The EU’s lack of action over the Yugoslav Civil War is surely the Union’s biggest embarrassment. “The EU has brought 50 years of peace to the continent”, they claim, always looking a bit shifty lest anyone remind them that they allowed a genocide to kick off on their doorstep, and then had to rely on America to help sort out the ongoing mess. Ever since, the drive for an EU rapid-reaction force has been stepping up. Now, with Kosovo on the brink of declaring independence from Serbia, the EU is on the brink of committing to a common military policy – a significant step, and one that could well have major implications.

Serbia’s recent elections may well have seen the less nutty option chosen, but it’s still not looking too promising. Because those elections were for the president, not the more powerful parliament – and so current Prime Minister Vojislav Kostunica remains the real power in Serbia. (If the name sounds familiar, that’s because he’s the guy who succeeded Milosevic as Yugoslav president after 2000’s peaceful revolution.)

Kostunica is sorely opposed to the independence of Kosovo – so much so that last week he blocked a cabinet meeting that was to set Serbia well and truly on the road towards European Union membership, a step Kostunica sees as all but guaranteeing that Kosovo goes its own way. EU aspirations may well exist, but not at the expense of what Kostunica and co see as Serbian territorial integrity. Nationalism trumps internationalism, it would seem.

Kostunica has the support of the ultra-nationalist Radical Party (the one whose leader is currently on trial for crimes against humanity in The Hague) and Milosevic’s old Socialist Party, so doesn’t really need the more moderate Democrats on board, even though he’s still their leader. Yesterday, however, he kissed and made up with his party, before making his intentions over Kosovo crystal clear:

“We have made a decision that the Serbian government will on Thursday, in advance, annul all acts that are against the law which concern a unilateral proclamation of the independence of this fictitious state on Serbian territory…

“We shall not allow such a creation to exist for a minute. It has to be legally annulled the moment it is illegally proclaimed by a leadership of convicted terrorists.”

So, what does this mean for Serbia’s EU hopes, now that every Serbian party is so explicitly opposed?

Well, the general consensus is that in uniting against Kosovo’s independence, Serbia has now decisively chosen to stay out of the EU – Serbia’s territorial integrity trumping its long-term economic development. Hence Monday’s “No alternative to Europe” pro-EU protests in Belgrade, led by precisely the same sort of people who started the anti-Milosevic movement back in the 90s, but – with no Serbian party prepared to accept the loss of Kosovo in exchange for EU integration – with rather less chance of success.

Kosovo’s independence is coming, of that there can be no doubt. But with Serbia refusing to acknowledge such a move and Kosovo itself potentially unable to survive on its own, the Balkans could well turn into another major flashpoint – and another massive challenge for the EU. What to do? Back Kosovo, and risk a return to civil war, or back Serbia, and risk a return to guerilla attacks?

So far, it’s all been Kosovo. Pretty much every EU member state has declared an intention to recognise the wannabe country’s independence when it comes, and has been working towards building up Kosovo’s economy and legal system in preparation. Now, it seems, the EU is even preparing to offer military support.

As well as being a significant symbolic moment for EU integration (an EU army long having been central to political integration among federalists – ever since it was first proposed by Winston Churchill – and a key fear of anti-EU types), this potentially could see another ongoing spat escalate yet further. Because Serbia has the support of Russia, which is on the record promising to block any United Nations recognition of Kosovo’s independence.

With Russia throwing her weight around to get Ukraine to do what she wants, and increasingly setting herself up in opposition to the EU, could the protesting Belgrade students have got it wrong?

For ex-communist countries with struggling economies trying to get over the problems of the Cold War years, Brussels has long seemed the obvious point of aspiration. The carrot of European Union membership has helped many in the drive towards democracy – and continues to help in many states, like Bosnia, Croatia, Moldova and Ukraine. The EU was seen as the best – perhaps only – hope for a speedy route to prosperity.

Now, however, Russia’s control of so much of Europe’s energy supplies, healthy arms industry and willingness to trade with even the dodgiest of dodgy regimes has given an alternative. Europe’s last dictatorship, Belarus, has happily survived for nearly two decades thanks to Russian support. If Belarus can do it, why not Serbia?

It may not seem like much of a choice to sensible Westerners – the EU route seems sure to offer a far better standard of living, as well as all the benefits of human rights and democracy. But Serbia is, lest we forget, a country filled with people who were happily murdering each other in their thousands only a decade ago…

Anything could happen – and whatever does, the EU is going to be right at the heart, trying to mediate and, at the same time, prove that it is truly a world power. Failure is not an option, for that would be the final nail in the coffin of an EU working as one, the final proof – after failure to act in the 90s and failure to agree a common stance on Iraq and Afghanistan – that when action is needed, the EU can only dither.