Zeljko Vukelic says his stand-off with the Serbian government reminds him of the battlefield. Photograph: Mirko Rudic

A wounded leg brought Zeljko Vukelic home from the war. Back in Serbia, injured pride placed him on another warpath. Like a scar, the frontline has followed him.

"It's just like the Krajina," he says, comparing the battlefield where he faced Croatian forces 20 years ago to his present-day standoff against the government in Belgrade. "You sit there and wait for something to happen, but then you lose your patience and say: 'Let's just kill each other.'"

The men who once took up arms for the Serbian cause are now up in arms against the Serbian state. They accuse Belgrade of betraying them by withholding wages and welfare benefits. "In two hours, I can gather 20 men who would be ready to be killed if I said so," Vukelic says, underscoring his comrades' desperation. Vukelic is the secretary of the SVS, Serbia's largest veterans' organisation, which has been campaigning for more rights.

Across the border, Croatian veterans' leader Mirko Ljubicic listens straight-faced to the news of the campaign, occasionally clicking his tongue in sympathy at his wartime enemies' woes. The head of the Zagreb chapter of HVIDRA, a powerful association of former servicemen, Ljubicic is proud of his organisation's clout.

"Only veterans can gather more than 50,000 people at a public square," he says, referring to a recent protest in Croatia over plans to introduce signposts in the Serbian Cyrillic script.

In stark contrast with Vukelic, Ljubicic praises his government's policy towards its former soldiers and says the next step for them, as "proven patriots", is to enter the upper echelons of business and politics. He even suggests his former foes could learn lessons from his organisation. "Please feel free to recommend our actions to the veterans in Serbia," he says.

Short supply

Mirko Ljubicic, head of a Croatian veterans' group, says his country has honoured its former soldiers. Photograph: Mirko Rudic

Sympathy is in short supply for the hundreds of thousands of Serbs who fought in the Balkan wars. Their image abroad is linked indelibly to thuggery and atrocity. And even the Serbian veterans' compatriots can seem ambivalent towards them.

Ljubicic and his comrades are hailed in Croatia as branitelji, or "defenders" – a term with positive connotations. Serbs, who speak the same language, describe their former soldiers in more neutral terms – as veterani, derived from the English word, or as borci, meaning "fighters".

In the wars that destroyed Yugoslavia, the territories that secured greater autonomy or nationhood – such as Croatia, Kosovo, Slovenia and the Republika Srpska segment of Bosnia – would ultimately claim victory.

The veterans who fought for these territories now enjoy generous pensions, benefits, social approval and a measure of political influence. Their welfare exacts a heavy toll on weak economies. Nevertheless, the politicians have usually chosen to pay up, however grudgingly, rather than irk men whom the electorate sees as freedom fighters.

Serbia's moribund economy is certainly ill-equipped to meet its veterans' demands. But successive governments have also failed to push through any laws that recognise the veterans as a distinct category – a prerequisite to awarding them benefits.

Serbia emerged as one of the biggest losers from the 1990s. Over the course of the decade, the leadership in Belgrade and its allies fought against Croats, Bosniaks, Kosovo Albanians and, ultimately, the Nato alliance. The area under Belgrade's control – once all of Yugoslavia – was reduced and renamed through war and partition, leaving behind the modern state of Serbia.

By the end of the 1990s, Croatia and Kosovo had taken over large tracts of territory where ethnic Serbs had lived for centuries. The people who fled those defeats – including many former combatants – have clustered within Serbia, giving it the largest population of refugees in the Balkans. The displaced number around 300,000, or roughly 4% of the total 7.1 million-strong population. Yet of all the conflicts in that decade, Belgrade has only officially recognised one as a war: the brief confrontation with Nato forces in 1999.

'Military exercises'

Serbs flee a 1995 Croatian assault on the self-proclaimed republic of Krajina. Photograph: Drasko Gagovic

State records refer to the other engagements as insurrections, clashes or military exercises, in keeping with Belgrade's argument that it was fighting only to preserve the union of Yugoslavia. "It seems they tried to make a mess out of the veterans' issue from the very beginning of the war," says Milan Zivic, a former soldier who says he was called to the front while the stamp on his army report card stated that he was taking part in "military exercises".

For Zivic and others who fought, this has left behind a problem: they cannot easily claim war veterans' benefits for wars that never officially happened, and from a state that did not exist in its present form at the time. Moreover, there is no universal definition of a Serbian veteran, as the combatants were recruited in a variety of capacities.

The international image of the archetypal Serbian fighter may be dominated by warlords such as Arkan – but militias of the type he led were a minority, comprising criminals, football hooligans and hardcore nationalists.

Much of the fighting was carried out by irregular forces and paramilitary groups recruited from Serbian communities inside Croatia and Bosnia. They were backed at times by a Serb-dominated Yugoslav army, comprising conscripts and some professional soldiers.

However, Serbia – unlike Croatia, for instance – does not have a single, over-arching law that applies to the vast majority of these men. The veterans have no special status or rights, except as citizens.

Nor is there any reliable estimate for their number. Veterans' groups put it at 800,000. Olivera Markovic, a sociologist and expert on the former fighters, says it may be anywhere between 800,000 and half that figure.

According to Markovic, Serbian society still associates the veterans with their country's wartime leader, Slobodan Milosevic. Neither his supporters nor his critics have much affection for the former soldiers. "For those who were against Milosevic's policies, the veterans are his [hired] killers," she says. "For those who loved Milosevic, the veterans lost the war."

Ljudevit Kolar, a former army medic who helps treat veterans with post-traumatic stress disorder, says most of his old comrades are at odds with society: "They have gone through terrible things that still haunt them," he says. "No one understands them."

Kolar was tasked with identifying corpses. He too was traumatised, he says, spending "more time drunk than awake" when he returned from the front.

Dragan Milakara, a former soldier who lives in Novi Sad, says he does not talk of the war. "What should I say? That I saw a bullet shatter a wooden beam near my head? People would look at me as if it had shattered my head," he says.

Milakara does not expect any support from the authorities. "There is no state," he says. "The veterans are going to face the same fate as madmen in a psychiatric institution. You pretend you're treating them, but in fact you're just waiting for them to kick the bucket."

Overdue wages

Milan Zivic's army report card carries contradictory stamps, saying he was on military exercises - and at war. Photograph: Mirko Rudic

The SVS is fighting the Serbian government for overdue wages. The dispute arises from the 1999 conflict over Kosovo, which ended with Nato intervention.

The claim is being heard at the European court of human rights in Strasbourg – an irony for Mile Milosevic, who has been following the proceedings.

"I saw 17 judges from 17 European countries, almost every one of them a member of the Nato pact. They bombarded us and now we have to ask for their protection from our own country," he says, thumping the table with his fist. "Man, that's insane!"

According to a lawyer who has defended Serbian leaders on war crimes charges and who spoke on condition of anonymity, Belgrade's desire to join the European Union may also influence its policy towards the veterans.

A settlement with the former soldiers might play badly in western capitals, where it could be taken as a sop to nationalists and as a tacit acceptance of involvement in the Balkan wars. The state arguably finds it easier to ignore its veterans than to explain why it is paying them off.

"The Serbian government is probably less concerned about the legal issue than it is about the perception," the lawyer says.

Legal limbo

A Serbian reservist sleeps on a park bench in Belgrade in 1993. Photograph: Drasko Gagovic

While Serbia's former soldiers are in legal limbo, their Croatian counterparts have been assured a place in their country's history. "Their names will live on for eternity. We want to honour these people in a special way," says Predrag Matic, Croatia's minister for veterans.

Matic stresses the importance of having a broad law – of the kind that Serbia lacks – which regulates the veterans' relationship to the state. "The statutory definition of who can be a war veteran is important in that it protects people who participated in the war, their wives and children," he says. "Ultimately, it means resolving the health, social and economic problems which these people face after war."

Croatian veterans are entitled to preferential treatment if they apply for public housing or for education and employment. Those who were disabled in the wars can expect to receive a monthly allowance worth €800 (£677).

The state also gives its former fighters a minimum monthly pension of €260 on retirement. The sum is close to the average for Croatian citizens – but its greatest value lies in the guarantee.

Serbia does not offer any such guaranteed minimum pension to most of its veterans, except those who were injured or who served as professional soldiers.

"I wish I had been wounded, I would at least have some income now," says "Vanja", who volunteered for the war at 19. He fought in Serbian paramilitary units in Bosnia and Croatia and now begs for alms in the town of Backa Palanka. Destitute, afflicted by trembling hands, he asked not to be quoted by name.

• Mirko Rudic is a Belgrade-based journalist. This article was edited by Neil Arun. It was produced as part of the Balkan Fellowship for Journalistic Excellence, an initiative of the Robert Bosch Stiftung and ERSTE Foundation, in co-operation with the Balkan Investigative Reporting Network (BIRN).