15 July General Affairs Council

Date: 18/07/1996

THE EU is struggling with the question of how to force Bosnian Serb leader Radovan Karadzic from the political scene before the September elections. French and British Foreign Ministers Hervé de Charette and Malcolm Rifkind again called on Karadzic to resign as leader of the Serb Democratic Union (SDS). De Charette said “all measures, including sanctions, should be considered” to force him out. But Karadzic's position has sparked a debate: if he runs for office and wins he will perpetuate divisions in Bosnia, but if he is prevented from campaigning Serbs will boycott the elections and the peace process could crash. The EU and US appear to be far apart on the issue. While the US says campaigning may not begin until Karadzic is off the SDS party rolls, France and other member states support International High Representative Carl Bildt, who is trying to weaken Karadzic's position gradually.

FOREIGN ministers appointed a new EU administrator for the Bosnian city of Mostar. Sir Martin Garrod will replace Ricard Pérez Casado on 22 July to continue the Union's efforts to broker peaceful cooperation between the city's Muslim and Croat populations. Member states had agreed to extend the EU administration of the city from June until the end of the year so that efforts to repatriate refugees and rebuild the region's economy could continue. Casado, who took the job two months ago, said he would no longer be available to serve. Last month, Casado organised elections in Mostar which were part of the plan to unify the city, but the results provoked fears instead that divisions in Bosnia would be cemented forever.

THE Union will hit back if Washington bars European businessmen from entering the US and sues EU firms for dealing in Cuba. Foreign ministers agreed on a series of possible retaliatory measures, including compiling a 'watch list' of US companies that take legal action against Union firms; legislation in European courts to counter-sue those US firms; restricting entry visas for Americans coming into Europe; and taking the US to a dispute settlement panel at the World Trade Organisation.

MINISTERS made progress in negotiations with Switzerland designed to allow EU citizens and goods to move freely in the country. Talks have been dragging on since 1994 in seven sectors, including rights for EU citizens to work in Switzerland, air and land transport, research cooperation, access for farm goods and public procurement. Both sides hope for a deal by the end of this year.

THE long-running feud over regional development funding for North Africa and the Middle East was unblocked when Greece agreed to lift its veto of the MEDA aid package for a dozen Mediterranean nations. The EU wants to link the 12 to the Union by creating a zone of free trade and investment. Athens had blocked the 3.4-billion-ecu regional funding package because it included money for Turkey. Greece fears Turkey's territorial ambitions on its islands in the Aegean, and has demanded EU solidarity. The lifting of the veto was a real breakthrough, but Greek Foreign Minister Theodoros Pangalos warned that Athens would be watching Ankara's every move and would reserve the right to bar Turkey from regional plans.

MINISTERS criticised Burma's government for suppressing democracy movements there, but did not agree to Danish demands for sanctions against Rangoon. The Danish honorary consul in Rangoon, James Leander Nichols, died on 22 June. Arrested in April, he was sentenced to three years in prison for allegedly supporting democracy activists. EU governments said they did not want to impose sanctions on Burma without UN backing.