Belgrade, 18. 07. 2008.

SERBIA - RUSSIA

• LAVROV, JEREMIC CONFIRM READINESS FOR ENERGY COOPERATION
• JEREMIC AND POLTAVCHENKO ON CONCRETE ECONOMIC COOPERATION

• DACIC URGES PROTECTION OF KOSOVO SERBS, OTHER NON-ALBANIANS
• EU CANDIDATE STATUS BY END OF YEAR IS GOAL
• NEW DIRECTOR OF SECURITY INFORMATION AGENCY APPOINTED
• OLIVER IVANOVIC STATE SECRETARY OF MINISTRY FOR KOSOVO
• KOSOVO SEALS IN PASSPORTS TO BE NULLIFIED AT BORDER

• DINKIC SAYS GDP TO BE 7,000 EUROS PER CAPITA BY END YEAR
• DULIC: HIGHWAY CONCESSION CONTRACT UNACCEPTABLE
• MRKONJIC: CONSTRUCTION OF CORRIDOR 10 HIGHWAY IS PRIORITY
• NBS: KOSOVO WILL NOT AFFECT RELATIONS WITH IMF, WORLD BANK

• SERBIA'S JUDICIARY INSTITUTIONS IN KOSOVO MUST BE FOSTERED
• BOGDANOVIC CONFERS WITH SERBIAN MEMBERS OF KPS
• BAN TELLS ZANNIER TO START WITH RECONFIGURATION OF UNMIK
• EU EXPECTS MORE CONSTRUCTIVE ROLE OF SERBIA IN KOSOVO
• KOUCHNER SAYS TIME NEEDED TO SOLVE PROBLEMS IN KOSOVO
• GOVERNMENT WILL BE COMPLETE AFTER VISIT TO WASHINGTON
• UNDP - KOSOVO IS POOREST IN REGION
• ABOUT 17,000 BULLETS, RIFLE SEIZED

MOSCOW, July 17 (Beta) - The foreign ministers of Serbia and Russia, Vuk Jeremic and Sergey Lavrov, on July 17 confirmed Belgrade and Moscow's readiness to fully realize bilateral agreements in the oil and natural gas industries.

Lavrov and Jeremic also confirmed Russia and Serbia's willingness to cooperate closely on the international level, especially when it comes to Kosovo.

We confirmed our commitment to the full realization of energy deals, Lavrov told a news conference after the talks, adding that the agreements would give a strategic character to economic relations and be in the interests of both countries.

Jeremic said there was no doubt about the future of the agreements, that they would be implemented and that the government of Serbia stood firmly behind them. According to him, one of the government's foreign policy priorities is cooperation with Russia and ratifying the agreement due to its strategic character.

Lavrov said he and his colleague had agreed that the proclamation of Kosovo's independence created increasingly bigger problems, not only in Kosovo but around it, and that the only long-term solution for Kosovo was one acceptable to both sides and approved by the U.N. Security Council.

According to him, Belgrade and Moscow have complete understanding for the European Union's wish to play a bigger role in Kosovo, but believe that the implementation of those desires has to be approved by the Security Council.

Russia and Serbia are concerned over the attempts to dismantle the existing legal structures in Kosovo and believe they are fueled by intentions to legalize structures whose essential goal is to implement the Martti Ahtisaari plan, Lavrov stated.

The two ministers said during their meeting that a change in the international civilian presence in Kosovo would only be possible with authorization from the Security Council and respect for its Resolution 1244.

Lavrov also said that Russia supported Serbia "unconditionally" in its intent to ask the International Court of Justice to rule on Kosovo's proclamation of independence.

Russian Ambassador to the U.N. Vitaly Churkin also attended the talks, held in the Serbian Foreign Ministry.

MOSCOW, July 17 (Beta) - Russian Presidential Representative Georgy Poltavchenko stated on July 20 that he had spoken with Serbian Foreign Minister Vuk Jeremic about concrete economic cooperation between the two countries.

After the meeting with Jeremic, who is currently visiting Moscow, Poltavchenko told Serbian reporters that the entry of the Bank of Moscow on to the Serbian market, the tender for the Bor copper mine and energy agreements were discussed during the meeting.

Bank of Moscow President Andrey Borodin and head of the Gazpromneft Work Group Dmitry Malishev were also present at the discussion.

Poltavchenko said that the issue regarding the price of the Oil Industry of Serbia (NIS) was not on the agenda, but stated that the issue "can be solved." "It seems to me that it is not only the price which is the most important, but also investments, and Gazpromneft has serious plans," Poltavchenko stated.

Poltavchenko told journalists that Malishev, who is also an advisor to the president of the Gazpromneft's board of directors, is prepared to visit Belgrade within two weeks to present a concrete proposal for the further narrowing down of the energy agreements.

According to Poltavchenko, it can be expected that the Bank of Moscow will have already started operating by September in Serbia, after all the necessary documents are signed and finalized.

Poltavchenko stated that Oleg Deripaska's firm, Basic Element, is again interested in participating in the Bor copper mine tender, but that so too are some other Russian and international companies.

BELGRADE, July 17 (Tanjug) - Serbian Deputy Premier and Interior Minister Ivica Dacic said in Vienna on Thursday that the unilateral proclamation of the independence of Kosovo has created numerous security problems and that the international community is obliged to protect Kosovo Serbs and other minorities.

"Serbia will do everything toward the preserving of peace in Kosovo and Metohija, but it is asking the international security forces in Kosovo to protect Serbs and all other non-Albanians. That is an obligation of the international community," Dacic told reporters within the ministerial conference of member-states of the Salzburg Forum on security in the western Balkans.

Dacic pointed out that the bulk of the illegal trade in narcotics, humans and arms in Europe takes place through Kosovo and Metohija. He underscored that there can be no peace and stability in the region without police and security cooperation among all the countries, regardless of the differences in their views on the status of Kosovo. "The fight against crime and corruption is one of the key objectives of the new Serbian government. Police cooperation in the region is imperative in order for that struggle to be successful," he said.

Serbia will meet all its obligations in connection with the International Criminal Tribunal for the former Yugoslavia (ICTY) in The Hague, he said, in spite of the present conviction that the ICTY is a biased court. He substantiated his claims about the ICTY bias with the not-guilty verdicts recently passed on ethnic Albanian Ramush Haradinaj and Bosnian Muslim Naser Oric in their trials for crimes committed against Serbs. Dacic reiterated that the Serbian police do not know the whereabouts of ICTY indictees Radovan Karadzic and Ratko Mladic. "That is not the job of the police, but of intelligence services, the domestic and the foreign," he specified.

BELGRADE, July 18 (Tanjug) - Serbian Deputy Prime Minister in charge of EU integration Bozidar Djelic said late on Thursday that Serbia's goal remained to be granted the EU candidate status by the end of the year.

Speaking for the Pink Television, Djelic said that the ideal and first realistic year for Serbia's EU integration was 2014, after the Lisbon Agreement takes effect, and that Serbia would be ready for membership in 2012. He said that if there was good will in the European Union, Serbia could get the candidate status during the French presidency of the European Union, i.e. at the last EU Council this year, on December 11-12.

Djelic said that ICTY Chief Prosecutor Serge Brammertz would arrive in Belgrade on July 23 and that Serbia had operational cooperation with the ICTY. If Brammertz presents this assessment before the EU Council of Ministers on September 15-16, a decision on the implementation of the provisional agreement on trade between Serbia and the European Union could be made at that date, he said.

BELGRADE, July 17 (Beta) - The Serbian government appointed Sasa Vukadinovic as the new director of the Serbian Security Information Agency on July 17, it was announced at a press conference held after a government session.

Vukadinovic had until now been the director of the Administration for the Execution of Penitentiary Sanctions in the Serbian Justice Ministry.

Serbian Minister of the Environment and Spatial Planning, Oliver Dulic, who made the announcement at the press conference in the Serbian government building, did not wish to speak about the work priorities of the Security Information Agency, stating that this is a subject for Vukadinovic to talk about.

Dulic mentioned that all members of the government unanimously reached the decision on appointing state secretaries and deputies in the ministries and several directors of government agencies.

Vukadinovic was nominated for the new position by the Democratic Party.

Former Security Information Agency Director Rade Bulatovic, who held the position during the two terms of Vojislav Kostunica's government, resigned when the new government was formed.

Vukadinovic is the fourth secret service leader since it was transformed from the State Security Service, under the control of the Ministry of Internal Affairs (MUP), into an agency under the direct control of the government in Aug 2002.

Vukadinovic was born on Jan. 12, 1972 in Krusevac, and graduated from the Belgrade Law Faculty in 1997. He worked for three years as a lawyer, he was then a federal official for less than one year, before becoming the head of Secretariat for Internal Affairs (SUP) of Krusevac in 2001. He remained in that position until June 2007, when he was appointed the head of the Administration for the Execution of Penitentiary Sanctions.

Sasa Vukadinovic is known for breaking up one of the most powerful criminal groups, the group of Zoran Jotic Jotka, as the head of SUP Krusevac during Operation Saber, conducted after the assassination of Serbian Prime Minister Zoran Djindjic in 2003.

BELGRADE, July 17 (Beta) - Oliver Ivanovic, a G17 Plus official in Kosovo, was appointed on July 17 as state secretary of the Ministry for Kosovo and Metohija. The decision to appoint Ivanovic was reached at a Serbian government session.

Ivanovic, who lives in Kosovska Mitrovica, was once a member of the Serbian National Council of Northern Kosovo, as well as a member of the Coordination Center for Kosovo.

At the parliamentary elections, organized by the international community in Nov. 2001, he was elected as an official in the Kosovo Assembly, and as a member of the Kosovo Assembly Presidency on Dec. 2, 2001.

He was the bearer of the Serbian Ticket for Kosovo and Metohija at the Kosovo parliamentary elections held in Oct. 2004.

BELGRADE, July 17 (Beta) - Foreign citizens with a “Republic of Kosovo” seal in their passports will only be able to enter Serbia after Serbian policemen nullify that seal, the government of Serbia ruled on July 17.

In a press release, the government said it had ordered the Serbian Interior Ministry to nullify the “Republic of Kosovo” seal appearing in any foreign citizen’s passport instead of the UNMIK administration seal before such persons are allowed to enter Serbia, and put a Serbian border seal in the travel document.

BELGRADE, July 17 (Tanjug) - Until the end of the year, the per capita GDP in Serbia should reach 7,000 euros and the economy will grow as the country comes closer to the European Union, Serbian Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic told Tanjug in an interview on Thursday.

Dinkic said that the state would have to attract between five and eight billion dollars of foreign direct investments every year and explained that his ministry had prepared a draft decree envisaging that the state cover up to 25 percent of the investment to strategic investors who invest more than 200 million euros and employ more than 1,000 people. This facility does not exist in any other country of South-Eastern Europe at this moment and it will be applicable only until 2010, because it is our idea to give special conditions to those big companies that arrive to this market first, Dinkic said and added that the idea was to encourage the entry of big IT, telecommunications and electronics companies. He said that the promised set of anti-corruption laws, including a law on the forfeiture of proceeds of crime and corruption, which would demonstrate the government's determination to deal with corruption, would be sent to the parliamentary procedure next week.

Stressing that the new government had demonstrated speed in the adoption of initial decisions (agreement with Russia and the SAA with the European Union were immediately sent to be ratified), Dinkic announced that Prime Minister Cvetkovic's Cabinet would show similar speed and effectiveness in its work in the conclusion of a contract with FIAT, which is interested in investments in the Kragujevac car factory.

"Final negotiations start as of today with the Italians, who have sent us lengthy documents and projections for the future development of the company" in Kragujevac, Dinkic said and added that this would be the first big investment of a foreign company in Serbia since the beginning of transition.

Speaking about the energy agreement with Russia, Dinkic, who heads the government's working group for negotiations with the Russian partner, announced that he would do his best to ensure an agreement that would "produce the maximum effect both for the Serbian and Russian economies."

Asked if this agreement was conditional on Russia's political support for the status of Kosovo-Metohija, Dinkic said that Russians had reiterated on several occasions that its stand on Kosovo was principled and that it was guided by economic interests and market principles in the economic issues.

BELGRADE, July 17 (Beta) - Environment and Spatial Planning Minister Oliver Dulic said on July 17 that the demands of the concessionaires for the construction of the Horgos-Pozega highway, which alters the concession contract signed in late March of last year, is unacceptable to the Serbian government.

Dulic said after a press conference, that the government did not discuss the concession at its July 17 meeting, but it is united in the stance of the National Council for Infrastructure that there is no basis for the concession agreement to take power.

According to Dulic, the concessionaire was made aware by the National Council of its stance, adding that the government will comment on the issue once it receives an answer from the concessionaire.

"There are three possibilities for solving the current situation regarding the concessions realizing the concession contract, which is the least likely one, secondly, an agreement for breaking off the contract, or trying to find a solution in court," Dulic said.

Economy and Regional Development Minister Mladjan Dinkic said that the contract for building the Horgos-Pozega highway will be nullified and that a new tender for the construction of the part of the highway from Horgos to Novi Sad will be announced.

The concession contract was signed between the Serbian government and the Alpina-FCC consortium in late May of last year, but the Spanish company FCC later gave its rights for the concession to Austrian construction company Por.

Dinkic told daily Vecernje Novosti on July 17 that a plan for financing the highway's construction in Vojvodina has been made, and that he expects that Serbia will receive a loan from the World Bank to cover a portion of the expenses.

BELGRADE, July 17 (Tanjug) - Priorities of the Serbian Infrastructure Ministry are the reconstruction, revitalization and construction of the traffic infrastructure in Serbia, which should be completed in the next three years, Milutin Mrkonjic told Tanjug on Thursday.

He specified that "the package" includes the construction of the highway on the Corridor 10 that is connecting Western and Southern Europe, the modernization of railroads, the Belgrade-Bar railroad in Montenegro and of Corridor 7, that is the regulation of the Danube river traffic, which is, as he put it, one of the most important in Europe. "The state agrees that only developmental projects can open new jobs and hire young people, and out biggest problem is unemployment. If there is one particular field where we can employ young people, then it is the field of infrastructure," Mrkonjic said.

He pointed out that at the Thursday session of the National Council for Infrastructure President Boris Tadic confirmed the country's commitment to even speedier realization of the infrastructure projects.

Explaining why the Council made the decision that there is no grounds for the coming into effect of the contract on the concession for the construction of the Horgos-Pozega highway with the Alpina-Porr consortium, Mrkonjic said that the additional conditions, sought by the concessionary, would significantly alter the basis of the contract, whereby a considerable amount of the financial burden would be transferred from the concessionaire to the Serbian tax payer, and that these demands are not in the interests of Serbia or its citizens. Among other things, the concessionaire wanted added guarantees from the state concerning traffic circulation of a value in excess of EUR 200mn, a four-year extension of the deadline for the highway's construction, as well as an extension of the concession from 25 to 30 years. Mrkonjic pointed out that the construction of the traffic infrastructure is only one of the priorities of the newly-formed council.

Along with the traffic, there are also the fields of energy, capital investments, construction and space planning, he said. "We will make an effort that our companies get jobs and participate in them equally with foreigners," Mrkonjic said, adding that the realization of Corridor 10 project is equally important to both Europe and Serbia.

NOVI SAD, July 17 (Beta) - National Bank of Serbia Governor Radovan Jelasic said on July 17 that the acceptance of Kosovo as a member of the International Monetary Fund (IMF) will not have any negative economic consequences for Serbia.

"There will be no economic effect on Serbia, because our quota remains. That means that from the point of view of an eventual need for taking out funds, the situation would remain unchanged," Jelasic said at a round table discussion held at a Novi Sad journalism school.

He said that the voice of Serbia in the IMF, as part of the "Swiss constituents," remains the same, meaning that Serbia remains in second place.

"Now it is only a question of what will happen politically regarding relations with the IMF and the World Bank. Relations have been very good up until now and I honestly hope that this is how it will remain," Jelasic said.

He added that there has been no word thus far of a possibility of Serbia breaking off its relations with the IMF and the World Bank because of the Kosovo issue.

The NBS governor disregarded the idea of the introduction of the euro instead of the dinar, since that would not solve the monetary or economic problems in Serbia.

BELGRADE, Jul 17 (Tanjug) - Serbian Justice Minister Snezana Malovic and a delegation of judiciary authorities from northern Kosovo-Metohija pointed at their meeting Thursday to the need for fostering Serbia's judiciary institutions in that part of the province.

They also pointed to the need for continuing cooperation with UNMIK in order to make judiciary institutions function better, in keeping with the UN Security Council Resolution 1244 and Serbia's legislation, Justice Ministry said.

GRACANICA, July 18 (Tanjug) - Serbian Minister for Kosovo Metohija Goran Bogdanovic is conferring in Gracanica with Serbian members of the Kosovo Police Service (KPS), who have been boycotting the command chain of the KPS main headquarters in Pristina since February this year, demanding to be placed under the command of the UNMIK police.

The topic of this meeting, which began around 11 a.m, will be the status of Serbian policemen since the main headquarters of the KPS extended them the unpaid suspension, and the previous composition of the Serbian government promised to take over and pay their personal income form the republic budget. However, not even after five months since the beginning of the boycott, the status of the Serbian policemen from central Kosovo and Kosovsko Pomoravlje has not been solved.

Following the talks with the police members, Bogdanovic will meet with the head of the Kosovo district and political representatives of Serbs from central Kosovo. After that, Bogdanovic will confer with coordinators of central Kosovo municipalities.

NEW YORK, July 18 (Tanjug) - UN Secretary General Ban Ki Moon said late on Thursday he had told his envoy to Kosovo-Metohija to start with the reconfiguration of the UN Mission in Serbia's southern province (UNMIK), it was said at UN Headquarters in New York on Friday.

"I have instructed UNMIK to cooperate with the European Union, in order for it to assume an enhanced operational role in Kosovo in the area of rule of law under the overall authority of the United Nations," Ban said in his latest report to the UN Security Council, according to Reuters. Ban said that he had given the instructions to new special representative for Kosovo, UNMIK head Lamberto Zannier of Italy, since he believed that the UN Security Council was incapable of offering guidelines for the reconfiguration of UNMIK. The UN secretary general said that a series of events had led to the creation of a new reality in Kosovo in which UNMIK could no longer fulfill the tasks of the transitional administrations efficiently, which was why he had reiterated his intention to pave the way for the European Union to take a more important role in ensuring the rule of law under the umbrella of the United Nations.

The United Nations keeps a strictly neutral position on Kosovo, he said and added that he believed that UNMIK could no longer act as transitional administration as efficiently as before. Ban said that the unilateral declaration of independence of Kosovo and promulgation of the so-called Kosovo constitution had resulted in greater tension between local Serbs and Albanians and added that the total security situation appeared to remain calm. According to announcements, the UN Security Council will review the new report on July 25.

BRUSSELS, July 18 (Tanjug) - The European Union will invite the new Serbian government next week to play a constructive role in the EU efforts to stabilize Kosovo-Metohija after the unilateral declaration of independence. The draft declaration, which should be adopted by the EU foreign ministers in Brussels on Tuesday, will welcome the formation of a new pro-Western Serbian government with a clear European outcome.

The Council has voiced expectation that the new government will develop positive relations with the European Union and its members and constructive approach to EU efforts with the aim of achieving peace and security in the Balkans, the draft said. The EU ministers will reiterate that Serbia can accelerate its progress to the European Union and get the desired candidate status as soon as it fulfils the necessary conditions, i.e. full cooperation with the ICTY.

More than 20 EU member-countries have recognized Kosovo and hope that Serbia will not try to undermine the EULEX mission.

VIENNA, July 17 (Tanjug) - French Foreign Minister Bernard Kouchner said in Vienna on Thursday that time was needed for a full resolution of the Kosovo issue and voiced hope that the EULEX Mission would soon be established in the province.

Things in Kosovo proceed satisfactorily, but not everything has been solved yet. An entire generation is needed for a solution, Kouchner said in an address to the OSCE Permanent Council.

Kouchner said he hoped that the EULEX Mission would soon be established because it would have an important role for a further development of Kosovo. He said that he was relatively satisfied with the developments in Kosovo, but that attention should still be attached to this problem. He also welcomed the role of the OSCE Mission in the past and in the future in Kosovo and stressed that nobody brought into question the positive role of the OSCE in Kosovo.

PRISTINA, July 18 (Tanjug) - Deputy Prime Minister of the provisional government of Kosovo Hajredin Kuci has stated that the remaining posts in the government will be filled after the return of the Kosovo president and prime minister from Washington, where they will meet U.S. President George Bush.

The consultations not only with representatives of Kosovo but with international representatives as well are in their final phase, and I believe that a decision will soon be made, media in Pristina quoted Kuci as saying.

More than a month after the Kosovo Constitution went into effect, a defense minister has yet to be appointed. Posts of deputy ministers of foreign affairs and defense, as well as that of the main inspector of the Kosovo Intelligence Agency have yet to be filled. Media reported that the names of Bajram Redzepi, current president of Mitrovica and former prime minister of Kosovo, and Fehmi Mujota, parliament member and member of the Democratic Party of Kosovo Presidency, are most frequently mentioned in regards to the post of defense minister.

PRISTINA, July 17 (Tanjug) - Kosovo-Metohija is the poorest region in South-East Europe, with the greatest unemployment rate, said a UNDP report presented in Pristina on Thursday. According to the World Bank, about 53 percent of the population of Kosovo is poor, while the unemployment rate is between 45 and 50 percent of the labour force, the report said.

UNDP head in Kosovo-Metohija Frode Mauring said that the report focused on assistance to the poor and requested from the Kosovo government to improve market conditions and to create better conditions for investors. There can be no sustainable development without a sustainable employment increase, Mauring said and added that private companies played a very important role in that sense.

PRISTINA, July 17 (Tanjug) - About 17,000 different bullets have been seized on the Vrbnica border crossing towards Albania, the Customs Service of unilaterally declared Kosovo has said in a statement.

After a detailed control of a vehicle, a small calibre rifle has been found and the Kosovo Police Service arrested the owner. The statement said that the bullets had been found during a routine control of a vehicle with Swiss registration plates at the customs office in Vrbnica.