The significance of the sanctions became clear four months later when industrial production fell by 40 percent. The government did not change its policies and continued to spend as it had before the sanctions. To finance their efforts the government ran an increasing deficit and printed more money.

The economic crisis came to a climax by the middle of 1993 when inflation was at a rate of 4667 percent. The Yugoslavia government took action by ending its excessive printing of money, reduced the deficit, imposed taxes on the people, reissued new currency, and allowed products to be sold for their value. These changes improved the situation for a period in Yugoslavia.

The effects of the sanctions was seen during the peace talks in 1993 when the leaders agreed to support a peace plan to bring the war to an end, but the plan failed as the Assembly of the Republics of Srpska rejected it. This rejection of the peace plan brought increased economic sanctions. In 1994 Milosevic placed increasing pressure on the Bosnian Serbs. Milosevic imposed his own economic sanctions on Bosnia Herzegovina to pressure the Bosnian Serb leadership to accept the peace plan.

The imposition of sanction by the Federal Republic of Yugoslavia on the Bosnian Serbs in 1994 brought a partial lifting of sanctions on Yugoslavia by the UN. This weakened the Bosnian Serbs and helped in part the Croats to reclaim territories they were occupying.

It was clear that the sanctions added to the pre-existing economic difficulties in Yugoslavia caused the Serbian president Milosevic to give up his plan to creating a pan-Serbian homeland. Although the Federal Republic of Yugoslavia imposed sanctions on the Bosnian Serbs in 1994, the peace plan remained stalled.

The 1995 NATO intervention using air strikes brought the final surrender of the warring groups, but it was the only time in history that surrender was attained with only the use of air strikes.

The role of economic tools was seen during the Federal Republic of Yugoslavia election in the fall of 2000 when President Slobodan Milosevic was defeated by Vojislav Kostunica who had the support from the international community. It was clear that if Kostunica won the election there would be significant international aid for Yugoslavia’s reconstruction.

It was clear that international sanctions had an effect on the leaders during the war and that the promise of economic aid at the end of the war brought democratic change.

The role of economic tools was seen during the Federal Republic of Yugoslavia election in the fall of 2000 when President Slobodan Milosevic was defeated by Vojislav Kostunica who had the support from the international community. It was clear that if Kostunica won the election there would be significant international aid for Yugoslavia’s reconstruction.

It was clear that international sanctions had an effect on the leaders during the war and that the promise of economic aid at the end of the war brought democratic change.

Another act of defiance against the Serbians was the election of the Albanian writer Ibrahim Rugova as their president. The Albanians of Kosovo also set up their own government, but Serbia declared the election illegal.

The Serbian domination continued and in 1993 over thirty Albanians were arrested and charged by the Serbians with setting up an armed revolt. This Serbian action continued in 1995 when their court sentenced sixty-eight Albanians up to eight years in prison for establishing their own police force.

In 1996 the Serbians signed an agreement that allowed Albanian students to return to mainstream education. But, in the same year the secretive group called the Kosovo Liberation Army (KLA) began a campaign of bombing Serbian police and forces in their effort to win independence for Kosovo.

Throughout 1997 and into 1998 the KLA carried out bombings against Serb targets. These actions brought a reaction from the Serbs that included the killings and the burning of homes of many Albanians in the Drenica region of Kosovo.

Ibrahim Rugova, refused to compromise and demanded complete independence for Kosovo.

By April the international community, with the exception of Russia a historical ally of Serbia, agreed to impose economic sanctions against Serbia because of the ongoing violence.

Although there were peace talks taking place between the Serbian and the Albanian representatives in Kosovo the fighting continued with a massive Serbian offensive in August. The KLA stronghold of Junik fell on August 16.

The Serbian offensive continued in September with reports of civilians being massacred. This prompted a United Nations Security Council resolution demanding a ceasefire. By October 1998 NATO called on foreign nationals to leave Yugoslavia in preparations for air strikes. With this threat, Yugoslavia agreed to allow international diplomatic observers to enter the region to monitor the ceasefire.

The international monitors arrived late in 1998 and reported that both the Albanians and Serbs were violating the ceasefire agreement. In January 1999 evidence surfaced that the Serbian forces have carried out an execution of over forty Albanian civilians.

Responding to international outrage the leadership from Serbia, Kosovo, and the KLA agreed to have peace talks, but these negotiations failed in March 1999. The international observers left Kosovo and the Serbian forces moved rapidly by shelling the edges of Pristina, the capital of Kosovo on March 22.

On March 24, NATO began air strikes on Serb targets in Yugoslavia increasing in intensity each day. However the Serbian forces continued in their efforts committed one of the most extreme atrocities in the village of Meja on April 27. Between two hundred and three hundred men between the ages of 18 and 65 were taken from their families and systematically shot.

From March to June 1999 about 860,000 Albanian refugees left Kosovo and arrived in the neighbouring countries of Albania and Montenegro.

On 27 May 1999 the UN War Crimes Tribunal formally indicted Milosevic for crimes against humanity.

On June 3, the Serbian parliament agreed to a plan that was made by representatives from Russia, the European Union, and the United States. Serbia was to withdraw its troops from Kosovo and NATO bombing would end. NATO would provide a peacekeeping force. This plan was also approved by the UN Security Council.

The NATO bombing ended in Yugoslavia as the Serbian troops withdrew from Kosovo on June 10. Russian troops arrive in Kosovo on June 12 as NATO troops started to move into Kosovo from Macedonia. An agreement is reached to allow 3,000 Russian troops remain in Kosovo as peacekeepers under German, French, and American control.

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