NATO CHIEF Jaap de Hoop Scheffer failed to win over Serbian President Boris Tadic The current events in and around Serbia will significantly affect the way things turn out in South Eastern Europe over the coming years, and perhaps decades. They appear at first glance to be unrelated, but are in fact very closely related to one another. One of these events has already taken place – the signing of a Russo-Serbian energy agreement in Moscow in the presence of Russian President Vladimir Putin, Serbian President Boris Tadic and Serbian Prime Minister Vojislav Kostunica. With the act, Serbia has completely tied its future as regards energy to Russia, and has also facilitated her grand entry into other economic spheres. Serbia did so not only on account of energy, but also for political reasons, as Russia supports Serbia on the issue of Kosovo.

The second event, next Sunday, will be the second round of Serbia's presidential elections, whose outcome hangs in the balance more than ever before. In the first round, nationalist Tomislav Nikolic won more votes than did Tadic, and the two of them face off in round two, and bids are up as to whom the votes of the candidates that fell out of the race in the first round will go to. The key thing is to whom the votes of Veljo Ilic will go, a candidate who was backed in the first round by Prime Minister Kostunica. And while Tadic's Democratic Party, Kostunica's Democratic Party of Serbia and Ilic's New Serbia are together in the ruling coalition, Kostunica and Ilic do not for the moment want to give their support to Tadic, but are blackmailing him rather with what was to have taken place this Monday.

It had been announced that on 28 January, Serbia would sign a Stabilisation and Association Agreement with the European Union. A significant number of European Union member states backed the signature of the agreement, regardless of the fact that Serbia has not come even close to fulfilling all of the obligations she had been given, above all full cooperation with the International Criminal Tribunal in The Hague. These countries are prepared to make these kinds of concessions to Serbia for two key reasons.

One is to parry Russia's efforts to expand its influence to Serbia, where Russia has two great sympathisers, Kostunica and Nikolic, and where Russia has made some moves to win over Tadic too. But the second reason is more important still, and has to do with the fourth event that is to come.

And that concerns Kosovo's proclamation of independence. The key western nations have already decided that Kosovo is to be independent, and they are waiting for the right moment for the Kosovar Government to declare the country's independence, and these western countries – including the USA, Germany, France and Great Britain – will recognise Kosovo's independence. And while the leading people in Kosovo had announced that they would declare independence back in December, it was agreed that it should be put off until after the Serbian presidential elections, as it was clear to all that a declaration of Kosovar independence would inflame national passions in Serbia, which would lead to a sure victory for Nikolic at the polls, the breakdown of the current coalition and the creation of a pro-Russian ruling coalition of Nikolic and Kostunica.

That is why the leading western nations forged a plan to prevent that kind of development in spite of the Kosovar declaration of independence. According to the plan, the European Union was to have signed a Stabilisation and Association Agreement with Serbia in Brussels on 28 January, whereby the Union would have given Serbia a great largesse, and Serbia would have demonstrated her European intentions, thereby helping pro-European Boris Tadic at the polls and bolstering the position of his party in the ruling coalition.

But the signing was prevented by Kostunica. He has already blackmailed Tadic on several occasions, and has now presented him with a new ultimatum if he wants his support in the elections. Kostunica said that he would not oppose the signing of a Stabilisation and Association Agreement with the European Union under the condition that the agreement would automatically be annulled if the European Union sends its mission to Kosovo, a mission which is to take over from the United Nations the control of Kosovo and prepare it for full independence. The Agreement would, of course, also be null and void if the Union were to recognise the independence of Kosovo. Tadic has – for the moment – rejected the ultimatum, judging that the he stood to lose a great deal politically if he signed it. It is precisely on account of Kostunica's ultimatum that they have decided in the European Union to forego the signing of the agreement until the situation clears up.

The outcome of the election runoff will be very significant. If Nikolic wins, of course, the situation will be much clearer. If Tadic wins, we shall have to wait to see what the next steps will be, whether the agreement with the EU will be signed, and what will happen when Kosovo proclaims independence, which will be the key moment that will define Serbia's position.

Serbia is at a turning point, and that is why the development of the overall political process in South Eastern Europe is also at a turning point. Depending on the outcome, the policy of the western nations towards this region will have to be redefined. It has not been a successful one, which is evident in the fact that Russia managed to get the better of the European Union in this important European region.