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. Last Updated: 07/27/2016

Hungary Moves to Lift Sanctions on Serbia

VIENNA -- Hungary has decided to normalize its relations with Serbian-led Yugoslavia, according to diplomatic sources here who said the move could deal a devastating blow to the U.N. economic sanctions against Belgrade.

The sources said that Hungary's decision is likely to influence Serbia's other major trading partners -- such as Romania, Bulgaria and Greece -- to adopt a similar stand that would probably lead to their easing up on enforcement of the sanctions.

The U.S. strategy of keeping Yugoslavia -- now composed only of Serbia and Montenegro -- a world pariah until a settlement to the Bosnian conflict is reached would then be in serious trouble, since the sanctions have been seen as the keystone to its success, these sources said.

Hungary signaled its intention to normalize relations in Geneva last Wednesday at a closed-door meeting of the steering committee of the International Conference on the Former Yugoslavia, according to a diplomat who was present. The committee was reviewing the efforts of the conference's cochairmen, David Owen and Thorvald Stoltenberg, to find a settlement to the Bosnian war.

The Hungarian representative at the Geneva meeting did not specifically say that Budapest plans to resume trading with Yugoslavia, according to the sources. But he appeared to signal his government's intention to do this by complaining bitterly about the high cost of the sanctions -- said to be $1.3 billion -- to Hungary's economy, they said.

Numerous U.N. economic and financial sanctions were imposed on Yugoslavia in 1992-93 to pressure it into withdrawing its forces from Bosnia and forcing its Bosnian Serb allies to agree to a settlement. With much U.S. prodding, they have been steadily tightened and have had a crippling effect on the Serbian economy.

But the sanctions have also hurt Serbia's neighbors, cutting off trade and investment and blocking road transportation. Hungary, Romania and Bulgaria have asked the United Nations for billions of dollars compensation.

The Hungarian decision follows a visit to Belgrade on Jan. 27-28 by Foreign Minister Geza Jeszenszky, who discussed with Serbian leaders the status and treatment of the 400,000-plus ethnic Hungarians living in Serbia's north.

After his talks with Serbian President Slobodan Milosevic, Jeszenszky said it was possible the Hungarian minority would be allowed even to have local self-government.

Jeszenszky was quoted in the Belgrade press he believed the sanctions would be lifted "soon."

Diplomatic sources here said Hungary has lost patience with the European Union and the United Nations to solve the Bosnian conflict.

Croatian President Franjo Tudjman reached an agreement with Milosevic on Jan. 19 to begin normalization of relations between Croatia and Serbia.