Transfer of Presidency to Croatia Scares Serbs : Yugoslavia: New leader will have to perform a tense balancing act. Failure could mean civil war.

BELGRADE, Yugoslavia — As Yugoslavia founders in the turbulent seas of ethnic unrest, it would seem to make little difference which republic is at the helm when the ship of state goes under.

But this week’s transfer of the federal presidency from Serbia to rival Croatia has traumatized Serbian militants and raised fears that further violence may be instigated to prevent an orderly rotation.

Croatia’s Stipe Mesic, who takes over as president Wednesday, represents a republic that has declared its intention to secede from Yugoslavia, thereby dissolving the very federation he will be charged with protecting.

That angers Serbia, the largest of Yugoslavia’s six republics, which is committed to a single state uniting all 9 million Serbs and is frustrated by the army’s refusal to impose martial law to prevent secessions.

If Mesic succeeds in assuming power from his Serbian counterpart amid the persistent threat of a military coup, he will have to maneuver the republics through a tense end-game in which failure could result in civil war.

Mesic will be the first non-Communist to serve as head of state since World War II. With two republics hurtling toward independence, he may well be the last to preside over what is today known as Yugoslavia.

“If you consider Yugoslavia at this stage as a bankrupt company, there is a need for a final managing director to finish off the job and see how best to realize the potential of different parts of the company,” said Hido Biscevic, editor of Croatia’s main daily newspaper, Vjesnik.

The federation stitched together in 1918 as the kingdom of Serbs, Croats and Slovenes does appear headed for liquidation. Slovenia plans to break its few remaining bonds to the other republics with formal secession June 26. Croatia has vowed to follow.

The Croatian leadership in Zagreb plans a referendum Sunday, and at least 70% of the republic’s 5 million citizens are expected to vote for independence.

But Serbia’s Communist strongman, President Slobodan Milosevic, has made clear during months of political brinkmanship that he would rather see Yugoslavia thrown into a devastating fratricide than allow Croatia’s secession to divide the 600,000-strong Serbian minority there from its homeland.

Serbian Communist Borisav Jovic, the current Yugoslav president and staunch Milosevic ally, has used his term as nominal commander of the armed forces to position the military between the republics in what amounts to a no-win situation.

Soldiers aren’t getting paid because the inter-republic feuds have slashed funds for the federal budget. In a desperate attempt to impose order and seize republic coffers, some hard-line generals have been pressing for martial law.

That would suit the Serbian leadership, which believes it could manipulate the army, whose officers corps is 70% Serbian and still loyal to the Communist doctrine that gives it good wages and privileges.

But others in the military leadership fear that the multinational rank and file would immediately break down along ethnic lines if ordered to use force against citizens.

Jovic and Milosevic tried to force a military coup in March by destroying the presidency but were forced to restore the ruling body when the army balked at the ploy to impose Serbian authority over the other republics.

While that volatile confrontation indicated that the army was unwilling to do Serbia’s bidding, political and economic conditions have worsened to such a degree over the last two months that some fear the military now may be desperate enough to try to take over.

The army last week was ordered to keep the peace and empowered to disarm civilians and reservists. But the presidential order is virtually unenforceable and continues to put soldiers in the middle of the Serb-Croat conflict.

Mesic signed the accord on behalf of Croatia, but republic President Franjo Tudjman announced a few hours later that he expects the army to work in tandem with his police and said reservists will continue to carry weapons. He also refused to demobilize armed militia units.

Milan Martic, police chief in the predominantly Serbian-populated Krajina region, said Serbs will turn in weapons only after Croats do so.

Mesic, a lawyer and political moderate, sees the change in leadership as a chance to restore legitimacy to the office that has been manipulated and discredited during the past year. But his insistence that Croatian police forces be allowed to restore order in their own republic may be seen as threatening to both Serbia and the army.

Jovic has repeatedly sent in federal troops to quell fighting between Croatian police and Serbian rebels.

Mesic complains that the soldiers are in effect protecting outlaws and has vowed to remove the army from his republic’s security matters as soon as the current peace accord expires.

“Croatia has not capitulated nor will it capitulate,” Mesic declared in a radio interview over the weekend. “If the army does not reintroduce the rule of law in these areas within one month, the Croatian Interior Ministry will reintroduce such rule with repressive measures.”

Mesic’s turn as chief of the rotating presidency strips Serbia of the ability to use the army to its own advantage.

While the presidency as an eight-member collective has often been deadlocked, its chairman wields considerable influence because the position is the only surviving organ of federal power, apart from the army.

The federal government headed by Prime Minister Ante Markovic has seen its authority erode as the republics refuse to adhere to strict economic policies aimed at recovery.

The once-omnipotent Communist Party broke up two years ago when the republics called multi-party elections, with only Serbia and Montenegro reelecting Communist leaders.

The impending power shift from Serbia to Croatia has made many Croats fearful of a last-minute provocation that would bring about a state of emergency, undermining presidential power by putting the army in charge.

Under the complex system of leadership bequeathed by Yugoslavia’s late Communist leader, Josip Broz Tito, the head of state rotates among the six republics and two provinces, with each representative serving for a year beginning May 15.