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U.S. plans loan package to bolster Plavsic

Bosnian Serb aid August 27, 1997
Web posted at: 5:03 p.m. EDT (2103 GMT)

WASHINGTON (CNN) -- The United States will include Bosnian Serb businesses in a loan program to private industry, a State Department official told CNN Wednesday.

The loan was directed toward private businesses in and around Brcko and Banja Luka, the powerbase of democratically elected Bosnian Serb President Biljana Plavsic.

U.S. officials said the program was intended to shore up political support for Plavsic, who has been involved in a power struggle with her predecessor, indicted war crimes suspect Radovan Karadzic.

Plavsic has repeatedly accused Karadzic of corruption and of trying to oust her. Karadzic is still believed to pull the strings behind the scenes, even though he officially stepped down from active politics and promised to stay out of it in an agreement with international mediators.

U.S. officials repeatedly said there would be rewards for those Bosnian Serbs who supported the 1995 Dayton peace accord, which was co-signed by Yugoslav President Slobodan Milosevic, the chief patron of Bosnian Serbs.

To date, the United States has provided $60 million in loans to Bosnian private businesses, almost all of it in the Muslim-Croat federation.

Robert Gelbard, a U.S. State Department envoy, is due in the region this week and is expected to hold talks with Milosevic, who armed and directed Bosnian Serbs during the war that broke apart the former Yugoslavia.

Milosevic has made no public statement about the Plavsic-Karadzic power struggle, but a few days ago U.S. Secretary of State Madeleine Albright telephoned Milosevic and reportedly told him to support those Bosnian Serbs who in turn supported the Dayton accord.

The inner-Serb power struggle, which has more recently focused on media control, intensified Wednesday in northern Bosnia.

A spokesman for the NATO-led international stabilization force known as SFOR said that his troops fired warning shots after police loyal to Karadzic tried to ram a foot patrol.

The SFOR spokesman rejected pro-Karadzic media reports which said the troops had fired at the police when they seized a television tower in the northern town of Doboj.

Observers say the incident is likely to further strain relations between Karadzic supporters and the peace force.

NATO and other international organizations overseeing the tenuous peace in Bosnia have taken Plavsic's side in light of her pledge to uphold and respect the Balkan peace accord.


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