Panic Takes the Helm in Yugoslavia : Swearing in: New prime minister pledges effort for peace. Corporate empire he left behind in Costa Mesa delays replacing him.

A Costa Mesa businessman became Yugoslavia’s prime minister Tuesday, promising to do his utmost to reach an immediate cease-fire in Bosnia-Herzegovina.

Milan Panic said that lasting peace in Bosnia and stability in other Yugoslav regions are a necessity for solving the Yugoslav crisis.

“My government will guarantee to the international community that it will do everything in order to turn this region into a factor of peace in Europe,” he told Yugoslavia’s Parliament. “There is no idea worth killing for at the end of the 20th Century.”

And in a startling departure from previous official Belgrade statements, he said that Serbs have sided with Croats against Muslims in the Bosnian war. Since fighting in Bosnia broke out three months ago, Belgrade officials have insisted that Muslims and Croats have formed a coalition against Bosnian Serbs.

Panic, 62, a Yugoslav-born millionaire who left his homeland for California in 1956 with $20 in his pocket, has played up his image as a successful U.S. businessman who can cut through Yugoslavia’s Communist-style bureaucracy.

He has pledged to revitalize the moribund economy, now being bled by 6-week-old U.N. trade sanctions imposed to punish Serbian-dominated Yugoslavia’s backing of Serb fighters in Bosnia. And he has promised a free press and free elections by year’s end.

But beyond generalities and a warning to Serbian President Slobodan Milosevic--”God help him if he gets in my way”--Panic has offered no specific solutions.

The powerful Milosevic is most associated with the backing of Serb fighters in Bosnia.

The authoritative Borba daily and associates of Milosevic have said that Milosevic is thinking of quitting. It is not clear, however, whether he would attempt to keep the levers of power informally even if he did resign.

Asked about Milosevic, Panic said: “I’ll respect his powers as long as he respects mine.”

Speaking to reporters Tuesday with Yugoslav President Dobrica Cosic, Panic said he is going to work for peace with “everything I’ve got.”

“Lasting peace in Bosnia and stability in other regions are the precondition for solving the entire Yugoslav crisis,” he added. “The new federal government will do its utmost to have all sides immediately cease fire.”

Cosic and Panic said the new Yugoslavia would be willing to recognize new states born from the former Yugoslavia but only if there were human rights guarantees for minorities and negotiations on borders.

Panic was initially reluctant to become prime minister when approached by Milosevic allies, who were believed to be looking for a way to defuse Western and especially U.S. criticism.

As prime minister, Panic will control the army and foreign and economic policy--if he can curb Milosevic.

Meanwhile, the corporate empire Panic left behind, ICN Pharmaceuticals Inc. and three subsidiaries, is not expected to select a successor as chairman of the board and chief executive officer this week, said company spokesman Paul Knopick.

Panic’s replacement will be announced after a series of meetings by the four boards of directors, Knopick said.

It was not known Tuesday whether Panic would be succeeded by one or more executives. In addition to his chairman and chief executive duties for all four entities, he also serves as president of ICN and its subsidiary ICN Biomed Inc. The other companies are Viratek Inc. and SPI Pharmaceuticals Inc.

Jack Sholl, ICN vice president for public relations, who was in Belgrade on Tuesday attending Panic’s swearing-in ceremony, had said on July 1 that an unnamed successor was already in the works, and would be announced on the day Panic officially took office.

There was no clear reason, Knopick said, why the $1.1-billion conglomerate was holding off on its decision, considering that it had a succession plan in place well before Panic was offered the prime minister spot.

Two prominent candidates, however, appeared to be ICN co-founder Roberts A. Smith and Adam Jerney, president and chief operating officer of SPI Pharmaceuticals, ICN’s chief subsidiary.