Radical Serbs Oust Panic as Prime Minister

Encouraged by their recent electoral triumph, ultranationalist Serbian radicals voted Tuesday to oust Milan Panic from the office of federal prime minister.

The no-confidence motion against the moderate Panic easily passed both houses of the federal Parliament, spurred on by the wave of extremism that has washed over the remains of Yugoslavia since a Dec. 20 election defeated proponents of peace and reform.

Panic was closeted with advisers late Tuesday and made no immediate comment on his ouster. An aide, reached at the prime minister’s Belgrade residence, said Panic will make an announcement this morning.

The vote aimed at forcing Panic’s resignation was the third called by Serbian nationalists in the last four months, the two previous moves having failed because deputies from the republic of Montenegro came to the prime minister’s rescue.

But in the wake of elections that strengthened the hand of the hard-line nationalists’ rule in what is left of Yugoslavia, the Montenegrins closed ranks with their longtime Serbian allies to deal Panic a crushing if mostly symbolic defeat.

Panic, an Orange County millionaire, had already hinted he would resign as head of the virtually powerless federal government following his loss to Serbian strongman Slobodan Milosevic after a hard-fought campaign for the republic presidency.

Western diplomats described the vote of no-confidence--proposed by a militant deputy accused of war crimes--as an attempt to complete the humiliation of Panic and the conciliatory course he proposed to spare the rump Yugoslavia a future of isolation and despair.

Thunderous applause broke out in the upper parliamentary chamber when the Montenegrins withdrew their backing of Panic and voted overwhelmingly to unseat him.

The political swing toward nationalist extremism that gave Milosevic a wide margin of victory 10 days ago was reflected in the no-confidence vote. The lower house, dominated by Milosevic’s Serbian Socialist Party and their Serbian Radical allies, voted 95-2 against Panic, with 12 deputies abstaining. The upper house, evenly split between the two remaining Yugoslav republics, Serbia and Montenegro, voted 30-5 with one abstention to remove the prime minister.

“It is bizarre to proceed with it at this time. It doesn’t change the status of the Panic government,” one Belgrade-based diplomat said of the no-confidence motion. “It smacks of efforts to try to humiliate Panic, to limit his political appeal and further damage him politically before the new Assembly convenes.”

Despite the vote, Panic and his federal Cabinet were expected to remain in power in a caretaker status until a new slate of ministers is appointed by the Parliament. The new ministers would take office some time next month. Western diplomats also speculated that Serbian Radical Party leader Vojislav Seselj called for the vote against Panic as a means of forcing the fence-sitting Montenegrins to choose sides.

Montenegrin President Momir Bulatovic and his Democratic Socialist Party supported Panic’s unsuccessful bid to replace Milosevic.

Parliamentary sources said a Montenegrin official, Svetozar Marovic, is likely to be named prime minister by the new regime in an effort to appease Montenegro, the republic that makes up only 5% of the population of Yugoslavia. But other deputies indicated that Panic would be replaced by Deputy Prime Minister Radoje Kontic, also from Montenegro.

Seselj, singled out by Secretary of State Lawrence S. Eagleburger last week as likely to be brought before a war crimes tribunal, had warned a day earlier that Panic might be arrested if he remains in Belgrade. “We are charging him with . . . embezzling state funds and inviting foreign powers to meddle in our affairs,” Seselj told Belgrade reporters. “I expect Panic to end up in prison.”

During the election campaign, Seselj repeatedly referred to Panic as a traitor to Serbian national interests because of the prime minister’s support for a compromise to end the 18-month-old war.

Panic, founder of a Costa Mesa-based pharmaceuticals company who turned 63 on election day, returned to his native Yugoslavia in July in a much-publicized quest to bring peace to Bosnia-Herzegovina and turn the attention of his fellow Serbs to repairing their shattered economy.

But the tenuous alliance with Milosevic that brought him to Belgrade soon collapsed as Panic, a naturalized American citizen, attempted to marshal the poorly organized, fractious Yugoslav opposition into a concerted campaign to break the nationalists’ spell. Milosevic retained control over the most influential media, an advantage believed to have been decisive in returning him to office.

The victory of ultranationalist forces and their clear intention to continue support for Serbian rebels in Bosnia and Croatia have greatly increased the likelihood of foreign military intervention to prevent the Balkan crisis from spreading. Milosevic, who rose to power in 1987 by stoking up a nationalist fever over the medieval Serbian heartland in Kosovo province, has deployed tens of thousands of heavily armed Serbian police to impose virtual martial law over the population, which is predominantly Albanian.

The heavy police presence has instilled fears that the reviled Serbian practice of “ethnic cleansing”--the ouster of non-Serbs from Serb-controlled areas--will soon spread to Kosovo. Analysts have said that may provoke an even bloodier conflict than the one that has killed tens of thousands in Croatia and Bosnia since the Yugoslav federation began its violent breakup in 1991.

In Washington, the Bush Administration declined Tuesday to comment on Panic’s parliamentary ouster. But State Department spokesman Joseph Snyder denounced the recent Serbian elections, saying in a statement that they were unfair. He warned that Serbia will face “increasing pressure from sanctions and other steps” if it does not change its policies.

Times special correspondent Silber reported from Belgrade and Times staff writer Williams from Vienna. Times staff writer Art Pine in Washington contributed to this report.