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DATE=10/09/00

TYPE=CORRESPONDENT REPORT

TITLE=SERBIA / GOVERNMENT RESIGNS (L)

NUMBER=2-267674

BYLINE=EVE CONANT

DATELINE=BELGRADE

CONTENT=

VOICED AT:

INTRO: Yugoslavia's prime minister has resigned, and opposition supporters in Serbia's legislature say they have agreed to new elections -- signs that the new President Vojislav Kostunica is consolidating his power. V-O-A Correspondent Eve Conant in Belgrade reports the moves come as the European Union ended most economic sanctions against Yugoslavia and offered aid to help rebuild the country.

TEXT: Yugoslavia's Prime Minister Momir Bulatovic has handed in his resignation, and opposition supporters in the Serbian legislature said it agreed on Monday to allow for new elections in December.

Lawmakers and top officials were pushed aside with little resistance, paving the way for a new government, led by President Vojislav Kostunica, to build its formal power base.

The resignations are a sharp blow to efforts by ousted leader Slobodan Milosevic to retain a hold in Serbia's top institutions. Serbia is the Yugoslav federation's largest republic.

If the Serbian government had been allowed to remain in place it could have blocked many reforms desired by the new government of President Kostunica. The new government is expected to win a strong majority in elections in December, dealing a final blow to supporters of Mr. Milosevic.

Pro-democracy leader Zoran Djindic said Monday, "We have achieved an important step in trying to create a transitional government, to create conditions for free and fair elections." Mr. Djindic said a transitional government of economic experts and party leaders will be formed to replace the existing Serbian administration, which was headed by staunch allies of Mr. Milosevic.

Meanwhile, Yugoslavia's defense minister tried to rally opponents of President Kostunica not to abandon ousted leader Milosevic. General Dragoljub Ojdanic (Drago-LYUB OY-danich) said disunity among Serbs was encouraging what he called "foreign enemies to occupy the country."

/// OPT /// General Ojdanic, who has also been indicted for war crimes, has not formally recognized Mr. Kostunica as president. He no longer has direct control over the army, but still retains influence among the military brass. Top generals are expected to be replaced as part of a sweeping purge, which democratic supporters and pro-Western Montenegro, the smaller republic of Yugoslavia, have long been demanding.

/// OPT /// Serbia's Interior Minister Vlajko Stojiljkovic, (VLAY-ko STOY-e-kovich)who has been indicted for war crimes, resigned in a public address to parliament. He said his ministry had defended the country against what he called, "Albanian terrorists, violence, and organized crime." Then, in a reference that links President Kostunica with the West, the Interior Minister joked, "I am attacked by NATO forces and am honored by that fact." /// END OPT ///

President Kostunica is expected to present his choice for prime minister and candidates for other cabinet posts within days.

Meanwhile, there was excitement of the capital's streets upon hearing the news that many economic sanctions against Yugoslavia have been ended. Yugoslavia has been under some form of sanctions for years. (Signed)

NEB/EC/GE/JWH