Serbia Wins $500 Million Russia Loan, Kosovo Backing

Russia on Wednesday vowed to extend economically struggling Serbia a $500-million loan while reasserting support for its ally's continuing refusal to recognize the independence of Kosovo.

Serbian Prime Minister Ivica Dacic won a promise of the quick disbursement of a $300-million (230-million-euro) loan that would help cover Belgrade's budget shortfall.

A part of the money has been earmarked for repairing and expanding the Balkan nation's rail network with the help of Russian companies.

Russian Prime Minister Dmitry Medvedev said Moscow would loan Belgrade an additional $200 million once it agrees to a stabilization program with the International Monetary Fund.

Medvedev said Moscow would always back Belgrade because of the two allies' close religious and cultural ties.

He also noted that it was up to Serbia itself to negotiate quicker with Brussels on a transition for Kosovo under which Belgrade would finally recognize the mostly Muslim Kosovo's independence.

"We will always support the position formed by the Serbian leadership," news agencies quoted Medvedev as telling Dacic.

Medvedev added that it was unfair for the European Union to expect Moscow to convince Belgrade to recognize Kosovo -- a republic whose 2008 declaration of independence is now acknowledged by nearly 100 states but not Russia.

"It is not us who should move this process forward but Serbia itself," said Medvedev.

"Sometimes, they (the European Union) expect more of us than of Serbia itself. This is wrong. It is you who should be deciding what position to take."

Dacic for his part said Belgrade would continue negotiations on the issue but never recognize Kosovo's independence without a broader agreement that extends more rights to ethnic Serbs living in the region.

"We want to continue dialogue (with Kosovo) and find a sustainable solution," said Dacic.

"But of course, we will never agree to Kosovo's unilateral declaration of independence."

The meeting came two days after Serbia once again rejected an EU-brokered proposal for easing Kosovo's transition.

Belgrade continues to insists on broader rights for ethnic Slavs who live in regions of the republic in which Serbs make up either a majority or represent a significant minority.

These demands include the right for Serbs to police themselves.

Moscow on Wednesday also agreed to extend a $300-million loan to Serbia that will be primarily spent on rebuilding an extending the nation's rail network.

Dacic also met Russian President Vladimir Putin for informal talks.