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Authors: Adam LeBor

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With his Croatian confidant, Tudjman's envoy Hrvoje Sarinic, Milosevic was more relaxed. When Sarinic met Milosevic in Belgrade on 12 November 1993 he asked the Serbian leader about Arkan. Milosevic laughed loudly, and said: ‘I too must have someone to do certain kinds of dirty work for me.'
30

16
Milan Panic
The Two Republics of Federal Yugoslavia
1992–3

Shut up.

Yugoslav prime minister Milan Panic, to Serbian president

Slobodan Milosevic at the London Conference on Bosnia,

August 1992.
1

And then there were two. After Slovenia, Croatia, Bosnia and Macedonia declared independence and departed from Yugoslavia, only Serbia and Montenegro were left. In April 1992, these two republics formed a new state, formally known as the Federal Republic of Yugoslavia. This time Milosevic did not call for the word ‘Socialist' to be moved to the front. Here finally was, in effect, ‘Serboslavia', a Yugoslavia controlled by Serbia, subordinate to Serbian interests, as decided by one man. Montenegro was little more than a pliant puppet, at least at this time. Its president was Momir Bulatovic, the man dubbed ‘the waiter' for his servile obedience to Milosevic. Unconstrained by troublesome republics seeking independence, the Serbian president was able to totally dominate the new mini-Yugoslav state.

Milosevic ensured that the old federal structures and ministries remained in place. He argued that this Yugoslavia was the legitimate inheritor of its predecessors, and so could keep the assets of the old Yugoslavia, and the Yugoslav seat in the United Nations. Perhaps most importantly, Milosevic also used this opportunity to cement his control over the military. Supreme command of the army now rested in the new Supreme Defence Council. This had three members: Milosevic, President of Serbia; Momir Bulatovic, President of Montenegro, and the next President of Yugoslavia.

The question was, who should that be? A new country demanded
a fresh face at its head. Milosevic turned to Dusan Mitevic. Although Mitevic had been sacked from his position at Belgrade Television a year earlier, behind the scenes he remained a key Milosevic adviser. ‘Milosevic asked me who we should have as president. I said nobody from the Socialist Party. He said, then who should we have, if not one of us? I said let's take someone from the opposition. I suggested Dobrica Cosic.'
2

It was an imaginative idea. At this time there was talk of Otto Habsburg becoming president of neighbouring Slovenia. Within Serbia the nationalist revival had reawakened interest in the country's own royal family. History, and tradition – these would coat the third Yugoslavia with a veneer of legitimacy. Still Milosevic had doubts. Cosic was the intellectual godfather of Serbian nationalism. What would Mira say when he went home and told her this? And would Cosic accept? After a brief honeymoon in 1990 the intellectuals had fallen out with Milosevic, realising that at heart Milosevic was an autocrat motivated by power, not a Serb who believed in patriotism and the glories of the ‘heavenly people'. Mitevic recalled: ‘I told Milosevic that difficult times were coming, that we were a country in transition, we should think democratically, and get someone who will not put us in prison later. Apart from Milovan Djilas, we only had one dissident in the last thirty years, and that was Cosic.'

Milosevic considered his position. He knew that he was in trouble on both the diplomatic and home fronts. With two wars on its borders, its economy collapsing under sanctions, its nascent democratic institutions wrecked, this third version of Yugoslavia was not a very mighty construct. Its citizens were tired, confused and weary of war. International outrage about the brutality of Serb ethnic cleansing was turning Yugoslavia into a leper state. Germany, in particular the foreign minister Hans-Dietrich Genscher, had forced through the diplomatic recognition of Croatia and Slovenia, over the heads of other EU countries. Croatia was eternally grateful to its former wartime ally. Croats sang along to a new popular song, ‘Danke Deutschland'. The Café Genscher opened in the Adriatic port of Split. Clearly, the world was changing, and perhaps Serbia should change with it.

Increasingly, Serbs were simply not willing to fight in Milosevic's wars. The JNA had been wracked by desertions. One soldier drove his armoured personnel carrier back to Belgrade and parked it in front of the parliament. Another shot himself in the head in front of his
commanding officer. Others stripped off their uniforms and escaped through the borderland woods into Hungary. In March 1992 the Serbian patriarch, seen as the country's spiritual father, held a mass at Belgrade's St Sava church for the victims of the street protests a year before. When the service was broadcast live on Belgrade Television, Milosevic ordered the programme taken off air.

Angry and ashamed, many Serbs began to turn against their leader. Protestors took to the streets, pitching tents in downtown Belgrade. Milosevic was unnerved, fearing a rerun of the street protests of March 1991. Crowds were one of Milosevic's favourite political weapons, but he knew that a mob could be a two-edged sword. Like a pack of wolves, crowds sensed weakness in their prey. ‘Just you wait, Slobodan, Ceausescu awaits you,' the protesters chanted in Belgrade. Students and young people used imaginative agit-prop to get their message across: the parliament was wrapped in a giant black ribbon to protest against the siege of Sarajevo. Parents joined the demonstrations, calling for the return of their sons from the frontlines in Bosnia. Milosevic even appeared on television to try and calm the situation and proclaimed that Serbia was not at war, and no Serbian soldiers were serving outside the republic. Perhaps a part of Milosevic even believed it. In Belgrade, some began to question his grip.

Confronted with the disastrous reality of his policies, Milosevic reverted to denial, outright mendacity and fantastical talk of wonderful economic opportunities. Warren Zimmerman's last meeting with Milosevic, on 19 April 1992, was a vintage encounter. The US ambassador came to dinner with a carrot as well as a stick. Washington was prepared to consider ‘potential' international acceptance for Yugoslavia if Serbia reversed ethnic cleansing, and withdrew the JNA from Bosnia. The meeting started at 7.30 p.m. Meanwhile servants laid out dinner in the adjacent room – grilled lamb, plates of vegetables and bottles of wine and fruit brandy.

Just ten days before, the Bosnian city of Zvornik had fallen to a combined force of JNA troops and paramilitaries. Milosevic, initially conciliatory, listened carefully to Zimmerman's arguments of Serb and JNA involvement in the ethnic cleansing of Bosnia. He then claimed: ‘No armed Serb irregulars have crossed into Bosnia.' Eventually Milosevic admitted that Arkan was indeed in Bosnia, but only as a ‘bodyguard' for one of the Bosnian Serb leaders. And so it went on. Milosevic claimed that: ‘Violence in Bosnia is not in Serbia's interest;
we have no territorial pretensions in Bosnia. We favour the European Community negotiations. Those shelling Sarajevo – if the shelling is really happening – are criminals.'
3

It is hard to know what Milosevic was thinking. Did he really believe that the ambassador of the most powerful country in the world, with extensive intelligence services, and spy satellites that could read a car numberplate, did not know what was happening in Bosnia and who was responsible? Perhaps Milosevic, like many Serbian politicians, was suffering from ‘a concept deficit.'
4
At one press conference in Geneva a journalist had asked the Bosnian Serb leader Radovan Karadzic about the first priority to rebuild the country. ‘We will need a lot of glass,' replied Karadzic. ‘We have many broken windows.' At a previous meeting with Zimmerman, on 6 April, Milosevic had also flatly denied that a single Serb was serving in Bosnia. He had described Arkan – among whose many business interests was an upmarket patisserie – as a ‘simple sweetshop owner'. Little wonder that Zimmerman dubbed Milosevic the ‘Teflon dictator'.

After three and a half hours of hard talking, Zimmerman, Milosevic and their officials retired to eat. The lamb was now coated with cold fat, and the vegetables had wilted. Still, Milosevic waxed lyrical about Yugoslavia's economic potential. ‘With its efficient agriculture, energy resources, and key location for transportation – plus a free market – it will be in a strong position to attract foreign investment. Why only this week we were approached by French businessmen about a project for building a high-speed train.' At the end of the meal, Milosevic, perhaps made sentimental by his memories of New York, made a plea for friendship with the Americans. ‘I'm not so bad, am I? Am I such a black sheep?'
5
Zimmerman was speechless.

Milosevic had a sentimental attachment to the United States. Fuelled by Viljamovka pear brandy, he often recalled his days as a banker in New York and his shopping trips on Fifth Avenue. Although Milosevic was a Balkan bully, part of him craved the respect of the most powerful country in the world, and its envoys as well. Not long after their dinner, Zimmerman was recalled to Washington, D.C., in protest at Milosevic's policies in Bosnia. Perhaps that snub brought back the anger Milosevic had felt in 1989 when no western ambassadors attended the Gazimestan spectacle. Zimmerman's leaving party was marred by an unpleasant incident: his garden was invaded by a gang of sinister hoodlums who began spraying insecticide all around.

* * *

Meanwhile, the more Milosevic thought about Dusan Mitevic's suggestion, the more it made sense. His natural instinct was to exclude everyone outside his immediate circle from any position of power or influence. But co-opting Cosic would be more subtle. Cosic was second in stature perhaps only to the Serbian Patriarch. His appointment would legitimise the third Yugoslavia, and help defuse domestic opposition. Persuaded by Milosevic's arguments that he would be doing his Serbian patriotic duty, Dobrica Cosic accepted.

As Serbian president, Milosevic controlled the Serbian government and the Serbian parliament. He also controlled the Yugoslav parliament through his loyalist MPs, who would ratify his choice of Yugoslav president and prime minister. Milosevic asked Dusan Mitevic if he had any ideas for suitable prime ministerial candidates. Mitevic suggested Milan Panic, an émigré Yugoslav cycling champion who had defected in 1955. Arriving in the United States a penniless immigrant. Panic had built up a successful pharmaceutical business, ICN, based in California. Panic had invested heavily in Serbia, buying up the Galenika pharmaceutical factory.

Mitevic introduced the two men to each other. ‘It was love at first sight. Panic is an open and good-hearted man. Milosevic was a banker who understood business. Milosevic was telling Panic how important privatisation was.'
6
Mitevic saw Panic's appointment as a chance for Serbia to democratise and move away from one-party control. ‘I thought we should work peacefully with the opposition parties. That's why I brought in Panic. My idea was that instead of presenting ourselves as a Communist country, we would have a rich American imperialist as prime minister.' After a long drunken dinner, Milosevic offered Panic the prime ministership of Yugoslavia. After ensuring that he could keep his US citizenship, Panic accepted.

Milosevic's plan was that Panic, with his contacts in Washington and the business world, would be the modern, western, face of Yugoslavia. The sun-tanned capitalist would be Milosevic's front-man, whom he could use to defuse the growing international outcry over Serbia's actions in Bosnia. Milosevic was wrong. Before Panic was even officially inaugurated as Yugoslav prime minister he demanded that Milosevic resign. He proposed that the Milosevic family move to California, where Milosevic would take up his old profession of banker, on a fat salary with plenty of perks. For a while, Milosevic appeared, or more likely pretended, to consider this. This proposal was not well
received at home. Mira was not willing to sacrifice her Balkan intrigues for
Baywatch.

Panic picked a cabinet of pro-western, reform-minded ministers for his new Yugoslav government, although Milosevic ensured that a few of his loyalists were also appointed. The Yugoslav minister of justice was Tibor Varady, an ethnic Hungarian from Novi Sad who had studied law at Belgrade University with Milosevic. He recalled: ‘At some point Milosevic felt that the threats of western military intervention, of bombing Serbian positions around Sarajevo, were becoming serious. So he needed to pull a rabbit out of his hat, and offer a gesture to the world.'
7

The new Yugoslav Prime Minister was not willing to be a front-man for ethnic cleansing. In his inaugural speech to the Yugoslav assembly in July 1992 Panic called for the recognition of Croatia and Bosnia, the lifting of sanctions against Yugoslavia and the withdrawal of all Yugoslav military units, including paramilitaries, from Bosnia. He said he would order Serb leaders in Bosnia to close the concentration camps.

Panic's plan was to offer the West the removal of Milosevic, in exchange for sanctions being lifted. It seemed a simple enough quid pro quo. Panic saw this as essentially a business deal between two partners who both had something to trade. But he was not as well connected in Washington as either he or Milosevic thought. James Baker, US Secretary of State, was not disposed to get involved in what he thought was a European problem. President George Bush, facing an election campaign, was not very interested. The word in Washington was the United States ‘did not have a dog in this fight'. Sanctions were anyway a matter for the United Nations, not the United States. And the Brahmins of the State Department regarded Panic as a wild card. He was neither a professional diplomat nor a politician, but someone out of their control.

Panic was certainly out of Milosevic's control. In July he flew to besieged Sarajevo to meet with Bosnian President Alija Izetbegovic. There he condemned ‘cheap politicians who have played on nationalism and created a civil war', a clear shot at Milosevic. He went to Pristina and met with Kosovo Albanian leader Ibrahim Rugova, and called for human rights for ethnic Albanians. He also sacked Mihalj Kertes from his post as deputy Yugoslav interior minister. Kertes was working for the Serbian secret service, and his involvement in Milosevic's dirty tricks dated back to 1988 when he had bussed demonstrators into Novi Sad to throw rocks
and yoghurt. He had also played a role in distributing weapons to the Serb rebels in both Croatia and Bosnia.

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