Before Serbia began its war against Bosnia-Herzegovina, the Yugoslav dinar was exchanged at 750 to the dollar. Today the exchange rate is 30 billion to the dollar. The wreck of the Yugoslav economy has come about, first, through the typical willingness of a military regime to subordinate prosperity to victory and, second, through economic sanctions imposed by all of Yugoslavia's trading partners. On Monday, however, the European Union recommended that these sanctions be suspended if the Serbs within Bosnia-Herzegovina accept an international peace plan. The recommendation, conditionally backed by the United States, awaits approval by the U.N. Security Council.
The Serbian economy can scarcely sink further than it has, and still the brutal siege of Sarajevo continues. But perhaps what the sanctions have always lacked is a reward to contrast with the punishment. Serbian propaganda has consistently told the Serbs that the world hates them simply because they are Serbs, not because of anything they have done. By promising an end to sanctions on non-military goods and services in exchange for the surrender of territory, the European Union could challenge this paranoid fantasy. No, the new message would go, it isn't who you are, it is only what you are doing.
The European Union should be careful, of course, not to end the sanctions at a stroke. That will not end the killing but only feed another Serbian delusion; namely, that the West, presented with a fait accompli , has no alternative but to cave in. On the contrary, the Serbs should be reminded that the price of aggression may be indefinite exclusion from the world economy. If the sanctions are to be lifted, let them be lifted on a clear quid pro quo basis, not in some misguided sense that "this has gone on long enough." It may well need to go on much longer.
The Bosnian government, despite its battlefield losses, has also failed to ratify the last-offered peace plan. For the reason why, one need look no further than Banja Luka, a Muslim town now in Serb hands. U.N. observers report all 16 mosques burned down in Banja Luka and Serb thugs roaming the Muslim areas at night robbing, raping and shooting at will. The Muslims know that this is what "peace" would mean for them, and so--with, literally, nowhere to go--they fight on. They have no choice.
The Serbs, trapped between this Muslim desperation on the one hand and Western economic sanctions on the other, have won an all but meaningless victory. A revision in the way Western sanctions have been imposed may just possibly help them out of the pit they have dug for themselves.