BELGRADE, Yugoslavia — Yugoslavia's new president pushed aside bastions of Slobodan Milosevic's power base with little resistance Monday as the country's prime minister and the Serbian legislature resigned.
The resignation of Yugoslav Prime Minister Momir Bulatovic came only hours after the government of Serbia, the larger of the two Yugoslav republics, also stepped down.
The moves constitute a sharp blow to Milosevic's efforts to keep a foothold in Yugoslavia's institutions. Bulatovic and the top leaders in the Serbian government were close Milosevic allies.
Meanwhile, the European Union on Monday lifted economic sanctions against Yugoslavia and offered $2 billion in aid to help rebuild the country.
Speaking outside an EU foreign ministers meeting in Luxembourg, German Foreign Minister Joschka Fischer said they agreed to end an oil embargo, imposed during the Kosovo war in 1999, as well as a ban on commercial flights to and from Serbia.
The EU left in effect sanctions that target Milosevic and his allies by freezing their assets abroad and banning them from traveling to the 15 EU nations. A ban on arms sales, imposed by the U.N. Security Council, also will remain in effect.
Serbia is Yugoslavia's largest republic, accounting for 90 percent of Yugoslavia's population of 10 million.
Pro-democracy leader Zoran Djindjic said that new elections for the Serbian legislature, which is separate from the Yugoslav parliament, will be held on Dec. 19.
Serbian lawmakers will formally announce the decision about the government and the election date at a session later Monday, Djindjic said.
"We have achieved an important step in trying to create a transitional government, to create conditions for free and fair elections," Djindjic said.
If the Serbian government were allowed to remain in place, it would have been in position to block many reforms desired by the new government of Yugoslav President Vojislav Kostunica.
Given the current popular wave of support for the new president, Kostunica is likely to win a strong majority in the republic's new parliament.
Serbia's president and parliament are elected separately from federal posts and were not involved in the contentious federal vote Sept. 24. Serbian Presi-
dent Milan Milutinovic and other Serbian government leaders were elected in 1998 to four-year terms.
Djindjic said that a transitional government consisting of economic experts and party leaders will be formed to replace the Serbian administration, which has been headed by Milosevic's staunch ally, Mirko Marjanovic.
Kostunica's allies have insisted that the pro-Milosevic authorities in Serbia had lost all legitimacy after a massive triumph by pro-democracy forces in elections last month.
Meanwhile, Yugoslavia's defense minister attempted Monday to rally opponents of the new government, issuing a last-ditch appeal to Milosevic's shaken supporters not to abandon the ousted leader.
Gen. Dragoljub Ojdanic said that the disunity among the Serbs is inciting the plans of our proven (foreign) enemies" to occupy the country. Milosevic's allies have consistently referred to Kostunica and his followers as Western lackeys bent on taking over the Serb state.
"If we continue like this, we won't get far . . . how can we save the people of Serbia, how can we prevent our extinction," Ojdanic said, indicating that if the pro-democracy forces prevail in the country, the Serbs would "disappear."
Ojdanic, a close Milosevic ally who has also been indicted for war crimes, has not formally recognized Kostunica as the new Yugoslav president and is not expected to keep his position in the new government. He has no direct control of the military, which has fallen under Kostunica's command.
Still, he retains influence among the military brass, and any call he might make to rally pro-Milosevic forces could be problematic for the new regime.
"Is the struggle for power more important that the fate of the nation?" Ojdanic said in a statement.
The military leadership — which consist mostly of Milosevic loyalists — has only grudgingly endorsed Kostunica as the new head of state. The top generals will likely all be replaced as part of a sweeping purge of Milosevic's supporters, which many pro-democracy activists and the pro-Western leadership of Montenegro — Yugoslavia's other republic — have long been demanding.
Yugoslavia was calm Monday, and there were no apparent signs of any trouble.
On Sunday, Montenegro's pro-Western President Milo Djukanovic and Djindjic agreed to fire all the top army generals, including Ojdanic. Kostunica, Djukanovic and the Serbian president comprise the Supreme Defense Council, which will decide on the changes in the next few days, the Montenegrin Vijesti daily said.
Although Kostunica was sworn in as Yugoslav president on Saturday, numerous hurdles still stand in his way before he can push through democratic reforms after 13 years of autocratic rule by Milosevic.
Meanwhile, a mob of angry workers attacked Radoman Bozovic, a close Milosevic aide and the director of a major trading corporation. He tried to flee from his car, but he was caught and beaten.
His bodyguards snatched him into a nearby building for safety. Later, Bozovic resigned as the head of the export-import company.
In the third largest Serbian city of Nis, workers stormed a state-run textile factory Nitex, demanding the Socialist management be fired. Vladimir Stambuk, a neo-communist official and dean of the School of Political Sciences at Belgrade University was fired Monday.