Kostunica in Montenegro for talks on new government

Montenegro looking for better relations with its larger partner Serbia

PODGORICA, Yugoslavia (Reuters) -- Yugoslav President Vojislav Kostunica visited Montenegro for talks with Serbia's independence-minded partner on creating a new federal government following the overthrow of Slobodan Milosevic.

As he flew to the Montenegrin capital, Podgorica, the republic's government rejected reports that it was poised to approve a new programme for talks with Belgrade based on two independent states with limited shared responsibilities, effectively consigning Yugoslavia to the dustbin.

His visit also coincided with remarks by Montenegrin Foreign Minister Branko Lukovac, a long-time advocate of independence for the tiny coastal republic of 640,000 people, that the two should separate and forge a loose partnership between sovereign states.

Shortly before arriving in Montenegro from a milestone visit to the Bosnian capital Sarajevo, Kostunica issued a statement calling on Montenegro's leadership to show good will and not rush into decisions on the republic's status before the formation of a Serbian parliament and government.

"Once these institutions are set up it will be possible to initiate meaningful, accurate and, what is very important, democratic dialogue on relations between Montenegro and Serbia," the statement issued by the presidency said.

A new transitional government in Serbia, the Yugoslav federation's dominant partner, is expected to be formed on Monday, to run the country until new elections in December.

Creation of a new federal government is seen as a priority issue in order to handle millions of dollars of international aid that has been promised to Yugoslavia following the overthrow of Milosevic.

Western governments have made it clear they do not see an independent Montenegro as viable and want it to remain part of Yugoslavia with Serbia, which has a population of 10 million.

Kostunica said that dialogue between the two republics should start with talks between expert groups, stepping up to contacts between parliamentary delegations.

The statement reiterated an earlier pledge from Kostunica that he would call a referendum on the future of the two republics if there was backing for it.

It was Kostunica's second visit to Montenegro since taking office, making good on a pledge to make relations with the republic a top priority.

After his first visit last Tuesday he said he was satisfied with the talks, during which he and Montenegrin leader Milo Djukanovic agreed that all problems between the two republics would be resolved peacefully.

Earlier on Sunday, Montenegrin spokesman Miodrag Vucinic said the government "has not received any initiative on defining a new platform for talks with Serbia on relations between the states."

He appeared to be responding to a report in the daily Vijesti that the republic's government would adopt a new platform this week for negotiations with Serbia based on two independent states with some shared functions in the fields of security, foreign affairs and economic and financial policy.

Montenegro's Lukovac told the weekly Polis: "I am certain that for both Montenegro and Serbia... it would be better if both states had complete independence and started building suitable relations as sovereign, independent and internationally recognised states and U.N. members."

Calling for a loose association without any special international and legal status, he said: "It would have as many joint functions as it suits both of them, aiming at co-ordinating rather than limiting the basic functions of the states that would form such an association."

Apart from the independence issue, Kostunica's search for a new government is also complicated by the fact that Montenegro's ruling Democratic Party of Socialists (DPS) boycotted last month's federal elections called by Milosevic.

This means that the Montenegrin members of a new government would be drawn from the pro-Milosevic Socialist People's Party (SNP), which did take part in last month's polls.

The Montenegrin leadership became increasingly estranged from Serbia during Milosevic's rule, during which he imposed a trade embargo on the coastal republic and sent in special army units to control the local police.

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