CEOL - Yugoslavia Says Will Not Block EU Oil Aid

BELGRADE, Nov 16, 1999 -- (Reuters) The Belgrade government will not disrupt deliveries of European Union-funded fuel to two opposition-held towns in Serbia, even though the scheme is discriminatory, a top official said on Monday.

Goran Matic, information secretary in the Yugoslav government, said he doubted the program would ever be implemented, but if it was, the government would not stop it.

"There will be no problem. It can be realized," Matic said by telephone.

EU officials signed a memorandum of understanding at the weekend with the mayors of Nis and Pirot in southeastern Serbia, both opponents of Yugoslav President Slobodan Milosevic.

The document, the first concrete sign that the controversial scheme would go ahead, came two months after the EU first agreed to the plan, known as Energy For Democracy, to ease expected winter hardships following NATO's air strikes over Kosovo.

The aim is to help ordinary people and democratic forces in Serbia but not the Yugoslav leadership, which the West has tried to isolate with sanctions, including a fuel embargo.

Politics not only factor

Michael Graham, head of the European Commission's delegation in Belgrade, said Nis and Pirot were singled out because they were close to the Bulgarian border and did not have access to gas from Russia via a pipeline running through Hungary.

"The pipeline doesn't reach that far," he said. In Nis, 28 percent of households as well as schools and hospitals depended on oil.

Graham said the initial delivery would consist of between four and five thousand tons of heating oil and that the future of the scheme would depend on getting the first trucks through.

He is so far keeping the date under wraps. "It's not there until it's there so I don't want to talk about schedules," he told Reuters in an interview. "I hope it is a matter of days rather than weeks."

Graham said that under the memorandum, the EU would be responsible for getting the fuel to the Yugoslav border, while the two mayors would have to sort out the necessary paperwork with the authorities and pay any taxes levied.

"Our responsibility stops at the border, while the responsibility of the cities starts from there," he said. He had not discussed the scheme with Belgrade authorities but was prepared to explain it to them if asked.

Journalists, officials to oversee delivery

The mayor of Nis, Zoran Zivkovic, is braced for possible hurdles and has said he will take officials and journalists to the border to ensure it gets through.

Zivkovic and the mayor of Pirot are due to charge citizens a limited sum to cover taxes and other administrative costs and have undertaken to accept monitoring and auditing from the EU to ensure the fuel reaches its destination, Graham said.

The government, which has a habit of citing bureaucratic obstacles when it objects to something, has said the towns could not charge for the fuel, arguing it was humanitarian aid.

But Graham said since the oil aid was politically targeted and as people would have to pay for it, it did not count as humanitarian aid. It was distinct from the 56.1 million euros ($58 million) in assistance earmarked for Serbia, excluding Kosovo, for this year - about six times 1998's total.

He said it was one of the first times the EU had attempted such targeted aid. The aim was to convince Serbia that under certain conditions it would be welcomed into the European fold.

"This has a political component. We're entering unknown territory," Graham said.

Matic was scathing. "There have been many speeches and no concrete action. It looks like a scam," he said. "It is classic discrimination...They want to turn Serb voters into Pavlovian dogs."

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