Montenegro takes first step towards European Union

By David Brunnstrom

LUXEMBOURG (Reuters) - The world's newest state Montenegro signed an accord with the European Union on Monday that put the small Adriatic republic on the first rung of the ladder to eventual membership of the 27-nation bloc.

Prime Minister Zeljko Sturanovic signed the Stabilisation and Association Agreement (SAA) with EU foreign ministers in Luxembourg after overcoming a last-minute hitch involving Bulgaria, which objected to the wording of the text.

Sofia had threatened to delay the signature in its battle for the right to use the Bulgarian name "evro" for the currency in its Cyrillic alphabet, but it allowed the signing to go ahead after EU envoys pledged in a declaration to address the problem.

Montenegro, which has a population of just 650,000 people, voted to leave its union with Serbia in May 2006. Serbia's own progress toward EU membership was held up again on Monday by its failure to hand over war crimes suspects to a U.N. tribunal.

"Montenegro is closer to Europe today," Sturanovic told a news conference, adding that it hoped to launch an official application for EU membership in the first half of 2008.

Much work lies ahead with reforms to bring the country into line with EU standards and practices. Montenegro is not expected to join the bloc before 2015.

Rehn called Monday's signing "an important milestone" and said it showed that despite lingering problems, the Western Balkans was making steady progress towards the European Union.

"We often hear bad news from the Western Balkans and we do have serious challenges in the region. That's why it is great to have again good news from and for the Western Balkans."

Rehn said the SAA would bring concrete trade and economic benefits and a visa deal due to enter into force in January would bring easier and cheaper access to visas for Montenegrins.

"I trust that this SAA with Montenegro will serve as an inspiration for the other countries of the region too," he told the news conference.

The EU ministers put off a decision on initialing an identical pact with Serbia after the chief U.N. war crimes prosecutor said Belgrade's cooperation with her tribunal was insufficient.

Closer EU ties with Bosnia are also on hold after the ethnically divided country's leaders failed to agree on a police reform last week.