Mistreatment of minorities in northern Vojvodina provoked EU, Council of Europe criticism. Montenegro’s representatives in National Council for Cooperation with ICTY resigned 23 September citing Serbian obstruction. Milosevic trial adjourned until 12 October following controversial ruling to impose defence lawyers on defendant; decision led to approx. 300 defence witnesses refusing to testify. In response to dysfunctional state union, EU proposed “twin track” approach to Serbia and Montenegro. Serbian government provocatively appointed hard-line Milosevic loyalists to key posts in Kosovo's illegal parallel structures; yet to approve Serbian participation in Kosovo's elections. 19 September municipal elections resulted in no one-party local government in any municipality. Split-vote, mainly between Boris Tadic’s Democratic Party (DS) and Serbian Radical Party (SRS), led to coalition agreement between DS and PM Vojislav Kostunica’s Democratic Party of Serbia for 3 October second round elections. Serbian government reportedly conducted extensive search for war crimes indictees, seen by some observers as effort to deceive international community into thinking government cooperating with The Hague.

Serbian PM Vojislav Kostunica continued to deny knowledge of Hague-indictees’ whereabouts. U.S. repeated demands for extradition of former Bosnian Serb military leader Ratko Mladic to Hague Tribunal along with all other indictees. Interethnic tensions in Vojvodina and subsequent Hungarian and Croatian government protests increased pressure on Serbian government to address issue. Montenegro’s governing Democratic Party of Socialists’ leader, Miodrag Vukovic, said 18 August that Montenegrin authorities to formally propose end of union talks in September, although Belgrade Agreement stipulates Serbia-Montenegro must hold parliamentary elections before referendum on future of state union. Milosevic trial resumed 31 August to hear long-delayed defence. Serbian local elections to be held 19 September.

Serbian President Boris Tadic inaugurated 11 July. Visited Washington 19-21 July; held high-level meetings with Bush administration discussing stability of Serbia and cooperation with Hague tribunal. Defense Minister Prvoslav Davinic called for war crimes suspect Ratko Mladic to surrender to tribunal. Former Croatian Serb leader Goran Hadzic indicted 13 July, escaped detention prompting internal police investigation. Dejan Milenkovic, key suspect for assassination of Serbian PM Djindjic, turned self in to Greek police 17 July after 16 months on run. Representatives of ethnic Hungarians, largest minority in multi-ethnic province of Vojvodina, called on Belgrade to stop rising tide of inter-ethnic violence in region.

After 18 months without head of state, Democratic Party candidate Boris Tadic won second round presidential election, beating Tomislav Nikolic of Serbian Radical Party. Tadic won 53.7%, Nikolic 45%, with surprisingly high voter turnout of approx. 49%. Oligarch candidate Bogoljub Karic’s surprisingly high first round showing (18.8%) makes him new force on Serbia’s political scene. Uncertain whether Tadic’s election will have impact on Serbia’s political course. Hague tribunal president Theodore Meron told UN Security Council 9 June Serbia-Montenegro shows no signs of cooperating. Milorad “Legija” Ulemek pleaded not guilty to all charges related to murder of PM Zoran Djindjic.

Campaigning in full swing prior to 13 June presidential election; frontrunner Tomislav Nikolic of ultra-right wing Serbian Radical Party (SRS). 2 main challengers -- Boris Tadic and Dragan Marsicanin. Nikolic calling for resignation of PM Vojislav Kostunica and new parliamentary elections. Serbian parliament unlikely to meet 3 June World Bank deadline for budget readjustments, putting at risk renegotiated World Bank loan and assistance from EU, EBRD and IMF. Foreign Minister Draskovic survived no-confidence vote in parliament. His party, Serbian Renewal Movement, repeated threat to withdraw from government unless amendments to Criminal Procedures Act adopted. South Serbia's ethnic Albanians formed ‘Consensus Council’ 10 May aimed at uniting supporters of secession and pragmatists who accept integration into Serbia. Seen as pre-cursor to Albanian National Council and could alarm Serbs. Hague Tribunal sent complaint to UN Security Council over lack of cooperation from Belgrade. Dusko Jovanovic, editor of Montenegrin conservative daily Dan, shot dead 27 May.

Government increasingly unstable and reliant on Seselj's Serbian Radical Party (SRS) and Milosevic's Socialist Party of Serbia (SPS). Presidential elections scheduled for 13 June, this time without 50% voter turnout requirement which had invalidated 2 previous elections. Parliament adopted government's plan for resolution of Kosovo by creation of 5 ethnic Serbian cantons. Serbia reached tentative agreement with IMF and World Bank contingent on parliament reducing budget deficit by a third by June deadline. IMF support and certain World Bank and EU programmes on hold until approved. Attacks on ethnic minorities in northern province of Vojvodina jumped sharply. Reportedly more ethnically- motivated attacks since March than in entire period following Milosevic's ouster.

Following Albanian ethnic cleansing of Serbs in Kosovo 17-19 March, demonstrations broke out across Serbia: 2 mosques burned. Two Serbian police officials sacked for failure to respond properly. Serbia stepped up diplomatic efforts over Kosovo, PM Kostunica met NATO and EU officials. Kostunica’s calls for ‘cantonisation’ of Kosovo reportedly rejected by EU and NATO. New government officially sworn in 3 March, with presidential elections planned for May or June. Milosevic’s former minister of information appointed director of Radio-Television Serbia. Military police seized books from Helsinki Commission office alleging publication of state secrets. Democratic parties struggling to put forward presidential candidate against nationalist Radical Party leader Tomislav Nikolic. One year anniversary of assassination of former Prime Minister Djindjic 12 March. Trial of alleged killers overshadowed by murder of key witness. First Serbian war crimes trial started 9 March amid domestic and international scrutiny. Milosevic effectively refused to accept change of judge 25 March - remaining judges’ decision on continuation of trial awaited and will be subject to UN confirmation. U.S. decertified Serbia and temporarily suspended $26 million aid due to inadequate cooperation with The Hague tribunal.

Kostunica’s Democratic Party of Serbia likely to form minority government first week of March with G17+, Serbian Movement of Renewal (SPO) and New Serbia (NS), relying on support of Milosevic’s Socialist Party of Serbia (SPS). Dragan Marsicanin (DSS) elected as Serbian parliament speaker with SPS support. New elections seemingly avoided for time being. Defence Minister Boris Tadic won 22 February power struggle inside Democratic Party (DS) for party president. Presiding judge in Milosevic trial resigned for health reasons, effective 31 May; prosecutors concluded their case after 2 years of hearings. Kostunica said that further cooperation with Hague Tribunal will not be priority. Milosevic to be tried in absentia in Belgrade for murder of former Serbian president Ivan Stambolic.

Political instability continues. On 27 January Parliament failed to pick Speaker, and second session scheduled for 30 January postponed indefinitely. Process stalled by disagreement between 2 largest democratic parties, Democratic Party of Serbia (DSS) and Democratic Party (DS). DSS refuses to join majority government with DS unless DS cleans house of allegedly corrupt elements. DSS efforts to form minority government with Serbian Movement of Renewal-New Serbia coalition (SPO-NS) and G17+ failed. DSS leader Vojislav Kostunica’s recurrent suggestion to form a “concentration” government of all political parties including parties of war crimes indictees Slobodan Milosevic and Vojislav Seselj, failed due to refusal of DS and G17+ to support. Threat of new elections looms. Newly-passed US appropriations bill mentions arrest of Hague indictee Ratko Mladic as condition of U.S. financial assistance. Parties with either explicit or ambiguous anti-western positions now hold majority of parliamentary seats, and Milosevic-era oligarchy has played strong and worrying role in elections and coalition negotiations.

Parliamentary elections 28 December ushered in period of political instability. Nationalist Serbian Radical Party (SRS) led by indicted war criminal Vojislav Seselj won largest number of seats (82 of 240) in parliamentary elections; Milosevic's SPS won 21 seats. DSS led by Vojislav Kostunica won 53 seats, Democratic Party 37 and G17+ won 34. Neither Radicals not SPS likely to be in new government, but can block reforms. The new government, of whatever composition, likely to be short-lived. Recent ICTY indictments fuelled domestic debate about cooperation with Hague tribunal. SRS vowed not to extradite any more ICTY indictees to The Hague. Highly politicised trial of 44 suspects in March assassination of Premier Zoran Djindjic commenced in Belgrade 22 December, with chaotic scenes as defence lawyers walked out.