Serbia aims to be EU 'candidate' in 2008

The SAA is a type of EU pre-accession treaty designed specifically for the Western Balkans, which sets out political and economic reform goals. Once Brussels and the applicant country sign or initial the text, it has to be ratified by the 27 EU states before candidate status is given and accession talks start.

An SAA deal can take between nine months to three years to conclude, based on past form. Serbia's SAA talks have been frozen for over a year due to non-compliance with the UN war crimes tribunal. But last month, Belgrade handed over one wanted man, Zdravko Tolimir, to the Hague, gaining trust.

Mr Djelic said that one of the war crimes fugitives still at large, Ratko Mladic, "will be arrested as soon as he is found." He also suggested Belgrade has intelligence on the whereabouts of another indictee, Radovan Karadzic, but that the "privileged information" cannot be made public for now.

The 42-year old Mr Djelic - who speaks five European languages - said Serbia is pooling its "best and brightest" officials for the SAA job. He added that parliament is already passing a new law on audit standards and that Serbia's next budget will see curbs on the budget deficit and inflation.

"I am delighted to see Serbia back on the European track and back at the negotiating table...this is a moment to celebrate," EU enlargement commissioner Olli Rehn said. The usually deadpan Finnish commissioner even risked a humorous analogy while touching on Russia's role in the Balkans.

'Big, friendly bear'

"One has to be careful even when hugging a big, friendly bear that one isn't suffocated," he said, in answer to questions on whether ever-closer relations between Belgrade and Moscow could stand in the way of EU integration or help Russian firms gain better terms in upcoming Serb privatisations.

The joke touches upon the ongoing UN talks on the future of Serbia's UN and NATO-controlled province of Kosovo. On Sunday US president George Bush in Tirana, Albania said the majority-ethnic Albanian region of Kosovo will be independent whether Russia and Serbia like it or not.

But analysts say the situation is not so simple, as a Russian veto on a new UN resolution on Kosovo independence would mean the EU has no legal mandate to set up a new police mission and civilian supervisory authority, as planned for the post-independence phase.

Mr Djelic said Serbia "will peacefully defend the territorial integrity of our country." But the question remains how Serb SAA-type reforms can be taken forward in UN-run Kosovo if the status talks drag out for months, despite the fact the EU has set up an SAA "tracking mechanism" in the province.

The EU's Mr Rehn rejected suggestions Brussels is trying to barter with Belgrade, offering EU membership in return for Kosovo independence. "I don't think it would be fair to expect Serbia to make concessions on Kosovo in return for resuming its European track," he said.

But he admitted the parallel EU integration and Kosovo status talks cannot be separated entirely. "Serbia's return to the EU integration process should help change the terms of debate in Serbia, from looking to its nationalist past to a European future," Mr Rehn explained.

Mladic vagueness

On the specific subject of Mladic, the EU has already faced criticism from NGOs such as Human Rights Watch, which says it is backtracking on specific SAA-resumption conditions - such as the hand-over of the fugitive general - made when the talks were frozen last May.

Mladic has been indicted by The Hague on charges including genocide for his part in the Srebrenica massacre of 1995, which saw his soldiers slaughter 8,000 Bosnian Muslim boys and men. Mr Rehn on Wednesday underlined that bringing him to justice is "indispensable" for lasting Balkan "reconciliation."

But his answer was vague on whether Mladic has to be physically sitting in the Hague before the SAA can be initialled, or whether Belgrade can take other steps that would constitute "full cooperation" with the UN tribunal, on the same model which saw the SAA talks resume this week.

"For the conclusion of the SAA, it is a necessary condition to fully comply with the International Criminal Tribunal for the former Yugoslavia, which should lead to the arrest and transfer of all the remaining indictees," the EU commissioner said.