By Andrea Shalal and Fatos Bytyci
PRISTINA, April 13 (Reuters) - Germany's foreign minister Sigmar Gabriel urged the European Union on Thursday to support infrastructure projects in the Western Balkans and told Kosovo it needed to improve relations with Serbia to advance its bid to join the EU.
Gabriel, who spoke after meeting Kosovan Prime Minister Isa Mustafa, also urged the parliament in Pristina to finalise a border deal with Montenegro to unlock a visa liberalization agreement, saying the two countries were not really that far apart.
The opposition party opposes the border deal, however, and it is unclear if it would win the necessary two-thirds support.
Gabriel, a former economics minister, told a joint news conference that the EU could do "significantly more" to support Kosovo and other Western Balkan countries as they worked to fulfil the EU's strict criteria for membership.
Nearly two decades after the Kosovo war, relations between Serbia and the ethnic Albanian-majority government in Kosovo remain strained. Serbia continues to regard Kosovo, which declared independence in 2008, as a renegade province.
"It will cost money, yes, but it would be relatively inexpensive compared to the alternative, which is a rekindling of the old tensions in the region," Gabriel said.
"It would be smart of Europe to insist that all the criteria of EU membership be met, but also to do more ... to improve the living conditions of the people here so they don't lose their faith in Europe," he said.
At the same time, he said it was imperative for Kosovo, Serbia and other countries to work to improve relations among themselves and build the trust needed for future EU membership.
"In the end they will only get into the EU if they trust each other," he said.
Gabriel gave a similar message to Serbia on Wednesday, telling it that Germany supported it on its path to EU membership but that it must work on reforms and mend fences with Kosovo.
Mustafa said Kosovo remained grateful for Germany's support. He said his country was moving to implement agreements already made with Serbia to try to normalise relations.
"We believe that the dialog produced the results to deescalate the relations between Kosovo and Serbia," he said.
He also underscored Kosovo's continued interest in building a national army, but said it should be done with the support of the NATO alliance, the EU and the United States.
"Kosovo will and should have its army," Mustafa said.
Kosovo bowed last week to pressure from traditional allies the United States and NATO by delaying plans to establish an army strongly opposed by the country's minority Serbs.
Gabriel said it was important that any army plans should be coordinated with the Serb minority. (Editing by Hugh Lawson)