Serb PM, president agree coalition deal

Serbia:Serbia's president and prime minister sealed a long-awaited coalition deal yesterday, under pressure from a constitutional time limit and western powers who feared the country was slipping back towards nationalism and isolation.

President Boris Tadic and prime minister Vojislav Kostunica clinched the agreement after overnight talks in which they appear to have agreed to share key security duties and remove ultra-nationalist parliamentary speaker Tomislav Nikolic.

Mr Kostunica's support of Mr Nikolic's candidacy for the post last week enraged the more liberal Mr Tadic and prompted Washington and the EU to issue a stern warning to Belgrade over the growing power of nationalist elements.

Parties led by the president and prime minister finished well behind Mr Nikolic's Radical Party in January's general election and, had they failed to form a government before Monday, a new ballot would have been triggered.

With public anger running high over the political impasse and Kosovo's western-backed drive for independence, a snap election would probably have boosted the Radicals.

"The parties of the democratic bloc have reached an agreement," said Velimir Ilic, a senior ally of Mr Kostunica, who has been criticised by the West for his outbursts of nationalist rhetoric and failure to catch fugitive war crimes suspects.

Belgrade media said Mr Kostunica had finally bowed to a demand from Mr Tadic to accept joint control of the security and intelligence services that have so far failed to find the likes Radovan Karadzic and Ratko Mladic, the political and military leaders of the Bosnian Serbs during the 1992-1995 war.

The president and prime minister also reportedly agreed to bring together their parties to oust Mr Nikolic.

"I will step down, I will not wait for them to replace me," Mr Nikolic said yesterday, before denouncing the new coalition as a product of foreign pressure.

While Mr Nikolic was predicting a Radical Party victory in new elections, US and EU officials were pledging strong support for Mr Tadic and Mr Kostunica. EU enlargement commissioner Olli Rehn said "Serbia's path to the EU will be revitalised immediately" if a pro-western government is formed.