Bosnia Contact Group still intact but impotent

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It is a year since five major powers - Washington, London, Paris, Bonn and Moscow - formed the Contact Group and waded into the mire of the Bosnian war in search of a settlement. The five envoys can pat themselves on the back this morning at their meeting in London. Despite internal disputes the group has survived, united. Bosnia is another story.

The political talks proposed under the four-month cessation of hostilities did not materialise, encouraging the Sarajevo government to pursue its aims on the battlefields. The secessionist Serbs are condemned to repeat their refusal to accept the Contact Group peace plan.The international community is therefore refining its policy of isolating the Serbs, hoping that by concentrating on President Slobodan Milosevic of Serbia, it can break the logjam. Modified plans include a Russian proposal to lift UN sanctions on Serbia in exchange for Belgrade's recognition of Bosnia and Croatia and a French suggestion for a summit of the leaders of those three countries.

Mr Milosevic, the patron of the Bosnian war, is seen as the key to peace. He was supposed to force the Serbs to accept a deal, but the Bosnian Serbs refused to play. Washington, which backed Sarajevo, made overtures to Radovan Karadzic, the Bosnian Serb leader, via Jimmy Carter. but the Serbs jibbed, to the fury of Mr Milosevic.

Belgrade believed that if the Bosnian Serbs had agreed to talks, which would not have required its army to yield an inch of land, sanctions would have been lifted.

The economic situation in Serbia deteriorates. This weekend the new dinar jumped from 2.1 to the German mark to around 2.7 on the black market and price controls expire on 1 April. Shopkeepers are buying up stocks in the expectation of price rises next month, which will create demands for higher wages the state cannot afford.

It was revealed that Mr Milosevic had spoken recently to a Bosnian envoy, though without giving any ground. But even if Mr Milosevic recognises Bosnia, it may make little difference on the ground. The Bosnian Serbs are well equipped and have survived for seven months with Belgrade's sanctions.

Mr Karadzic's call for peace talks on Saturday, following military defeats near Tuzla and Travnik, is likely to be accompanied by Serb counter-attacks.

The Bosnian Serb leadership has pinned its colours so firmly to the mast of Serbian nationalism that it is difficult to see a deal in the offing.