May 27 (Bloomberg) -- Serbia is counting on the capture of Europe’s most-wanted fugitive, Ratko Mladic, the country’s top general during the siege of Sarajevo and the Srebrenica massacre, to boost its drive to join the European Union.
Mladic, 69, who has been on the run from justice since his 1995 indictment, was found in a Serbian village 51 miles north of Belgrade using a false name. He appeared briefly at a court in Belgrade late yesterday looking frail and moving slowly with a baseball cap pulled down over his grey hair. He will stand trial at the United Nations War Crimes Tribunal in The Hague.
Serbian Prime Minister Mirko Cvetkovic’s government was criticized by the EU for dragging its feet on capturing Mladic and refusing to recognize the independence of the breakaway province of Kosovo. European leaders yesterday said the arrest shows the country’s determination to improve ties with the rest of Europe as it seeks to win candidate status this year.
“It’s a very brave decision by the Serbian president,” French President Nicholas Sarkozy said yesterday in Deauville, France, during a Group of Eight summit. “It’s one step forward for Serbia’s integration in the EU.”
Stocks and the currency rose yesterday after President Boris Tadic announced the arrest. The dinar gained 0.4 percent to close at 96.9 per euro after gaining as much as 1.3 percent during the day, according to the National Bank of Serbia. The benchmark BELEX15 stock index rose 1.5 percent to 790.44, the highest since October 2009.
Economic Laggard
Serbia wants to use its improved relations with the EU to close the gap with the 10 former communist countries in eastern Europe that have joined the trading bloc since 2004. Gross domestic product per capita was $5,260 last year, according to the International Monetary Fund, compared with $13,527 in Croatia, a former Yugoslavia partner that is in talks to enter the EU, and $38,600 in Germany.
“This is great news for investors, for the market and the dinar,” said Aleksandar Jaredic, the head of treasury at Volksbank’s unit in Serbia. “The moment the news broke, euro- selling began.”
Catherine Ashton, the EU’s high representative for foreign affairs and security policy, was in Belgrade yesterday to discuss a range of issues still dogging Serbia, including its “regional relations” in the Balkans.
Serbia refuses to recognize the independence of Kosovo, where it sent troops in the late 1990s under then-President Slobodan Milosevic. The NATO attacked Serb troops in 1999, under then-U.S. President Bill Clinton to force them out of the region and to protect local civilians.
‘Move Forward Swiftly’
Kosovo, a nation of 2 million mostly ethnic Albanians, declared independence in February 2008 and has been recognized by 22 of the EU’s 27 members and the U.S.
Serbia’s chief negotiator with Kosovo, Borislav Stefanovic, said the two sides have resumed talks on telecommunications, land registers, freedom of movement and other issues.
“I know that people will be thinking about Serbia and its EU future,” Ashton said in Belgrade. “We will approach it with new energy because of today. I look at the messages from Brussels and other European capitals to Serbia and hope that we will be able to move forward swiftly.”
Serbia plans to follow its former Yugoslav partners Slovenia, an EU member since 2004, and Croatia, which seeks to conclude entry negotiations this year.
“The arrest of Ratko Mladic is extraordinarily important for Serbia’s international position and for relations between Serbia and BH, and for all the countries in the region,” said Croatian President Ivo Josipovic.
EU Candidacy
“Our aim is not only to get candidate status, but also a date for the start of membership talks,” Tadic told reporters in Belgrade late yesterday. “It’s important not only for Serbia, but for the whole Balkan region.”
Serbia may become a candidate country next year, Standard & Poor’s said in a statement from London yesterday. The arrest is a “major positive step for Serbia’s further EU integration and underpins the sovereign ratings on Serbia,” it said.
S&P rates Serbia’s government debt at BB, its second highest non-investment grade, the same as Turkey, Macedonia and Montenegro. The Mladic arrest has no immediate effect on the rating, the credit evaluator said.
Investors will have more confidence after steps to strengthen the country’s economic recovery helped boost the pace of foreign investment, said Vladimir Gligorov, an economist at the Vienna Institute for International Economic Studies, who sees a start of negotiations in the first half of next year.
The country received about 800 million euros ($1.13 billion) in foreign direct investment in the first three months of the year, compared with 850 million euros for all of 2010.
“Improved EU prospects will certainly lower the risks to investments into Serbia,” Gligorov said.
--With assistance from Andrea Dudik in Prague, Jasmina Kuzmanovic in Zagreb, Boris Cerni in Ljubljana, Emma O’Brien in Moscow, Patrick Donahue in Berlin, Gonzalo Vina and Helene Fouquet in Deauville, France, and Irina Savu and Andra Timu in Bucharest. Editors: James M. Gomez, Balazs Penz
To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net Misha Savic in Belgrade at Msavic2@bloomberg.net
To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net
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