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INTERVIEW-Serbs must resolve Kosovo relations for EU talks in June

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* Serbia wants date for EU accession talks in June

* Taking softer line on former Kosovo province

* EU wants Serbian concessions on Kosovo

By Matt Robinson

BELGRADE, Jan 22 (Reuters) - Serbia expects to clinch a date for EU accession talks in June, the deputy prime minister said on Tuesday, telling Serbs the last remaining obstacle - relations with Kosovo - must be resolved peacefully to win entry.

Mired in recession and spurred by the prospect of wartime foe Croatia joining the European Union in July, Serbia's six-month-old government says accession talks are its priority, but the West says Belgrade must first come to terms with the 2008 secession of its former Kosovo province.

The past 10 days have seen some of the boldest statements to that effect by a Serbian government since NATO bombs wrested control of the majority-Albanian territory from Belgrade in 1999.

"All Serbs and citizens of Serbia are aware that things must be resolved, peacefully and through talks," Aleksandar Vucic, who is also defence minister, told Reuters on Tuesday.

"For Serbia it is ... perhaps of fateful significance to speed up our European integration and above all in June to get a date for the start of (accession) negotiations," said the towering 42-year-old leader of the Serbian Progressive Party, the biggest party in the ruling coalition.

That would be a milestone for the Balkan nation of 7.3 million people, an international pariah under Slobodan Milosevic for its role in the bloody collapse of federal Yugoslavia and a brutal counter-insurgency war in Kosovo.

It also represents a sea change for Vucic, a once virulently anti-Western nationalist during the wars of the 1990s who now says Serbia's best hope of prosperity lies in EU membership.

On July 1, Serbs will watch Croatia become the second former Yugoslav republic, following Slovenia in 2004, to join the 27-nation bloc.

Serbian accession is still years away, but negotiations would send a strong signal to much needed foreign investors. Unemployment in Serbia stands at around 25 percent, the average net monthly wage 380 euros ($500).

MUST FOCUS ON EU

"It (the EU talks) is important not just from a political perspective, but because of the development of the Serbian economy, better living standards, greater responsibility, a different system of values," Vucic said.

"I think it would represent a big defeat for Serbia if we don't get that date."

The EU says that for Serbia to make progress in its bid, it must establish functional relations with Kosovo - even without recognition - and drop its grip on a northern, Serb-populated pocket of Kosovo.

EU foreign policy chief Catherine Ashton is mediating talks.

Kosovo has been recognised by almost half the world, including the United States and 22 of the EU's 27 members, since it declared independence in 2008.

Serbia insists it will never join them, but in a parliamentary resolution adopted on Jan. 13 it offered to recognise the authority of Pristina over the entire territory of Kosovo, including the Serb-held north, in exchange for autonomy for the Serb minority.

Prime Minister Ivica Dacic, Vucic's coalition partner in government, told lawmakers that Serbian sovereignty over Kosovo was "practically non-existent".

Last week, Dacic held out the chance of a seat at the United Nations, a step tantamount to recognition.

Vucic said Belgrade should behave "rationally, moderately, seriously, responsibly and in line with what is possible".

"We are looking to lose as little as we must, and to get as much as we can, for our people and for our state," he said.

Critics question the government's resolve and the depth of Vucic's U-turn from ultranationalist to pro-Western Europhile.

But Vucic said he would not be swayed, even at the price of seeking a new mandate in early elections. Opinion polls suggest his party would win easily.

"The date (for EU talks) is what we must all focus and concentrate on, to finish that important job, and then we'll see the light at the end of the tunnel." ($1 = 0.7526 euros) (Editing by Alison Williams)

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