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This set of cases describes the diplomatic and economic pressures faced by the government of Hungary with the 1991 break-up of Yugoslavia and subsequent outbreak of the Balkan War, which occurs on Hungary''s southern border with Serbia. Specifically, it focuses on the pressures that arose as a result of prospective United Nations sanctions against Serbia, the prospect of which poses a dilemma for Hungary. Supporting sanctions would gain Hungary favor with the West, to which it had turned since the fall of its Marxist regime in 1989. But support would also be a blunt challenge to Serbia, with which it was linked in the southern European regional economy. The case allows for discussion of the balance to be struck among moral, political and economic diplomacy. It is used as a "case in point" in the note How to Teach a Case (C18-95-1285.0) in addition to having its own teaching note.