Montenegro embarks on division of assets with Serbia

PODGORICA, Serbia and Montenegro, May 23 (Reuters) Montenegro embarked on the process of negotiating the division of assets with Serbia today after taking credit for the peaceful, democratic dissolution of their 90-year partnership.

Although the state union dissolved by Sunday's referendum was only three years old, it was but the latest incarnation of a partnership going back to the end of the First World War.

Despite drifting apart in economics and law since 2003, the two republics are still deeply entwined in some respects, including sharing embassies around the world and armed forces.

Carrying out the split with Serbia became the main priority of Montenegro's leaders after official results announced today showed 55.5 per cent of voters had chosen independence.

Sweeping aside some late complaints by the ''No'' camp in Sunday's ballot, referendum commission chairman Frantisek Lipka told a news conference the ''Yes'' vote exceeded the target majority of 55 per cent set by the European Union, scoring 55.5 per cent in a strong turnout of 86.3 per cent.

''Official results show that the pro-independence side won ...I now expect Belgrade and Podgorica to engage in direct talks on the practical implementation of the results,'' said EU Enlargement Commissioner Olli Rehn, whose bloc Montenegro now hopes to join before Serbia.

Montenegrin Prime Minister Milo Djukanovic said in his first post-referendum news conference on Monday that ''the continuation of cooperation with Serbia and defining our relations on a new basis'' was a high priority.

But he called for a measured approach to such talks. ''In no way will we rush into some euphoric, unilateral moves,'' he said.

There has been speculation that Montenegro wants to make its official declaration of independence on July 13, its Statehood Day, after formal adoption by parliament of the referendum result.

Heading off fears that property might be seized, Montenegro has already adopted a declaration guaranteeing Serbian citizens in Montenegro all the rights they have enjoyed to date and ''this offer still stands'', the prime minister added.

On the diplomatic front, the Belgrade daily Blic reported that Montenegro would withdraw its ambassadors from 11 of 59 Serbia and Montenegro embassies in the coming weeks.

It will also open its own embassies, starting with one in the Serbian capital, deputy Foreign Minister Dragan Sekulovic was quoted as saying.

The future of 2,795 employees of the defunct state union administration is still uncertain, the paper said.

HAPPY TO QUIT One man who will happily give up his job is the president of Serbia-Montenegro, Svetozar Marovic, a Montenegrin who has been a prominent figure in the pro-independence camp.

''I will come to Belgrade, most probably next Thursday, to hold the last session of the Council of Ministers and resign from the post of the chairman of that body and from the post of the president of the state union,'' he told Tanjug news agency.

Marovic also said he would convene the Supreme Defence Council to orchestrate its dismantlement.

Blagoje Grahovac, a Montenegro adviser, told Reuters that property would be divided in line with the 2003 union charter on the territorial principle - what is on Serbian soil is Serbia's and what is on Montenegrin territory belongs to Montenegro.

Defence Ministry spokesman Zoran Puhac told Reuters the two republics had agreed more than a year ago on a list of military property - buildings, barracks, land - which the army no longer needed and which each was allowed to start selling.

''Montenegro has made progress in that respect and used the receipts of the property sold to finance its own reform of the army,'' Puhac said. ''Any decision on the division of military assets will depend on political leaders negotiating that issue.

Politicians have said division of assets would be a lengthy process.'' The template for dividing tanks, planes and ships may lie in the already agreed charter formula which gives 94 per cent to Serbia and 6 per cent to Montenegro.

''Debts and joint property will be divided according to a percentage that should be agreed and should be linked with the population and size of territory,'' legal expert Tibor Varadi was quoted as telling the Beta agency.

He predicted it would take six months to divide property abroad.

Serbia, which paid the lion's share of the costs of union, could also look forward to some budget relief. Its three years of partnership with Montenegro cost about 150 billion dinars (2.18 billion dollar), according to one newspaper report.

REUTERS SHR PM1941