EU hails chance for pro-Europe government in Serbia

(Adds Rehn, details on war crimes tribunal)

By David Brunnstrom

BRUSSELS, June 24 (Reuters) - The European Union on Tuesday hailed an agreement between Serbia's Socialist and Democratic parties as a real chance to establish a pro-European government in the Balkan country.

The Socialist Party said on Monday it would join an alliance headed by the liberal Democratic Party to form a government after weeks of negotiations since an election on May 11.

EU Enlargement Commissioner Olli Rehn said he was awaiting a formal announcement by President Boris Tadic but hoped a government could be formed this week.

"There is a real chance Serbia will now have a truly pro-European government and I am very much looking forward to working with that government," Rehn told reporters during a conference on the Balkans in Brussels.

"Of course we have been for long looking forward to seeing a reform-orientated government in Serbia," he said, adding that this was important for Serbia's chances of joining the EU.

Tadic's Democrats emerged as the largest party in the May 11 election but failed to secure a parliamentary majority. Nationalists opposed to EU membership tried but failed to forge an alliance with the Socialists.

A pro-EU coalition in Belgrade will raise hopes in the West that Belgrade will hand over fugitive war crime indictees to the U.N. tribunal for former Yugoslavia (ICTY) in The Hague, a condition for advancing Serbia's EU entry prospects.

The indictees include Ratko Mladic, a Bosnian Serb general wanted by the U.N. over the genocide in Srebrenica, where 8,000 Bosnian Muslims were killed, and 10,000 deaths in the 1992-95 siege of Sarajevo.

Rehn said the formation of a new government should provide new momentum towards ensuring Serbia's complete cooperation with the ICTY: "I believe that full cooperation is possible once an EU-orientated government takes office."

Asked whether the EU could do business with a government including the Socialists, Rehn said: "We always judge our partners on the basis of their actions and deeds."

EU diplomats hope pro-EU leaders in Belgrade will smooth dealings over a planned EU police and civil administration mission in Kosovo, even though Serbian politicians widely opposed the province's secession in February. (Writing by Mark John; Editing by Timothy Heritage)