authorities to tackle organised crime and help build administrative capacity in Montenegro, for instance by offering technical support to the government in Podgorica.

The United Kingdom's representation

95. Another issue we examined was the question of UK representation in Podgorica. In their 2001 Report, our predecessors assessed the necessity of UK representation and concluded that "the need for the FCO to have a permanent post in Montenegro is urgent."[124] Currently, the United Kingdom has a locally engaged member of staff in Podgorica and the Ambassador in Belgrade travels frequently to Montenegro. We asked the Minister why no British diplomat worked in Podgorica. He told us: "The Committee's report in 2001 said that we should have a permanent post in Montenegro and we have established that, I accept not with an English-born diplomat, but this is a serious question of resources."[125] We recognise that resources are scarce, but consider that the case for a fully-staffed United Kingdom based Post in Podgorica is strong, given the increasing likelihood of the dissolution of the Union of Serbia and Montenegro. Other states, such as the USA, China, Italy, Russia, Greece, Slovenia and Croatia already have consular representation in Podgorica.

96. We conclude that the increasing possibility of Montenegro's independence adds to the case for a Post headed by a United Kingdom-based diplomat in Podgorica.

105   Ev 4 Back

106   Ev 113 Back

107   Ev 64 Back

108   International Crisis Group, A marriage of inconvenience: Montenegro 2003, 16 April 2003, Back

109   Ev 2 Back

110   Ev 64 Back

111   Ev 132 Back

112   "New formula for stalled integration process", Institute for War and Peace Reporting, 17 September 2004 Back

113   Ev 132 Back

114   Ev 48 Back

115   Ibid. Back

116   "Montenegrin rivals both claim EU victory", Institute for War and Peace Reporting, 17 September 2004, Back

117   Ev 2 Back

118   Ev 2 Back

119   Ev 131 Back

120   Ev 7 Back

121   Ibid.  Back

122   Ev 50 Back

123   Ev 84 Back

124   Foreign Affairs Committee, Fourth Report of Session 2000-20001, Government policy towards the Federal Republic of Yugoslavia and the wider region following the fall of Milosevic, HC 246 para 102 Back

125   Ev 84 Back

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Prepared 23 February 2005