South Slavic: August 22, 2002

SERBIA AND MONTENEGRO: THE MARKET WILL REGULATE THEIR RELATIONS.

Part II.

A program of Radio Most (Bridge) with Omer Karabeg of RFE/RL's South Slavic and Albanian Languages Service and Danijel Cvjeticanin, professor of the Faculty of Economics in Belgrade and adviser to Yugoslav President Vojislav Kostunica, and Nebojsa Medojevic, director of the Center for Transition in Podgorica. It was broadcast on 21 July 2002.

RFE/RL: Some people have suggested that Serbia and Montenegro introduce a dual currency system, meaning that both the Yugoslav dinar and the euro would be official currencies on the territory of the two member states. Mr. Cvjeticanin, what do you think about the idea?

Danijel Cvjeticanin: There is already a sort of a dual currency system in Serbia. Our "money mass" consists of cash in euros and deposits in dinars. The ratio between the amounts of dinars and euros is on the side of the euro, since there are four times as many euros in Serbia as dinars.

Therefore, there is already a dual currency system here. But we also have our own monetary authorities as well as our own monetary policy, which is good for Serbia. It will be particularly good if economic growth is realized in the coming years. This will demonstrate the benefits of [having one's own] national monetary policy.

Nebojsa Medojevic: I think that payments in dinars should be allowed in Montenegro. It is in Montenegro's interest to do so, since most of the tourists in Montenegro come from Serbia. They prefer to use dinars instead of paying in foreign currencies, which they like to save for a rainy day.

Besides, the overvalued dinar is good for the Montenegrin companies that sell their goods in Serbia. It makes their goods cheaper in Serbia, while the dinars acquired that way can be exchanged for euros in Serbian banks. This is why I think payments in dinars should be allowed.

RFE/RL: Should the property of the Federal Republic of Yugoslavia be divided before the creation of the commonwealth of Serbia and Montenegro?

Cvjeticanin: I am afraid that the division of property of the former Socialist Federal Republic of Yugoslavia is not yet over. Only a part of it has been divided, and many things are still unclear. Many buildings in Croatia and Slovenia have not yet been returned to their owners in Serbia and Montenegro, just as many buildings in Belgrade that used to be common property have yet to be divided among the new owners.... These are not simple questions, and it is much too early to ask them just now.

Medojevic: I think that every new project should have a fresh start, and this is why I am for the division. Of course, I am well aware how complicated it is, and that it takes time. This is why we must not allow it to prevent the implementation of the Belgrade agreement.

Cvjeticanin: What I would like to say is that as time passes, the economy will impose the best possible solutions. It will impose a joint monetary authority, as well as other joint functions that some separatists call the blind pursuit of a unitary state and political hegemony....

Nobody should be forced to do things, but time will prove what is in the real interest of the citizens and their national economies.

Finally, the situation is changing. Until a few months ago, the joint state was not recognized in Montenegro. One was not even allowed to say the name of the Federal Republic of Yugoslavia, since it was called the so-called Federal Republic of Yugoslavia.

But officials from Montenegro are now coming to Belgrade to talk with the representatives of the international community as a part of the delegation of the Federal Republic of Yugoslavia.... Obviously, a step forward was made after the Belgrade declaration was adopted [in March], and I think that a second one will follow once the Constitutional Charter is finished.

Medojevic: The problems between Serbia and Montenegro started because of attempts to create a kind of a federal state and a federal government, instead of letting the two [republican] governments agree on which joint functions are needed.

I have never advocated a joint federal state. I prefer the idea of two independent states with a single market, according to the model of the European Union.

Now we have the Belgrade agreement saying that Montenegro and Serbia cannot be independent states, thus resolving the dilemma, at least for the next three years. But I do not think that the Belgrade agreement will help promote reforms. Quite the contrary, it has provoked political crises in both Serbia and Montenegro.

However, as I have just said, new forces have emerged to put an end to conflicts and unequal treatment. For the first time, the Serbian side has shown a willingness to make a fair and proper agreement and to respect Montenegrin national and state interests.

RFE/RL: What Mr. Medojevic wants is for the two governments to reach an agreement about relations between the members of the future commonwealth. Do you not agree with that, Mr. Cvjeticanin?

Cvjeticanin: There are two different views. Prominent Croatian journalist Neda Krmpotic first came up with the thesis about "disintegration [as a prerequisite] for a new unity." I do not share that view, but I can tolerate it.

Life in prosperous countries shows that a unified state...with a single market and the free flow of goods is the right way to prosperity. The creation of big states and big markets has been the trend in Europe since the 17th century. I therefore believe in big markets and a correspondingly strong joint state, albeit one with a limited number of functions.

Medojevic: My starting point is that we have had disputes between Serbia and Montenegro for 100 years now. The main reason for those disputes has always been the same message coming from Serbia: we must have a joint state or nothing.

Cvjeticanin: I prefer to stay away from this historical romanticism. Let us think about the future now.

Medojevic: Let us examine the recent past. For some 10 years, between 1992 and 2002, we had a political leadership that did many bad things to the citizens of Serbia and Montenegro. All those people are still at large, except for the one who is in The Hague.

This is why people are hesitant, doubtful, and afraid. I do not share Professor Cvjeticanin's obsession with the state. I think that life should be allowed to show which common functions and in what form should be shared by Serbia and Montenegro, with the full respect for the national tradition and national identity of each member state.

I am glad to see that the movement for independence is growing stronger in Serbia. The nations of Europe first set up their own independent states and then chose the way of integration based on their interests.

Cvjeticanin: It is true that the movement for independence is growing stronger in Serbia -- thanks to the arrogant policy of certain political groups in Montenegro.

You know that in Serbia there is no longer any great enthusiasm for a joint state with Montenegro.... Montenegro should think twice about what full independence might mean for it and its economic development. So many [unnecessary] problems might crop up. I think that my Montenegrin colleagues who so passionately advocate separatism actually have a very romantic vision of independence.

Medojevic: It is true that I believed in the romantic ideal of a Socialist Federative Republic of Yugoslavia as the right and only state for the South Slavic nations. I worked hard as a student for it to survive. But now, once such a creation has ceased to exist, I believe that what emerges should be based on new realities rather than old ideologies.

Serbia and Montenegro are far from being like Luxembourg and Belgium, which can talk to each other as two prosperous countries. We are talking about two ruined states here, like two drowning people close to the shore, who, instead of getting out of the water, are actually hugging and drowning each other.

For me, it is a luxury to waste so much time on such insignificant things as creating a kind of state that has never existed before. However, this is what the international community wanted us to do. What we [are expected to] do now is not make trouble, and let life define our relationship in the future.

Cvjeticanin: Serbia and Montenegro doubtlessly want to join the European Union. This is why they need to build a common market and ensure the unrestricted flow of goods, services, and capital investments, which will lead to the strengthening of the common elements of the economic system.

RFE/RL: You think that this common goal of joining the European Union might help unite the economies of Montenegro and Serbia?

Cvjeticanin: It is already uniting the views of economists, and, what is even more important, the attitudes of decision-makers in both republics.

Medojevic: The more we work to solve the problems of ordinary people and meet EU standards, the more our systems will be compatible. As that happens, the role of the state will lose importance, as will the issue of sovereignty and the single seat in the United Nations. What will become more and more important is how much progress we are making toward meeting EU standards.

RFE/RL: To wrap up, can we agree that the market should be allowed to regulate relations between the two states?

Medojevic: First, we should make sure that our [respective] interests are protected, and then we can deal with the issues of good will and future talks.

RFE/RL: Mr. Cvjeticanin, do you find this conclusion acceptable?

Cvjeticanin: Yes. We should create a single market and the conditions for joining the European Union more quickly. In 10 years, we might hardly be able to remember the issues raised nowadays.