U.S. and EU push for progress in troubled Balkans

SARAJEVO (Reuters) - Europe and the United States teamed up on Tuesday to press Bosnia, Serbia and Kosovo to overcome the legacy of Yugoslavia's bloody collapse as a condition of closer integration with the West.

"If you do not make progress you will be left behind," U.S. Secretary of State Hillary Clinton warned at the start of a trip to the region with EU foreign policy chief Catherine Ashton.

NATO member Croatia will follow Slovenia in joining the 27-nation EU next year, but accession is a very distant prospect for the other five countries carved from federal Yugoslavia in the 1990s.

In Bosnia, where 100,000 people died in a 1992-95 war, Clinton urged rival Serb, Muslim and Croat leaders to overcome ethnic infighting that has stalled reforms sought by the EU and NATO, "for the sake of the young people of this country".

In Serbia, Clinton and Ashton called on the government to mend relations with Kosovo, the former Serbian province where ethnic Albanians declared independence in 2008 with the backing of the United States and major European powers.

"This is good for Serbia and it is good for Kosovo," said Ashton, who is leading a push for agreement in EU-mediated talks.

Serbia rejects the secession, and some Serb leaders still hold out hope of retaining a small northern region of Kosovo populated by Serbs and controlled from Belgrade.

CRISIS HURTING EU INFLUENCE

Clinton, whose husband Bill Clinton wrestled with the wars in Croatia, Bosnia and Kosovo as U.S. president, said this would not happen.

"Kosovo is an independent nation," she said after meeting President Tomislav Nikolic and Prime Minister Ivica Dacic.

"The borderlines of Europe will not change. But there is still a great deal that can be accomplished by Serbia and Kosovo working together.

"I understand that this is difficult. But it goes hand in hand with meeting the needs of the Serbian people."

The West invested heavily to cement peace and stability in the former Yugoslavia, using the pull of NATO and EU membership to reconcile foes and encourage reform.

But progress has been patchy. The debt crisis in the euro zone has contributed to a growing sense of resistance among some EU members to further enlargement, and hurt the bloc's influence in the Balkans.

"The euro crisis and the EU's diminishing ability to win hearts and minds threaten to both marginalize and fragment the western Balkans," Dimitar Bechev wrote in a policy brief for the European Council on Foreign Relations think-tank.

While Croatia will join the EU next year, others are at least a decade behind. Bosnia has yet to apply for membership, its development hostage to opposing visions of its future.

Bosnia's Muslims want the central state strengthened, but are opposed by leaders of the autonomous Serb Republic who frequently threaten to secede.

Clinton said such threats were "totally unacceptable" and a distraction from the real problems facing the country.

The Muslim chairman of the rotating Bosnian presidency, Bakir Izetbegovic, said the EU and U.S. investment in Bosnia's future would be "preserved and protected".

"We have to finally turn toward and focus on building a joint future in this country," he said.

Clinton and Ashton flew to Kosovo late on Tuesday ahead of talks on Wednesday. Clinton, who is expected to step down as secretary of state early next year, will then continue to NATO allies Croatia and Albania.

(Additional reporting by Daria Sito-Sucic in Sarajevo and Aleksandar Vasovic in Belgrade; Writing by Matt Robinson; Editing by Andrew Roche)