Serbia will not block Kosovo's path to joining international financial organisations, but it will never recognise the territory's independence, President Boris Tadic said on Thursday.

Tadic made his comments just days before Kosovo marks its first anniversary of independence from Serbia which Belgrade opposes in a region it sees as the cradle of its Orthodox Christianity.

"Serbia will not prevent commerce between people of Kosovo and the rest of the region, nor does Serbia want to stop the process of Kosovo's accession to some international financial bodies," Tadic said after meeting Olli Rehn, the European Union's Enlargement Commissioner.

"Serbia is seeking a realistic solution to the Kosovo issue, but is not ready to relinquish its territorial integrity. That is what I call a constructive approach," Tadic said.

The International Monetary Fund recognised Kosovo's secession from Serbia in July 2008 and said then that it would consider Kosovo's membership application as a sovereign Balkan state "in due course". Kosovo has also applied to the World Bank membership.

Kosovo, where a bloody 1998-1999 conflict culminated in a 78-day NATO bombing of the then Yugoslavia, is still patrolled by NATO peackeepers and EU law enforcement and judicial mission.

The United States, 22 EU members and a number of other countries have recognised it as an independent state. But others, including U.N. Security Council members Russia and China, have not.

EU BID

Tadic, a pro-Western politician, and Rehn discussed Serbia's bid to join the EU. Earlier this week in Brussels Rehn said Serbia should not rush to apply for EU membership before the bloc unfreezes the trade benefits.

"I have only presented a realistic analysis of the state of affairs," Rehn said.

He referred to Dutch opposition to unfreezing the trade deal until Serbia arrests and hands over former Bosnian Serb general Ratko Mladic to the Hague Tribunal.

Top Serbian politicians say the Balkan country will apply for candidate status in the first half of 2009 and invited an EU fact-finding mission to verify its cooperation with the U.N. war crimes court.

The EU commissioner said he and Tadic also reviewed the impact of the global crisis on Serbia and the region. Rehn said that the EU was considering macroeconomic support to Serbia's budget, but would not disclose details.

Serbia has asked the European Commission for 400 million euros in macro-financial assistance to bolster its budget, which faces falling fiscal revenue due to sharp economic slowdown.

The government has already won a $520 million stand-by loan from the International Monetary Fund and is hoping for up to $300 million from the World Bank to fix its finances in the year of economic crisis.