-Caveat Lector-

Banker Worked On Kosovo Diplomacy

By TONY CZUCZKA
.c The Associated Press


BONN, Germany (AP) - An investment banker with ties to Russia went on a
secret mission to Belgrade in May as part of diplomatic efforts to persuade
Yugoslav President Slobodan Milosevic to accept a peace plan for Kosovo, a
German official said Wednesday.

The London banker, Peter Castenfelt, met Milosevic with the consent of Russia
and Germany shortly before Yugoslavia agreed June 3 to the peace plan
presented by official mediators, according to two men involved in the
diplomatic effort.

One of those two, German Chancellor Gerhard Schroeder's foreign policy
adviser, Michael Steiner, said he met Castenfelt before and after the
banker's seven-day trip to Belgrade starting May 29. Steiner said Castenfelt
had only a limited impact and had no mandate to negotiate peace terms.

``It would be naive to believe that Milosevic only needed new explanations in
order for him to say: Now I'm ready to make peace,'' Steiner said Wednesday.

Two main factors persuaded the Yugoslav leader to give in, Steiner said.

``One was the military pressure, which increased sharply in the final
phase,'' he said. ``The second element was that Moscow signaled very clearly
that (Milosevic) could not count on military or political support.''

A second man involved in the diplomatic effort, Karl Kaiser, said Wednesday
that the mission helped secure the agreement reached by Milosevic and Martti
Ahtisaari, the Finnish president and European Union peace envoy.

Kaiser was a foreign policy adviser to Schroeder during his election
campaign. He said he introduced Castenfelt to Steiner and Wolfgang Ischinger,
a senior German Foreign Ministry official.

Castenfelt has acted as an intermediary between the International Monetary
Fund and Russia in the past, Kaiser said. His connection to Russia helped him
in his meeting with the Yugoslav president, Kaiser said.

``Castenfelt helped explain positions that Milosevic subsequently agreed
to,'' he said. ``We paved the way.''

Castenfelt tried to put peace conditions set out by Western powers and Russia
in a positive light for Milosevic, Kaiser said.

He stressed, for example, that the international force being sent to Kosovo
was under a United Nations mandate, something Milosevic had demanded, Kaiser
said.

Castenfelt, who reportedly met Milosevic once during his stay, also discussed
efforts by diplomats to coordinate crucial details about the pullout of
Yugoslav forces from Kosovo, the end of NATO's air war and the arrival of the
international peacekeeping force, Kaiser said.

Castenfelt could not be reached for comment on his reported diplomatic
efforts.

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