Kostunica's allies and Milosevic party still apart on Serbian government deal

BELGRADE, Yugoslavia - President Vojislav Kostunica won pledges of major economic aid from European Union leaders Saturday, but allies of ousted leader Slobodan Milosevic were reportedly backing down from a tentative deal to allow sweeping changes in the country's main republic.

Less than a week after taking office, Kostunica flew to the French resort of Biarritz to meet with leaders of the 15 European Union members. He left with pledges of $175 million in aid and words of encouragement as he seeks to extend control over institutions in Yugoslavia and its main republic Serbia.

The new Yugoslav leader assured his EU hosts that he was in control, telling them that ''Milosevic's power is waning from day to day, from hour to hour.''

Kostunica's trip was the highlight of the two-day EU summit in Biarritz.

''My presence here confirms that the situation in Yugoslavia is returning to normal,'' Kostunica said. ''I can confirm that the Serbia of tomorrow will be a symbol of peace in the Balkans.''

Back home, however, Milosevic's followers were resisting demands by Kostunica's Democratic Opposition of Serbia to give way to the pro-democracy movement. For nearly a week, Kostunica's followers said they were close to a deal with the Socialist Party to call new elections for the Serbian parliament and dissolve the republic's government in favor of a transition administration.

Serbia's government represents the last major bastion of Milosevic's supporters.

Late Saturday, however, Kostunica's adviser Vladan Batic accused Milosevic's followers of reneging on an agreement in principle for new Serbian elections and a transitional republican government.

He said the Socialists had given Kostunica's representatives a counterproposal which amounted to a mere reshuffling of the Serbian government. He accused them of trying to dodge the issue of early elections and sweeping changes in the Serbian administration.

This proposal ''is something entirely different from what we talked about before'' during negotiations, Batic told the Tanjug news agency. He said the Socialists also demanded Kostunica's supporters end the takeover of media, banks and major companies that had been run by Milosevic allies.

''These proposals are something DOS cannot agree with, but talks are continuing tonight,'' Batic said.

There was no statement from the Socialist Party, and talks between the two sides were delayed late Saturday, presumably to give Kostunica's advisers time to study the new proposal by Milosevic's followers.

Although there was no explanation from the Socialists about their apparent shift, the new proposals may have been drafted to try to win favor with their erstwhile Serbian Radical Party allies, who have rejected any new elections or transition government.

The Socialists need Radical backing to maintain control of the Serbian parliament.

Although Kostunica assumed the federal presidency on Oct. 7, he must cut deals with the leaderships of the two republics - Serbia and Montenegro - to wield real power.

On Friday, Kostunica's camp said Milosevic's representatives had agreed in principle to hold Serbian legislative elections Dec. 24. However, a late night meeting between the Socialists and Kostunica's aides broke up before dawn Saturday apparently only with an outline of the agreement.

Early Saturday, Batic said the agreement in principle called for the current Milosevic-controlled Serbian government to resign. Parliament would then approve a new transition government with representatives of both camps, after which the legislature would dissolve pending new elections.