Serb parties agree coalition

Serbian Prime Minister Vojislav Kostunica and President Boris Tadic yesterday agreed a coalition under pressure from Western leaders seeking to keep hardline nationalists from power.

Mr Kostunica and Mr Tadic's parties had been negotiating since an inconclusive January 21 election overshadowed by a UN plan to give supervised independence to the breakaway Kosovo province.

The West had pushed for a deal, fearing a power vacuum would destabilise the country and boost hardline parties.

"An agreement was reached between the Democratic Party, the Democratic Party of Serbia and G17 Plus on the election of a new democratic... and pro-European government," Mr Tadic said in a statement. The candidate for Prime Minister would be Mr Kostunica.

The talks appeared stalled earlier in the week when Mr Kostunica, a moderate nationalist, backed Radical Party deputy leader Tomislav Nikolic for the key post of Parliament Speaker.

The Democrats accused Mr Kostunica of blackmailing them into a coalition on his terms just days before the May 14 deadline, and said he capitulated to the hardliners, seen by the West as heirs of late nationalist strongman Slobodan Milosevic.

The European Union condemned the election of Mr Nikolic as a return to "darker days" and urged Mr Kostunica and Mr Tadic to rise above their differences for the good of the country. Yesterday, EU president Germany and the United States welcomed any deal.

"We in the EU would be very happy if Serbia would form a government with European and democratic parties," German Chancellor Angela Merkel said at a regional meeting in Zagreb.

"The US welcomes a new Serbian government which does not include the Radical Party," US Undersecretary of State Nicholas Burns said at the same meeting.

Mr Tadic said the coalition partners had agreed to replace Nikolic with a candidate from Mr Tadic's Democratic Party. A Parliament session was scheduled to take place on Sunday.

They had also agreed joint control of the security services, something Mr Tadic had insisted on because Mr Kostunica had not arrested top war crimes fugitive Ratko Mladic during his term.

The EU froze talks on a first-level agreement with Serbia last year over Mr Mladic, who it says is hiding in Serbia under the protection of hardliners in the security services.

But European Union Enlargement Commissioner Olli Rehn said yesterday: "Serbia's path to the EU will be revitalised immediately" if a pro-Western government was formed, apparently shifting the EU's policy of refusing to resume talks until Belgrade cooperates with the UN war crimes tribunal (ICTY).

But completion of the talks would depend on cooperation with the ICTY, he added.

The tribunal's chief prosecutor Carla del Ponte said she was "eagerly awaiting contacts from the new government" because cooperation had been "virtually at a standstill for over a year", and there was a lot of work to be done.