AS negotiations between Serbs and Croats appear to be moving in a positive direction, Croatian President Franjo Tudjman has decided to make a political move that may derail the peace process.
On May 30, Croatian Statehood Day, Mr. Tudjman will revive the ``kuna'' - a currency used during the years of 1941-45 when Croatia was a Nazi puppet state under the rule of Ante Pavelic and his Ustashe regime.
During that time, hundreds of thousands of Serbs, Jews, and Gypsies were killed in a campaign to create an ethnically pure state.
Resurrecting the kuna, opponents say, is an insult to those victims and just one of a series of gestures Mr. Tudjman has made regarding Croatia's ``dark period'' in history that has underscored his fundamental intolerance and insensitivity toward Croatia's Serbs and Jews.
``It's just one more thing Croatia will have to defend itself from again,'' says Slavko Goldstein, leader of the tiny Croatian Jewish community. ``Like Italy and Germany, it will constantly have to answer questions about its past.''
Tudjman was criticized by the Jewish community for questioning the number of Jews killed during World War II and for making anti-Semitic remarks in a book he published in 1988, ``Wastelands of Historical Reality.''
He has since apologized to the Jewish community, but the criticism has been reinforced by the renaming of streets, schools, and squares dedicated to the memory of anti-fascist fighters.
When Croatia first declared independence in June 1991, the symbol of the Croatian checkerboard crest, omnipresent on every uniform and building during the Ustashe state, was placed on Croatia's new flag.
Tudjman argued at the time that the checkerboard dates back to the Middle Ages, has long been a symbol of Croatian statehood, and should not be abandoned simply because the Ustashe adopted it as well.
Its red and white squares were symbolically reversed and the appearance slightly changed to signify a new Croatia. But minority Serbs say it was a token gesture that did not go far enough to allay fears of the reemergence of the Croatian Ustashe.
The older version of the crest, along with other Ustashe paraphernalia, is available in kiosks all over Croatia.
Tudjman's support of Bosnian Croat forces (HVO), who fought against Muslims to carve out their own ethnic ministate in Bosnia, has also fueled the fire. The HVO make no secret of their admiration for Croatia's role during World War II, and soldiers frequently wear the Ustashe ``U'' - the Croatian equivalent of the German swastika.
Tudjman has publicly denounced the Ustashe, and says he fought along with Marshal Tito's Partisan resistance movement during World War II against the Croatian Ustashe.
But the gestures have left their mark. Goldstein, who saw nearly all his friends and relatives perish in World War II - along with 80 percent of Croatia's Jews, believes Tudjman's motives are more likely an attempt to pacify right-wingers at home and abroad who have supported Croatia's fight for independence.
The resurrection of the kuna inspires more perplexity than anger in Goldstein, who believes the negatives of such a decision outweigh the positives.
``It's hard to understand why he is doing this,'' Goldstein says. ``Once again Tudjman will have to explain that it is not a fascist symbol, and it seems he will forever have to defend it.''
Reviving the kuna comes at a time when Croatia is attempting to normalize relations with its minority Serbs who rebelled against Croatia's declaration of independence in June 1991, and, backed by the powerful Yugoslav Army, captured nearly a third of the republic.
Last March, both sides reaffirmed their commitment to a cease-fire declared in January 1992 - loosely followed prior to that - as the first step toward talks to reintegrate the Serb-held areas back into Croatia and begin economic cooperation.
Serbs denounce move
Reviving the currency, Serb leaders in Croatia say, takes the momentum toward a peaceful settlement a step backward.
``We do not welcome the establishment of the kuna,'' says Dragan Hinic, Serbian Peoples Party member of the Croatian parliament.
``The kuna is a fascist currency, and its association with the independent state of Croatia during World War II will not ease the process of normalization between the Croatian government and the local Serbs,'' he says.
Tudjman contends, as he does with the Croatian crest, that the kuna - the Croatian word for marten, a forest animal - dates back to the 11th century when the animal's skin was used for barter trade.
``The kuna has been the currency since the 11th century,'' Tudjman said at a monthly press conference.
``It is not wise - in fact it is an act of political immaturity as well as an attempt to discredit the Croatian democratic authorities - to associate the kuna exclusively with the [Ustashe],'' he said.
But when pressed, a spokeswoman in Tudjman's office conceded that Croatian currency had never actually been called the kuna prior to 1941. Before then, only an image of the kuna had been printed on the Croatian crown in the 13th century.
The kuna will replace the Croatian dinar adopted shortly after independence. Printed in Germany, the new kuna will be in denominations of five to 1,000, and it will be exchangeable with the dinar at a rate of 1,000-to-1 until the end of 1994, without devaluation.
The kuna's introduction is intended to put the finishing touches on a successful campaign that has reduced the inflation rate to a sustainable level from nearly 2,000 percent last October.