Tiny Montenegro takes on might of EU with vote on independence from Serbia

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They are putting out the flags in Montenegro - double-headed eagles that look as if they have been removed from an Austro-Hungarian museum.

But this is no historical pageant for tourists. On 21 May, the junior partners in the ramshackle successor state to Yugoslavia, the State Union of Serbia-Montenegro, will go ahead with an independence referendum likely to cut ties to Serbia and plant another new state on the map of Europe.

Brussels barely conceals its distaste. Still wrestling with the unlovely prospect of an independent Kosovo, the EU now faces the prospect of not one but two new poor, tiny members.

The EU has raised the bar as high as it can manage for the referendum, insisting on a 55 per cent majority in favour of independence before it will recognise the outcome. This unprecedented demand has angered but not daunted the authorities in the capital, Podgorica, who have been busy touring European capitals explaining the mountainous republic's case for going it alone.

Montenegro's ebullient Foreign Minister, Miodrag Vlahovic, says it is time Brussels faced reality and consigned the joint state with Serbia to history.

"If there is any vote in favour of independence, one thing is clear - the State Union won't exist," he said. "If we have the majority, the State Union is over and done with. We are not trying to dissolve a state that existed for centuries. It was a provisional arrangement that we entered precisely because there was an exit route."

The minister said Europe wanted to "compensate" Serbia for the likely loss of Kosovo in the current final status talks in Vienna by making Montenegro's escape from Serbia's embrace as tricky as possible. "We are hostages of Serbia," he said. "Everyone in the Balkans is a hostage of Serbia." While Brussels holds its nose, European diplomats are already flitting about Podgorica, scouting out a city in which sooner or later they will have to set up diplomatic shop.

Some are tussling over rights to the old embassy buildings that the big powers maintained in the former royal capital of Cetinje before the First World War, when Montenegro was an independent kingdom.

King Nicholas of Montenegro, a whiskery, wily old man who exported his striking daughters to courts all over Europe (one was queen of Italy in the Mussolini era), lost his throne in 1918, when the Serbian army annexed his land to the new state of Yugoslavia. In the late 1980s Yugoslav communists oversaw his reburial in Cetinje. But the attempt to stage-manage, and so defuse, history backfired; the ceremony unleashed memories of lost greatness that grew stronger in the 1990s.

Montenegro's pro-independence camp feels furious about the way they say Serbia under Slobodan Milosevic dragged them into war with Croatia, and especially into besieging the Croatian port of Dubrovnik in 1991. The Serbs reply that they didn't need much prodding. Some are quick to criticise the Serbs, blaming Belgrade for all their country's ills, from its grinding poverty to the dismally slow pace of integration with the EU.

Serbia's reluctance to hand over the indicted war criminal general Ratko Mladic gives some substance to the complaint. Without Mladic's surrender, everybody accepts the State Union is not going to get closer to the EU.

Meanwhile a bloodcurdling row over whether Serbs or Montenegrins should represent the State Union in the Eurovision Song Contest has raised tempers further. After a Serb audience booed the Montenegrin winners, No Name, off the stage in Belgrade, it was decided that no one would represent the country in Eurovision.

But not everyone shares the independence line. On an afternoon in Podgorica, a procession of Serb Orthodox bishops, priests, nuns and lay people, some waving Serbian flags, parading unchallenged through the centre of the city - a powerful reminder of the size of the pro-Serbian party in Montenegro.

At the centre of the commotion was the deceptively frail-looking Bishop of Montenegro, Amfilohija, a saint in the eyes of the pro-Serbian camp and "Satan" - as one man put it - in the eyes of the rest.

The bishop's supporters are not in the majority in the capital, which is the fiefdom of the pro-independence Prime Minister, Milo Djukanovic, but the vote will be close-run elsewhere.

Only 42 per cent of the population of Montenegro is registered as Montenegrin, followed closely by a 30 per cent bloc of ethnic Serbs who dominate parts of the north adjoining Bosnia and Serbia.

The pro-Serb "unionists" as they are called, accuse their opponents of bribing electors to vote their way. To the government's chagrin, they even captured one such transaction on film, in which a voter was promised relief from a year's electricity bills in return for a vote against Serbia.

While such tactics suggest the independence camp is more nervous than it lets on, Florin Raunig, an Austrian diplomat, says he doubts the vote will ignite any violence. Mr Raunig said Europe's insistence on 55 per cent voting for separation meant the vote could be inconclusive if the sovereignty camp gets more than 50 but less than 55.

In the meantime, the government acts as if the vote had already take place and gone its way. The Foreign Minister conducts diplomacy without reference to Belgrade, and the Serbian dinar is not the legal tender - this is euroland.

On the border with Albania, flags, banners, emblems and other references to the State Union came down long ago. Montenegro's double-headed eagle, it seems, has come to stay.