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Nov 07, 2007 19:01 EEST
(adds analysts comments)</p>BELGRADE
November 7 (SeeNews) - The European Union initialed on Wednesday an accord on closer ties with Serbia, a first step towards eventual EU membership for the Balkans country.
EU Enlargement Commissioner Olli Rehn and Serbian Deputy Prime Minister Bozidar Djelic initialed in Brussels the Stabilisation and Association Agreement (SAA).
"This agreement is creating concrete benefits for the Serbian people and conditions for uniting not only states, but also people in a very true European spirit," Rehn told a news conference.
The agreement will establish a free trade area and facilitate better conditions for investments and job creation for the citizens of the country, he added.
The SAA is a contractual agreement with the EU, which examines the legal, economic, industrial and social reforms that the country will have to introduce to meet European standards and create a free trade area. The EU also provides technical and financial support to help the partner country implement the agreement.
Serbia hopes after signing of the SAA to attain candidate status by the end of next year.
"I am satisfied with the initialing of this agreement with the EU and I am going to be very happy after signing of this agreement and I hope this is going to happen in the next few weeks," Djelic told the same news conference, broadcast live on the EU's Audiovisual Service.
"The initialing of the SAA is a signal of opening and trust for Belgrade -- but the conditionality over (former Bosnian Serb Army commander Ratko) Mladic still remains for the final signature," Antonio Missiroli, head of studies at the independent think- tank European Policy Centre (EPC), told SeeNews.
The initialing of the SAA should encourage Belgrade to cooperate more with the International Criminal Tribunal for the former Yugoslavia (ICTY) , then Mladic is either caught or just located by early December, thus allowing for the official signature of the SAA possibly in mid-December, he added.
According to Missiroli, the whole process was complicated and included three diplomatic goals: the SAA, the arrest or location of Mladic and the resolution of the Kosovo issue.
The parties have some six weeks to try and achieve some "success" for this bundle of issues, he said.
Since 1999, following NATO bombing that expelled Serb forces to end what Western powers said was repression of civilians in fighting an ethnic Albanian rebel insurgency, Kosovo has been under the administration of the U.N.
In September, a new round of talks on its status started under the mediation of representatives from the U.S., Russia and the EU. The so-called Troika hopes by December 10 to bridge the chasm between Serbia's offer for autonomy of the province and Kosovo's demand for independence.
"EU's decision to initial the SAA with Serbia has no immediate effect on Serbia's sovereign rating," S&P credit analyst Sladjana Tepic told SeeNews.
"In our view improved fiscal indicators, the resolution of the Kosovo question and the improved EU prospects could improve the rating, "she added.
Poor cooperation with the U.N. war crimes tribunal has been the main obstacle to the signing of the SAA.
Last month ICTY chief prosecutor Carla del Ponte said Serbia's cooperation was still insufficient. She reiterated her stand that Serbian authorities have to to arrest and transfer to the tribunal General Mladic, wanted for genocide and one of the four war crime indictees still at large.
In June, the EU resumed SAA talks with Serbia after two of the most wanted fugitives from the confllict in the former Yugoslavia, General Zdravko Tolimir and Serbian police general Vlastimir Djordjevic, were arrested.
"There has been intensified cooperation with the International Criminal Tribunal for the former Yugoslavia, which allowed us to initial the SAA today," Rehn said, warning that this is not the end of the road and full cooperation with the ICTY remains the necessary condition for the signing of the SAA.
On a discordant note, non-governmental organisation Human rights Watch said the European Commission's decision to move ahead with an association agreement with Serbia despite Belgrade's failure to arrest a key suspect could threaten efforts to bring war criminals to justice.
EU member states should refuse to sign the agreement until Serbia arrests and surrenders Mladic to the ICTY, the statement said.
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