Milosevic allies spark power struggle

BELGRADE, Yugoslavia -- Key allies of ousted Slobodan Milosevic in the Serbian government have moved to wrest back key controls from new President Vojislav Kostunica.

They have announced they are taking control of the country’s police force, and are resisting attempts to purge the top military leadership.

CNN’s Nic Robertson said the dramatic move goes against the deal President Kostucina agreed with the Serb government on Sunday, his first day in power.

He said the Serb government is hardening its position and moving away from making a deal with Kostunica.

The development could lead to more street protests of the type that led to the resignation of Milosevic, he said.

Branislav Ivkovkic, a senior member of Milosevic's Socialist party, said pro-Milosevic Serbian Prime Minister Mirko Marjanovic is taking direct control of the 100,000-strong police force in Serbia. Serbia is the larger of Yugoslavia's two republics.

Meanwhile, the first steps are being taken in rebuilding the shattered economy of Yugoslavia, left in turmoil by the 13-year regime of former Milosevic.

VIDEO CNN's Nic Robertson says the visit by Hubert Vedrin shows Yugoslavia's improving international relations Play video (QuickTime, Real or Windows Media) CNN's Patricia Kelly explains what the lifted sanctions may mean for Yugoslavia. Play video (QuickTime, Real or Windows Media) CNN's Alessio Vinci explains what must be done before Milosevic is truly out of power Play video (QuickTime, Real or Windows Media) CNN.com Political Editor Robin Oakley analyzes the lifting of sanctions (October 9) Play video (QuickTime, Real or Windows Media) CNN's Jim Clancy examines possibilities for the future of Kosovo now that Milosevic is gone (October 9) Play video (QuickTime, Real or Windows Media)     TRANSCRIPT James Rubin on Yugoslavia     ALSO Struggling Serbian city awaits end of sanctions

The European Union, promising no quick fixes to Yugoslavia's economic shambles, said its priority was to draw up an emergency aid package to help the country through the approaching winter.

Catherine Day, deputy director general for EU external relations, said the new authorities had called for help in the energy sector with the cold Balkans winter just weeks away.

"We're trying to work out what kind of energy programme we can put in place in the next couple of weeks so that there will be enough energy here in the winter for heating and lighting," she said.

The new Yugoslav regime has appealed for urgent help. A senior adviser to new Kostunica said the country's assets had been siphoned abroad by Milosevic and his supporters.

Economic adviser Miroljub Labus told CNN: "Mr Milosevic left the house empty. We have two priorities -- short term and very short term. One is to survive the coming weeks and the other is to survive the winter.

"We are in the middle of a democratic revolution. We are changing the system. We will do it ... but we need urgent support.

"We have to ensure every citizen will be provided with basic foods."

The EU on Monday lifted an oil embargo imposed on Yugoslavia for Belgrade's 1998-99 crackdown on ethnic Albanians in Kosovo, but it will take time before the country can meet its energy needs.

An EU official said the 15-nation bloc might help finance imports of oil in the coming months and was also considering requests for medicine and food aid. Yugoslavia owes Russia some $400 million for fuel imports and the recent high price of oil has hit the economy hard.

In Britain, Trade Minister Richard Caborn established a task force of industry experts from leading British firms to examine the rebuilding of Yugoslavia.

He said he would look to send a delegation to Serbia in the next few weeks to carry out a damage assessment and rebuild trade links.

Balkan Stability Pact coordinator Bodo Hombach is due in Belgrade to discuss Yugoslavia's entry to a programme launched last year by major powers to help rebuild southeastern Europe. The Brussels-based Pact is likely to be the main channel for aid to Yugoslavia.

An international official in Belgrade said one of the biggest headaches for the new authorities was debt repayment.

Yugoslavia has some $14 billion of total external debt and just $385 million in foreign reserves. By comparison, Albania, seen as Europe's poorest state, has reserves of $482 million.

EU officials said the debt problem was not something Brussels could resolve. Instead it was looking at a longer-term programme of measures aimed at reviving the Serbian economy, which last year contracted some 30 percent.

"Over time we will be talking about longer and bigger financial assistance," Day said.

However, the plan might be held up if Milosevic sticks to his plan to carry on playing a role in domestic politics. The international community wants him extradited to face charges laid by the U.N. war crimes tribunal in The Hague.

Milosevic and his wife, Mirjana Markovic, remain in the up-scale Belgrade district of Dedinje, rarely leaving their home, where they are guarded by a paramilitary force of some 100 well-armed men.

Their daughter Marija is believed to be staying with them, though their son Marko is thought to be in Moscow having been refused entry to China.

Kostunica has frequently said he would not extradite Milosevic to the U.N. tribunal in The Hague, Netherlands, where he is wanted for war crimes in Kosovo.

The first U.S. diplomat to visit Yugoslavia since last year's NATO bombing campaign led to a break in diplomatic relations was also due in Belgrade on Wednesday, a U.S. official said.

William Montgomery, a senior diplomat expected to become U.S. ambassador to Yugoslavia when relations are restored, was driving to Belgrade from Budapest, an aide to Montgomery said.

Montgomery's trip preceded by one day the expected arrival in Belgrade of James O'Brien, President Bill Clinton's top Balkans adviser.

Reuters contributed to this report.

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