Serbs, ethnic Albanians fail to define Kosovo's economic status

VIENNA, Austria (AP) - A sixth round of talks between Kosovo's ethnic Albanians and Serb officials on Wednesday failed to produce an agreement on the disputed province's future economic status.

The latest round of U.N.-brokered talks on Kosovo's legal status focused on its debts, liabilities and investments, privatization issues and the future ownership of key industrial assets, said Albert Rohan, a U.N.-appointed mediator.

He described the meeting as fruitful, but added that "whatever the final status of Kosovo might be ... there will be some sort of division in (economic issues)."

Kosovo was placed under U.N. administration in 1999 following NATO air strikes that ended a Serb crackdown on separatist ethnic Albanians.

Stefan Lehne, an EU envoy who also mediated the talks, has said the Kosovo Albanians accepted sharing Kosovo's foreign debts with Serbia "on the basis of identifiable final beneficiary."

The multibillion-dollar international debt was inherited from the former six-republic Yugoslavia.

Both Serbia and Kosovo were integral parts of the former federation, and in the 1970s and 1980s, millions in international loans from the World Bank or the so-called London and Paris Clubs of investor countries, were allocated by former Yugoslav and Serbian governments for the development of Kosovo's industry and infrastructure.

Skender Hyseni, a key Albanian negotiator, said the two sides would now try to determine what amounts would have to be allotted to cover each portion of the debt. "We will accept any reasonable and identifiable debt."

However, ownership issues and privatization remained the key stumbling block.

Serbia still claims ownership of almost all major assets in Kosovo, including power plants, mines and a number of factories.

Many assets have been sold to private owners under the auspices of the Kosovo Trust Agency, a U.N. entity responsible for privatizing mainly inefficient and dilapidated enterprises.

Privatization is a sensitive issue in Kosovo. The process is complex because it is unclear whether Kosovo will become independent or remain part of Serbia, Lehne said.

Serbian negotiator Leon Kojen said the two sides had "little agreement" on the privatization and ownership issue "and as things stand now there's little hope for future agreement."

The Serbian government has bitterly opposed privatization in Kosovo claiming it was undertaken illegally and that lucrative assets were sold at rock-bottom prices.

"Kosovo's property belongs to its government and its people," Hyseni said. He also added that his delegation demanded compensation from Serbia for "victims of violence and injustice" -- a reference to the bloody 1998-99 conflict that left much of the province in ruins.

International mediators, ethnic Albanian and Serbian delegations welcomed the adoption of a protocol on the return of refugees, which was approved by the Kosovo government in Pristina on Wednesday. The document envisions the right of refugees to return to their homes in the province, but it also allows them to go to other places of their choice.

The sixth Vienna meeting followed five rounds of largely futile discussions on reforming Kosovo's local government and on allowing the province's Serb minority to run its affairs in areas where they form a majority. Last week, both sides agreed over the protection of Serbian Orthodox religious sites in the province.

U.N. mediators led by former Finnish President Martti Ahtisaari are expected to call in July for direct talks on the province's future.