Serbian leader "no longer trusts" coalition allies

By Ellie Tzortzi

BELGRADE (Reuters) - Serbia's government is in deep crisis, nationalist Prime Minister Vojislav Kostunica said on Friday, accusing his pro-Western coalition partners of giving up on defending Serbia's claim to Kosovo.

State news agency Tanjug quoted Kostunica as saying he "no longer trusts his coalition partners, the Democratic Party and G17 Plus party, to be sincerely fighting to preserve Kosovo", which declared independence from Serbia on February 17.

"The government is in deep crisis, because there has been no readiness to firmly together insist that Serbia can become an EU member only as an integral state, with Kosovo," Kostunica said. "Over the next few days, parties must agree on a way out."

In Helsinki, former U.N. special envoy Martti Ahtisaari said Kosovo's independence was irreversible and Serbia was damaging its own interests by not accepting it.

"There is no return to the past. Kosovo is now independent and it will start seeking membership in the international financial institutions to improve its economy as its first priority," Ahtisaari, who drew up the independence plan, told Reuters in an interview.

Serbia should now look to the future instead of jeopardizing its chances of European Union membership by active resistance, he said.

The Kosovo crisis has prompted Kostunica to move closer to Russia, which opposed the province's secession, and away from the European Union, whose biggest countries backed it.

His anti-Western line has driven him closer to the positions of the hardline nationalist Radical Party, Serbia's strongest single party which is now in opposition.

That has fuelled media speculation that if the current coalition collapses, Kostunica could turn to the Radicals to form a new majority, and would also seek to team up with them in the case of a snap election.

Political uncertainty is hurting the economy, with data pointing to decreasing investor interest and a weakening currency.

LIBERAL CHALLENGE

In the latest sign of a coalition split, Kostunica's bid to rule out any deal on closer EU ties until the bloc revokes the independence of Kosovo was overruled 2-to-1 on Thursday by his Democratic and G17 Plus partners, who said a parliamentary motion to that effect would drive the country into isolation.

It was the liberals' strongest challenge to Kostunica's policy of 'Kosovo above everything', after months of allowing him to make anti-Western statements and stoke nationalist feeling over the province, Serbia's religious heartland.

No major party is ready to concede the loss of Kosovo, whose breakaway last month also enjoyed U.S. backing.

Speaking in Kosovo, U.S. Assistant Secretary of State Daniel Fried said "it's up to Serbs what their future is."