Policy Towards Serbia
In mid-1992, the UN responded to Serbian offensives in the former Yugoslav republic of Bosnia and Herzegovina by declaring a full embargo on trade with Serbia by all member nations. The sanctions placed Greece, which had recognized the independence of Bosnia and Herzegovina shortly after its declaration in 1992, in a difficult position. Serbia was an important trading partner with strong religious and historical ties to Greece, and Serbia had supported the Greek position on the FYROM issue. Beginning in 1992, the Mitsotakis and Papandreou governments, fearing that the Bosnian war would spread in a direction that would involve Turkey, Albania, and Greece, undertook a long but fruitless series of peace negotiations with Serbia's president, Slobodan Milosevic, Bosnian Serb leader Radovan Karadzic, and the Bosnian government. Meanwhile, food, oil, and arms were reported moving from Greece into Serbia in violation of the UN embargo. Before, during, and after its 1994 presidency of the EU, Greece was the only EU nation to back the Serbian position that Serbian forces had entered Bosnian territory in response to Bosnian provocations. In early 1994, Greece incurred the displeasure of its European allies by voting against NATO air strikes on Serbian positions. Greece also refused the use of its NATO air bases at Preveza on the Ionian Sea for such attacks and refused to supply Greek troops to the UN peacekeeping mission in Bosnia. In NATO, Greece's position was diametrically opposed to that of Turkey, which supported the Bosnian Muslims.
In December 1994, after official talks with Milosevic in Athens, Papandreou reiterated that the positions of Greece and Serbia on the Bosnia issue were virtually identical. A Milosevic proposal for a confederation of Greece and Serbia with FYROM failed to gain support among any faction in Greece.