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Montenegro wants looser links with outcast Serbia

The pro-Western government of Montenegro, Serbia's sister state in Yugoslavia, proposed radical reforms Thursday to move the tiny republic toward independence from the regime of Yugoslav President Slobodan Milosevic.

The reform plan stops short of calling for Montenegro's withdrawal from the Yugoslav federation, proposing instead that Montenegro and Serbia become separate but allied states with their own armies, banks and currencies.

Even a limited move toward independence could touch off a civil war between pro- and anti-Milosevic factions in Montenegro that could prove even bloodier than the conflict in neighboring Kosovo, where more than 11,000 people were killed and 1.5-million were driven from their homes during this spring's battle between Yugoslav forces and ethnic Albanian rebels.

It also could create huge problems for NATO, already struggling to contain seething ethnic tensions in Kosovo. The United States, which supports Montenegro's pro-Western government, has cautioned President Milo Djukanovic to go slowly to avoid further instability in the region.

Thursday's proposal quickly drew a harsh response from Milosevic's ultranationalist ally Vojislav Seselj, who called it tantamount to secession.

Seselj warned that the Yugoslav army would intervene if Montenegro tried to break away _ "just as the American (Army) would if California tried to go away."

Montenegro, with 630,000 people, and Serbia, with 10-million, are the only republics remaining in the Yugoslav federation, which once included Slovenia, Croatia, Macedonia and Bosnia. The federation began to break up in 1991, after the collapse of Communist rule and Milosevic's rise to power on a platform of Serbian nationalism.

Under the Montenegrin plan, Yugoslavia would be renamed the Association of the States of Montenegro and Serbia.

Western diplomats said Milosevic is unlikely to accept any proposal that would further diminish his grip on power so soon after losing the Serbian province of Kosovo to an international peacekeeping force.

Montenegrin officials _ long frustrated by Belgrade's iron rule and its status as an international pariah state _ have threatened to call a referendum on independence if Milosevic refuses.

Since the start of the Kosovo conflict, Milosevic has stationed more than 20,000 Yugoslav troops on Montenegrin soil, prompting speculation that a coup was in the offing. Montenegrin Deputy Prime Minister Dragisa Burzan said Thursday that he does not expect the army to move against the Djukanovic government.

A spectacular slice of rugged mountains and Adriatic coastline, Montenegro has been chafing under Belgrade's rule since Djukanovic won election in 1997 on a promise to secure economic development for the republic by distancing it from Serbia. Both republics are subject to international economic sanctions put in place after the Bosnian war.

On Thursday, Djukanovic took a major step toward that goal, proposing to abolish the federal government of Yugoslavia and replace it with a six-member "council of ministers" and a single house of parliament in which Montenegro and Serbia would have an equal number of votes. Montenegro would claim control over the army in its territory, and Serbian troops would be barred from entering Montenegro.

The 15-page proposal also declares economic independence from Serbia, proposing a new Montenegrin central bank and the creation of a new Montenegrin currency _ to be called the "perper" _ to replace the Yugoslav dinar, which has plummeted in value since the war over Kosovo.

Zarko Vukcevic, a member of Montenegro's ruling coalition, said the proposal "represents a major step toward a sovereign Montenegro because we are moving from the dead end called Yugoslavia."