PRISTINA, Feb 19 (Reuters) - Kosovo's caretaker prime minister, Hashim Thaci, signed a coalition deal with smaller parties on Feb.19 to form a government which is expected to start long-awaited talks on its relations with Serbia.
Thaci’s Democratic Party of Kosovo (PDK) formed the coalition with the New Kosovo Alliance (AKR) party and parties representing ethnic minorities two months after an election.
PDK, which won a third of votes, turned to the fifth largest party and the ethnic minority parties after three other leading parties said they would not govern the country of 2 million people with Thaci.
The parties have agreed that Thaci should serve another term as the prime minister and the AKR leader, Behgjet Pacolli, a controversial Kosovo-born but Swiss-based construction millionaire, be the new Kosovo president.
Thaci said the coalition was "for a new Kosovo, for its development, democratic reforms, building a multi-ethnic society, creating new jobs and a European perspective".
The first parliament session is due on Monday but it is unclear if the cabinet and president will be voted in then.
The political stalemate has already delayed the start of Kosovo’s talks with Serbia, which does not recognise its independence but has agreed to discuss practicalities of coexistence, such as cross-border trade and transport.
Thaci said the cabinet’s first decision would be to start a dialogue with Serbia, which withdrew its forces from Kosovo in 1999 after a NATO bombing campaign to stop them attacking civilians during an insurgency by Kosovo ethnic Albanian majority.
Other steps the cabinet must take urgently include a drafting of 2011 budget and restart of the privatisation of state-owned firms.
"From now we are ready to act," said Pacolli, who is set to take the mainly ceremonial presidential role. "We have the force, energy, wisdom and the great will to act."
Thaci and the image of Kosovo, which marked its third independence anniversary on Thursday, was badly hurt by a Council of Europe report accusing members of the ex-Kosovo Liberation Army loyal to Thaci of abductions in Kosovo, gun- and drug-running and trafficking in organs from ethnic Serbs.
The European Union’s justice mission in Kosovo said it had begun a preliminary investigation into the allegations.
