Serbia signs special ties deal with Bosnian Serbs

BANJA LUKA, Bosnia, Sep 26 (Reuters) The leaders of Serbia and Bosnia's Serb Republic signed an agreement today intended to strengthen mutual political and economic relations.

''This event will not only improve the links between the Serb Republic and Serbia but will also help stabilise the relations in the region,'' Bosnian Serb President Dragan Cavic said after signing the deal with Serbian President Boris Tadic, five days before Bosnia-Herzegovina holds a general election.

Under the Dayton peace treaty which ended the 1992-1995 Bosnia war, the Balkan country's two highly autonomous regions, the Serb Republic and the Muslim-Croat federation, were allowed to establish special links with their neighbours.

The agreement allows for closer cooperation in areas such as the economy, tourism, culture, education and tackling organised crime.

The Bosnian Serb Republic signed a similar deal in 2001 with what was then Yugoslavia. That agreement had to be redefined after Montenegro's vote in May to leave a state union with Serbia, which succeeded Yugoslavia in 2003.

''I support strongly all integration processes in the territory of former Yugoslavia,'' Tadic said, adding that the deal guaranteed Bosnia's territorial integrity and sovereignity.

''In the coming period I expect a strong influx of investments of Serbian companies into the Serb Republic and Bosnian economy in general.'' He was accompanied by 100 Serbian businessmen who had earlier announced investments of some 100 million euros in the Bosnian Serb Republic.

REUTERS BDP RK2135