By 1990 Yugoslavia was plagued with many problems before its breakup. Foreign debt, inflation, and unemployment created a troublesome atmosphere. More important were the strong nationalist feelings and political problems that lead to the crisis in Yugoslavia. In March and April of 1990 Slovenia and Croatia held their first multi-party elections in almost 50 years. The Communist reformers lost to parties favoring national sovereignty within Yugoslavia. Later in the year similar parties won election in Macedonia and Bosnia-Herzegovina. President Izetbegovic of Bosnia-Herzegovina and President Gligorov of Macedonia were looking for a democratic way to keep Yugoslavia a decentralized and reorganized union of states. President Izetbegovic and President Gligorov were concerned about Slovenia and Croatia leaving the Yugoslav federation because they would be left with only President Milosevic of Serbia. Milosevic rejected ideas for a looser federation of Yugoslav states.
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According to the post-Tito Constitution , the federal presidency, the highest executive position, was to be chosen each year by a different Yugoslav state. In 1991 it was Croatia's turn at the federal presidency. They selected Stipe Mesic, a noncommunist and moderate. The Serb leaders blocked the election. The Croatians, authorized by the Croat Parliament, the Sabor, responded by declaring their independence at the end of June 1991. The Sabor created a democratic constitution that guaranteed many civil liberties to all its citizens including the Serbs and other minorities within Croatian borders. It provided the rights for minorities to have their own schools which could teach their own language. In May 1992 the United Nations and the European Community (EC) pushed the Croatian government to go even further by guaranteeing districts self-government where Serbs were the majority. During the spring negotiations of 1991, guerrillas, aided by President Milosevic and Serb leaders, invaded every Serb majority district or village in Croatia and armed villagers who then violently invaded non-Serb majority districts and villages. The Serbs also controlled the federal government's army.
Macedonia declared its independence on September 8, 1991. The republics of Serbia and Montenegro proclaimed a Federation Republic of Yugoslavia on April 17, 1992. Other countries like the United States, France, and Britain maintained that Yugoslavia should be unified and not divided, therefore, they did not acknowledge the declarations of independence. The German government did acknowledge Slovenia and Croatia as independent and regarded the Serbs as aggressors. Throughout 1992 there were many different peace negotiations offered to President Milosevic. Milosevic found the solutions offered by the UN and EC as unacceptable. Croatia, therefore, organized a military action to recapture control over Serb occupied areas.
There was fierce fighting between Bosnian-Muslims, Serbs, and Croats. The Serbs massacred thousands of Bosnian-Muslims and engaged in ethnic cleansing. The capital, Sarajevo, was surrounded and besieged by Bosnian- Serb forces. A cease-fire was reached February 23, 1994. On March 18, 1994, an accord was signed to create a Muslim-Croat confederation. Fighting continued in 1995 but the balance of power shifted toward the Muslim-Croat alliance. Massive air strikes at Bosnian-Serb targets on August 30, 1995, brought about a new round of peace talks and the siege of Sarajevo ended on September 15, 1995. These new talks created an agreement to create autonomous regions within Bosnia. Tens of thousands of Bosnian-Muslims and Croats were forced to leave their homes to avoid the aggressive attacks of the Serbs. Largely, the military actions of the Bosnians and Croatians were defensive. They were not involved in the systematic ethnic cleansing as were the Serbs. By 1995 the United Nations, Russia, Western European governments, and the United States recognized the independent states of Croatia and Bosnia-Herzegovina. The international community backed by the power of NATO and the UN assisted Bosnia in achieving a democratic and peaceful transition to independence with a state constitution that allowed rights to its minorities also in order to provide a good example to the Serbs. The UN singled out Serbia as the aggressor in the Bosnian conflict and installed economic sanctions on Serbia.
A peace agreement initialed in Dayton, Ohio on November 21, 1995 was signed in Paris on December 14, 1995 by leaders of Bosnia, Croatia, and Serbia. About 10,000 NATO troops moved in to police the accord. By August 1996, 45,000 troops remained. Meanwhile a UN tribunal began bringing charges against suspected war criminals. Elections were held on September 14, 1996, for a three-person collective presidency, for seats in a federal parliament, and for regional offices. The UN lifted sanctions against the Serbs on October 1, 1996, after elections were held in Bosnia.