Billion dollar Yugoslav aid agreed

Milosevic, centre, arrived at The Hague early on Friday

BRUSSELS, Belgium -- The international community has pledged $1.28 billion in aid to Yugoslavia -- more than the sum Belgrade said it needed to begin rebuilding the country.

The sum was agreed at a donors conference in Brussels on Friday, one day after Serbia handed over former Yugoslav President Slobodan Milosevic to the U.N. war crimes tribunal in The Hague.

Yugoslavia, suffering from 150-percent annual inflation, a foreign debt of $12 billion and a 50 percent jobless rate, went to Brussels asking for $1.25 billion for re-building projects.

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The World Bank and European Union have said $3.9 billion will be needed over the next four years to restructure Yugoslavia's economy and its debts. More than 30 nations are taking part in the conference.

The United States is pledging $181.6 million, matching a pledge from the European Commission.

Yugoslav deputy prime minister Miroljub Labus told reporters: "The symbolic value for us is that we are now back, fully back into the international community -- politically, diplomatically, and financially.

"That's very important for us. We decided to make some bold decisions and we've been just at the crossroads, whether we will have a fast or a slow track to Europe.

"We decided to take the fast track to Europe and to implement directly the international rules."

He told CNN he believes the extradition of Milosevic is sending a clear signal to the conference that Yugoslavia is determined to return stability to the country and to the region.

But not all in Yugoslavia are pleased that Milosevic has been sent to The Hague.

Yugoslav Prime Minister Zoran Zizic was outraged at the extradition -- which he called illegal and unconstitution -- and has reseigned from the federal government, taking the administration to the brink of collapse.

And about 6,000 Milosevic supporters gathered in Belgrade on Friday night chanting "treason" and calling for revolution.

Major donor nations had threatened to withhold their pledges if Milosevic was not turned over to The Hague. The extradition was also seen as being crucial to future pledges.

The initial funds will go to rebuilding infrastructure and paying the salaries of teachers and medical workers.

Yugoslavia had asked for $1.25 billion to help re-build the nation after 13 years of Milosevic's economic mismanagement, international sanctions and NATO's 78-day bombing campaign in 1999.

Johannes Linn of the World Bank said the organisation had pledged $150 million for this calendar year, adding this would form part of a $540 million package spread over a five-year period.

The EU, co-hosting Friday's meeting with the World Bank, said Milosevic's departure marked a turning point in the EU's relations with Yugoslavia.

"The European Commission is extremely pleased with what is happening," EU spokesman Gunnar Wiegand said.

Yugoslavia's infrastructure was badly damaged by the 1999 NATO bombing campaign and foreign investors have stayed clear.

Some fear social turmoil may explode because of fast deteriorating living standards if no fresh money is invested in the country.

Key areas for spending will be Yugoslavia's basic infrastructure -- water supply, roads, telecommunications, electric power generation -- as well as investments in health and education, officials said.