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The political and economic cost, he argued, would be too high.When Montenegrins look at the chaos of Serbia today, and note that Montenegro, because of its anti-Milosevic policies, suffered little bomb damage, they are more inclined to turn from the pro-Milosevic party of Momir Bulatovic, who is Yugoslav prime minister and opposition leader in Montenegro.An independence vote would certainly be split The north of Montenegro especially remains pro-Serb. Most observers would argue that the army has, on the contrary, been deeply politicised on behalf of the Milosevic regime.Even if theoretical agreement is reached today, the problems are not over. Montenegrin officials claim that about a hundred pro-Milosevic loyalists are being recruited daily.A statement by the general staff of the Yugoslav Army condemned “political propaganda” on the possible use of the army against Montenegro, and said that the army was a “depoliticised state institution”. Politika, the pro-government daily, this week declared: “Podgorica’s insistence on pursuing its dispute with officials in the Yugoslav capital is a cover for manipulation, hiding a much deeper conspiracy that could be the undoing of Montenegro and of Djukanovic as well.”Belgrade has sought to create an armed federal police in Montenegro, which the Montenegrin government fears could be used against the elected authorities. If Serbia fails to compromise, a referendum on independence will be held within the next few months.The Belgrade propaganda machine has trained its heavy guns on Montenegro in recent days, in moves reminiscent of the campaigns against the Croatian and Bosnian governments at the beginning of the Balkan wars. Mr Wolfensohn warned against that yesterday, while conceding that such an outcome was likely.. THE RULING parties of Serbia and Montenegro – the only two republics left in the shrunken Yugoslav federation – meet in Belgrade today for last-ditch talks intended to head off a likely Montenegrin bid for independence.

The possibility of Montenegrin secession would have seemed unthinkable until a couple of years ago. The relations between Serbia and Montenegro have been close – much closer than between any of the other six republics of the old Yugoslavia – but are nowdangerously fragile.
In the Montenegrin capital, Podgorica, the reformist government of President Milo Djukanovic has proposed the creation of a looser federation – “our last offer”, as the Foreign Minister, Branko Perovic, described it to The Independent – which will be discussed in Belgrade today. But it accepts that these numbers may rise after a fuller assessment.Several of Europe’s finance ministers have made clear that they oppose any increase in the EU’s spending plans, raising the prospect that other aid projects will have to be raided to pay for reconstruction in Kosovo. The European Investment Bank put the regional reconstruction costs at $25bn over five years, a figure in line with early estimates made by Romano Prodi, the incoming European Commission president, who put the price tag for reviving the entire Balkans region at $25bn to $30bn.More recent EU figures have been much more conservative, with the Brussels group preparing to make available 140m euros this year, followed by 500m euros for each of the next three years.The European Commission assumes that this will cover about half the cost of reconstruction, excluding humanitarian aid. No cash figure will be available until an assessment is completed in time for a meeting of up to 82 leading institutions and donor countries on July 28, he said.Until then a wide range of estimates is circulating.

It pointed to the fact that even before the conflict Kosovo was producing less wealth per capita than that of Albania, Europe’s poorest country.One official close to the negotiations said: “One party is talking about repairing what was damaged, and one is talking about reconstruction and regeneration of the wider, south-eastern Europe region.” He added that some of the European nations, who are expected to bear the lion’s share of the costs of the rebuilding, estimate the cash needed for Kosovo could be as little as $700m to $800m.Although the World Bank concedes that the physical destruction in Kosovo is less widespread than feared, its spokesman, Philip Hay, called for a more ambitious set of objectives, which would turn “a troubled and turbulent corner of south-eastern Europe into a bustling, mainstream European economy”.Yesterday’s meeting, which included finance ministers from the G7 club of wealthy nations, the World Bank, the International Monetary Fund and the co-ordinator of the EU’s stability pact for south-eastern Europe, agreed no reconstruction aid will be offered to Yugo- slavia while President Slobodan Milosevic remained in office.But the difference of emphasis over the scale of the task marks an opening shot in the battle over burden-sharing of the costs of Balkan reconstruction.James Wolfensohn, president of the World Bank, argued that the West needed to help “reconstruction of the morale and spirit of a people that has been brutalised”. Tensions surfaced at a meeting in Brussels of ministers and officials co-ordinating Balkan rebuilding, after the European Union played down the level of destruction by Serb forces and Nato bombing in Kosovo.
Later, Yves-Thibault de Silguy, an acting European commissioner, said: “The standard of living in Kosovo is higher than reflected in the available statistics and it seems the war damage is less than feared.”But this analysis clashed sharply with the findings of a report from the World Bank that said the economic problems of Kosovo were worse than many in the West supposed. There are fears that firms from these countries will have already secured the best contracts. Concerns will not have been eased by the appointment of Bodo Hombach, Chancellor Gerhard Schroder’s right hand man, as the European Union’s figure in charge or overseeing reconstruction contracts.Observers in Germany point out that Mr Hombach, a “business-friendly” Social Democrat, has a lot of friends in the German business world who will be lobbying to lend a hand with Kosovo’s reconstruction.. BIG DIVISIONS over the scale of the Balkan reconstruction effort split the world’s richest governments yesterday, amid fears that the total package of aid to Kosovo could be restricted to less than $1bn (pounds 600m). The fact- finding mission, made up of eight members, was told that it would be difficult to visit sectors controlled by other forces, such as France, Italy and Germany.