The European Union broke off talks with Serbia yesterday for failing to hand over genocide suspect Ratko Mladic to the UN war crimes tribunal and the UN prosecutor suggested sanctions should be considered.
The suspension of the talks, aimed at eventual EU membership for Serbia, prompted a warning of political crisis and instability after Serbian Deputy Prime Minister Miroljub Labus said he was resigning.
Announcing the EU move, Enlargement Commissioner Olli Rehn said it was necessary to apply "rigorous conditionality" to countries aspiring to EU membership, a message intended to reverberate across the Balkans and reassure anxious EU citizens.
Mr Labus, who had headed the negotiating team for EU accession, said Prime Minister Vojislav Kostunica's failure to keep a promise to detain the wartime Bosnian Serb army commander had blocked the way to Europe and betrayed the people.
Mr Labus said his liberal G-17 Plus party would support the minority government for now but will decide on May 13 whether to stay in the coalition or pull out, triggering an election.
It was the first serious blow in two years for Serbia's ruling coalition and comes at a time when ultranationalist Radicals have a clear lead in opinion polls.
Mr Kostunica insisted his government was doing all it could to deliver Gen. Mladic, who is charged with genocide in the 1995 Srebrenica massacre of 8,000 Bosnian Muslims and the siege of Sarajevo, which killed more than 10,000 people.
"In view of the fact that his entire network of helpers has been uncovered, Ratko Mladic is now hiding completely alone. The question now is... to discover where he is hiding," he said.
Chief UN prosecutor Carla del Ponte said Serbia had misled her when it promised Mladic would be handed over last month, a deadline set by the EU, and said members of the UN Security Council would decide the next move.
"They can take a new resolution or even sanctions," she said. Diplomats said sanctions appeared unlikely at this stage.
The handover of Gen. Mladic, 64, is Serbia's most pressing issue, capable of battering Belgrade's credibility as it struggles to hold on to breakaway Kosovo province this year and persuade sister republic Montenegro not to choose independence.
The EU wants Gen. Mladic sent to the Hague war crimes tribunal before advancing Serbia's hopes of EU membership but is also anxious to maintain Balkan stability.
Mr Rehn announced a suspension of talks on a Stabilisation and Association Agreement - the first step towards eventually joining the EU - that began last year. The next negotiating session was due on May 11.