Marcus Tanner: This murder must not be allowed to gun down reform

The murder of the Serbian Prime Minister, Zoran Djindjic, in Belgrade appears to confirm Serbia's reputation as a country that, even by Balkan standards, has proved unable to master the art of the peaceful transition of power. No country in the region has seen so many of its rulers dispatched by the assassin's hand.

From the founding days of the modern state in the 1800s, prince after prince has been shot, hacked to death or even decapitated. But whereas the deaths of all those Obrenovic and Karadjordjevic princes often signalled little more than "regime change" of the blandest kind, the question Serbs are asking after Djindjic's murder is whether the entire cause of modernisation has suffered a lethal blow.

From the days when he rallied the crowds into thinking the unthinkable about Milosevic, the suave, talented, multilingual leader of the Democratic Party appeared to carry the cause of Serbia's westernisation and democratic transformation on his shoulders.

He always appeared a cut above the rest of the Serb political class. In a country traditionally obsessed by fear and loathing of Germany, Djindjic cultivated German business and political contacts. In a society where politicians cultivated an unshaven, macho image almost as a point of principle, Djindjic sported a dandy look. No crumpled, Milosevic-style blue outfits for him. He was turned out in expensive cream-coloured suits, his hair immaculately cut. Western diplomats were wowed. After years of dealing with Milosevic's thugs, they were up against a man who looked like a male model, not merely the leader of a new Serbia, but a new Serb himself.

Serbs are right to be worried by the implications of his murder, for it is questionable who can carry forward the baton for the country's reform. The obvious contender is Nebojsa Covic, Djindjic's Deputy Prime Minister and a man of proven skill. As second in command, he deftly handled Belgrade's complex relations with its all-but-lost province of Kosovo and – with little fanfare – secured a political settlement to the Albanian insurrection in the Presevo area of southern Serbia.

But while Covic may guide the tiller over the next few weeks, only elections, which now will have to be held, can reveal whether he possesses the clout in the country to take on the powerful vested interests of the ultra-nationalists, the old Milosevic élite and the mafia – all of which are intertwined.

Part of the reason why Djindjic survived as long as he did (unkind thought though it may sound at this moment) is because he was almost as much of a thug as they were. Underneath the natty suit and gleaming smile, Djindjic was as rough an operator as any of them. As one Serb commentator told me: "He was reformist, but the idea that Djindjic was a great fighter against 'the mafia' is a joke. He ran his own mafia!"

The difference between Djindjic and his enemies was that he did not have the tunnel vision of the barons of the Serbian underworld. He may have been a corrupt Tammany Hall politician, but he was committed to dragging Serbia out of the cul-de-sac that Milosevic had left it in and propelling it towards the lights of Europe. The extradition of Milosevic to The Hague was an act of great bravery. Common wisdom then was that it would spark an uprising.

Many Serb observers believe that what happens over the next 72 hours will be decisive. With the proclamation of martial law, power has passed from the police – heavily penetrated by the mafia – to the army, which may be more resistant. The army must move immediately to crush the "Red Berets" and the other paramilitary gangs that have gained a stranglehold over political and economic life. If not, the gangs will have shown they can kill political leaders with impunity, and the reformist cause is finished.

Even if the army does act decisively, the cause of integration into Europe and progress in general has sustained a massive setback. As one economist told me: "No one is going to come and invest in a country where the premier can be shot dead on the street." Furthermore, there will be a period of political stalemate over the coming months before fresh elections deliver anyone a clear mandate. That means more time lost for economic reforms.

The psychological damage is hard to assess. Many Serbs, even those who disliked Djindjic, fear their country is condemned never to escape the cycle of bloody instability it experienced in the 1990s. "We thought the years of violent conflict were finally over," one Serb friend me. "Now it's all coming back."

With the West preoccupied over Iraq, the danger is that Europe and the US may give little thought to what happens in Serbia. This would be a great error. Whatever their divisions elsewhere, the West must unite in demanding that the authorities in Belgrade locate and punish the perpetrators of this crime. The nonsense of pretending that no one knows where Radovan Karadzic or Ratko Mladic are hiding must be ended and the two Bosnian war crime suspects handed over to the Hague tribunal.

It is time to cut a few Gordian knots in Serbia. That would continue the work begun by Zoran Djindjic – an imperfect man admittedly, but one with a certain amount of the "vision thing" for all that. If not, Serbia will slither backwards, dragging several of its Balkan neighbours with it.

The writer is the author of 'Croatia: a Nation Forged in War'