EU urges Serbia to finalise new government

BRUSSELS, May 14 (Reuters) The European Commission today praised positive progress in Serbia and urged it to finalise talks on a new government, holding out the prospect of a quick resumption of talks on future ties with the EU.

Prime Minister Vojislav Kostunica, a moderate nationalist, and pro-Western President Boris Tadic agreed a coalition on Friday after 16 weeks of on-off talks, to the relief of Western governments which had feared a resurgence of nationalism.

As part of the deal, the two sides agreed to unseat hardline parliament speaker Tomislav Nikolic, who resigned yesterday after two days of debate.

''In general they are going towards a better direction,'' EU Enlargement Commissioner Olli Rehn told reporters before a meeting of EU foreign ministers. ''Serbia is thus leaving its nationalist path and approaching its European future.'' ''Things are certainly better today than last Thursday and I trust that the leaders of the democratic forces will now finalise the negotiations and that the parliament will vote for the new government,'' Rehn said.

Asked under what conditions Brussels would resume suspended talks with Serbia on a Stabilisation and Association Agreement (SAA) the first step towards EU membership he said: ''The conditions are well known and I assume that the new government will be formed on the basis of such principles. That would enable us to resume the SAA talks shortly.'' Kostunica will present his cabinet to parliament late today or early tomorrow. The government must be voted in before midnight May 15, or new elections must be held.

Rehn said last week he understood the new government would be founded on the principles of striving for EU integration, completing cooperation with the International Criminal Tribunal for the former Yugoslavia, and achieving economic reform.

His comments appeared to soften the EU's policy of refusing to resume negotiations, suspended a year ago, until Serbia cooperated fully with the UN war crimes tribunal. Instead, he said completion of the talks would depend on full cooperation.

The bloc has so far failed to push Belgrade into arresting and handing over to the Hague tribunal former Bosnian Serb military commander Ratko Mladic, who is indicted on genocide charges and is believed to be hiding in Serbia.

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