Belgrade sees progress in dividing ex-Yugo gold

"We expect to resolve the problem tomorrow. The meeting of central bank governors will be held on Tuesday and we need a consensus. Our plan is to entirely resolve the problem," Yugoslav central bank governor Mladjan Dinkic told reporters.

Central bank governors from Yugoslavia, Croatia, Slovenia, Bosnia and Macedonia will meet on Tuesday at 0800 GMT in Belgrade, for the second time in a month, to discuss division of 46 tonnes of gold worth around $430 million held with the BIS.

The division of gold reserves would mark the first step towards settling an issue of who inherits what after a bloody breakup of the former communist Yugoslavia that started in 1991. Following political change in Belgrade after the fall of Slobodan Milosevic in October, new Yugoslav rulers led by President Vojislav Kostunica have dropped a "principle of continuity" that has blocked any solution to the asset row.

Yugoslav Deputy Prime Minister Miroljub Labus said he was optimistic about a quick progress on the BIS-held assets. "So far, everybody was saying that Yugoslavia was the one blocking the process. We have changed our policy and said that all successor states are equal. That change represents significant progress," Labus told reporters. "The ball is no longer in our court," he said.

Labus said the issue of dividing the gold reserves was not an easy one for Belgrade as it opened questions dating back to the start of the century. In 1918, the Kingdom of Serbia, together with Slovenia and Croatia, established the Kingdom of Yugoslavia and brought in an estimated 21 tonnes of its gold, which Milosevic's negotiators said they did not want to share with others.

But Labus said Belgrade would separate the issue of the inheritance related to the Kingdom of Yugoslavia from Tuesday's gold talks. "If there is goodwill, things can be resolved in the form of a general settlement. That is far from a perfect solution, no one will be entirely happy, but we have to move on," Labus said.

According to a formula determined by the International Monetary Fund (IMF), Yugoslavia would get 36.52% of the reserves, Croatia 28.49%, Slovenia 16.39%, Bosnia 13.2% and Macedonia 5.4% of the BIS-held gold.

The formula was used to divide an IMF quota of old Yugoslavia among its successor states.Macedonia and Bosnia said a month ago they would submit their proposal on how to divide the gold.Earlier this month, Macedonia decided to demand a higher share than the one allocated by the IMF, saying it was its "national interest".