FRY president Kostunica and Serbia's prime minister Djindjic

Belgrade, September 15 - "We expect that we will become candidates for EU membership by 2004 and we have two years to meet the necessary conditions, some of which are difficult - creating political stability, and resolving the problems of our statehood and constitution. We need a strategic alternative and harmonization of relations if we want to receive full membership status in the EU by 2010", Serbian Prime Minister Zoran Djindjic said at the "Reform Strategy" round table meeting in the Sava Center; the round table was organized by the Center for Liberal-Democratic Studies and the World Bank.

According to Prime Minister Djindjic, our state and society are currently in a sort of Bermuda Triangle. "We have people expecting swift and thorough reforms, we have a legitimate wish to stabilize institutions and we have difficulties reforming old institutions. These three elements are part of our reality", Djindjic said.

"We inherited a state isolated by international financial institutions. Unlike other countries in transition we are still denied access to world's financial markets. A quasi-market economy represents the second obstacle. At issue here is a tough symbiosis between a healthy and a sick part of the system. The question is - where to make the cut without harming the healthy tissue", Djindjic said, adding that the third impediment was a destroyed system as a result of bombing, sanctions and lost markets.

"However, this government achieved far better results than can be seen, and better than any other eastern European country. We did three rather important things - we adopted a new model of budget and tax system, and initiated the privatization process. One of the budget priorities was putting an end to gray economy. In this field we accomplished two objectives - we achieved a 90% success rate in halting oil trafficking, and a 60-65% success rate in cigarette smuggling. We cut business taxes by 10%, and real income has increased by 11%", Djindjic said.

According to Djindjic, two of the major problems were electric power industry reconstruction and wheat purchase from real sources. "We also have to restructure public enterprises, which is the 'gray zone' of the government and state", Djindjic stressed, announcing major investments in infrastructure in the upcoming year.

"Our activities have been praised by international institutions, but, at the same time, they have come under sharp domestic criticism", said Yugoslav Deputy Prime Minister Miroljub Labus, who is in charge of relations with international financial institutions.

"We need to speed up constitutional reforms, and we cannot wait for six months. We have to encourage political consensus on the continuation of reforms, and continue judiciary reform. The consequences of such political agreements will influence the country's credibility, the scope of our contribution to stability in the Balkans, and whether we will be able to move forward with reforms", Labus said, stressing that interest groups comprised of members of the former regime have consolidated and are starting to influence public opinion. "We are about to experience some huge problems and will have to make some tough decisions in the upcoming month", Labus said.