You have to hand it to Slobodan Milosevic. For a long time the Serbian president was portrayed as the greatest villain in Europe, a demagogic tyrant who should probably be put on trial for war crimes. But now he is being hailed as a man of peace, and the United Nations Security Council has begun the process of lifting sanctions against Serbia.


"He has run rings around us all," said one European diplomat. "His behavior was one of the biggest factors behind the outbreak of the Yugoslav wars, but now we are supposed to thank him for promoting peace."


The turnaround in Milosevic's fortunes is attributable to his decision to sever relations with the Bosnian Serb leadership for their refusal to accept an international peace plan for Bosnia-Herzegovina. The plan, drawn up by the United States, the European Union and Russia, offers 51 percent of Bosnia to a Muslim-Croat federation and the rest to the Bosnian Serbs.


No wonder Milosevic is happy. After more than three years of fighting in former Yugoslavia, the Serbs are in control of 30 percent of Croatia and are being offered almost half of Bosnia. Add that lot to Serbia and Montenegro, the two components of Milosevic's rump Yugoslav state, and you will see that he has done rather well out of the break-up of Yugoslavia.


In fact, Milosevic has expanded the amount of territory under Serbian control to its greatest extent in modern history. Ideally, perhaps, he would like a little more. It has long been a dream of nationalists in land-locked Serbia to have a big port or two on the Adriatic coast. But that can come later. For the moment, he needs a pause because three years of war have exacted a heavy toll on the Serbian economy.


It is quite extraordinary that the outside world should feel obliged to express gratitude to a man who has just demonstrated that aggression pays rewards. Whatever happened to the idea, supposedly at the very heart of post-Cold War international relations, that frontiers must not be changed by force? Doubtless the Americans, Europeans and Russians will protest that they are not countenancing Serbia's annexation of large chunks of Croatia and Bosnia. But sanctions are being lifted at a time when Milosevic is still refusing to extend diplomatic recognition to Croatia and Bosnia in their pre-war borders.


Whatever harsh words Milosevic may have for his Bosnian Serb prot?g?s now, the fact is that in the long run he stands to benefit from their actions. For example, UN refugee officials report that, out of more than 800,000 Muslims and Croats who lived in the 70 percent of Bosnia that now lies in Serbian hands, only 80,000 remain. Ethnic cleansing, organized with Milosevic's tacit approval, has done a thorough job of transforming entire towns into purely Serbian areas. Rest assured that Milosevic will not be in a hurry to encourage the return of Muslim refugees to their old homes.


European leaders in particular will pay a price for their inability to meet the Milosevic challenge. That price will take the form of future wars, certainly in the Balkans and possibly elsewhere in Europe, too. Milosevic has doomed his region to repeating the experience of conflict, but Europe as a whole is the big loser. It was asked a question, and it could not come up with an answer.