1.(C) SUMMARY: THE DUTCH ARE DISMAYED, BUT NOT SURPRISED, BY
THE RS WALKOUT FROM THE ARTICLE IV SRCC. IN OTHER MATTERS,
THE HAGUE IS RECONSIDERING ITS VIEW OF THE OPPOSITION IN
SERBIA. THE NETHERLANDS ALSO FEELS SHUT OUT OF DISCUSSIONS
ABOUT THE FUTURE OF KOSOVO, BUT IS OPEN, ON A LIMITED BASIS,
TO SOME ADDITIONAL SUPPORT FOR THE KPC, PROVIDED IT GOES
THROUGH THE UNMIK REGULAR BUDGET. END SUMMARY.




RS WALKOUT OF ART. IV SRCC


--------------------------


2.(C) POLOFF DISCUSSED REF. A WITH BALKANS OFFICE ACTING
DIRECTOR JOEP WIJNANDS ON 6/27. WIJNANDS INDICATED THAT THE
DUTCH WERE DISMAYED, BUT NOT SURPRISED, BY THE RS BEHAVIOR
AND SAW THE WALKOUT AS PART OF A CONTINUING POLARIZATION
TREND IN BOSNIA. HE SAID THAT THE DUTCH EMBASSY IN SARAJEVO
WOULD BE INSTRUCTED TO IMPRESS UPON RS OFFICIALS THAT
CONTINUING LINKS TO THE VJ WOULD BE PERCEIVED NEGATIVELY BY
THE HAGUE. ADDITIONALLY, WIJNANDS NOTED THAT THE DUTCH WOULD
MENTION TO OHR PETRITSCH THAT A SIMILAR LINE NEEDED TO BE
PRESENTED TO BOTH RS POLITICAL LEADERS AND SERB BIH
OFFICIALS. FINALLY, WIJNANDS SAID THAT HE WOULD USE THE
OPPORTUNITY OF A PRE-EXISTING 6/27 APPOINTMENT WITH FRY
EMBASSY OFFICIALS TO UNDERSCORE DUTCH DISPLEASURE WITH THE RS
OFFICIAL'S BEHAVIOR AND THE NEED FOR THE FRY TO ENCOURAGE THE
RS TO COOPERATE WITH THE DAYTON PROCESS. HE SAID THAT HE
HARBORED FEW ILLUSIONS ABOUT PREDICTABLE FRY REACTIONS TO
SUCH A MESSAGE, BUT NONETHELESS FOUND IT A WORTHWHILE POINT
TO RAISE WITH THE FRY AS OPPORTUNITIES AROSE.




WHITHER THE SERB OPPOSITION ?


--------------------------




3. (C) PASSING ON REPORTING FROM THE DUTCH HOM IN BELGRADE,
WIJNANDS OBSERVED THAT DRASKOVIC SEEMS TO BE KEEPING A LOW
PROFILE AFTER THE RECENT SHOOTING INCIDENT IN MONTENEGRO. HE
NOTED THAT THE DUTCH IN BELGRADE HAD HEARD MANY RUMORS ABOUT
WHO MIGHT BEAR THE RESPONSIBILITY FOR THE MURDER ATTEMPT AND
FOUND FEW THAT CONVINCING (REFS. B/C). THE ONE CONCLUSION
THAT HE SAID DUTCH AND SOME OTHER EU OFFICIALS IN BELGRADE
HAD REACHED WAS THAT DRASKOVIC WAS EVEN LESS LIKELY THAN
BEFORE TO BE A PRODUCTIVE PARTNER FOR THE ALLIANCE FOR CHANGE
OR OTPOR. INCREASINGLY, WIJNANDS ADDED THAT THE DUTCH WERE
DEFINING THE SERB POLITICAL SPECTRUM IN FOUR BROAD
CATEGORIES: THE REGIME, DRASKOVIC/SPO, THE ALLIANCE FOR
CHANGE, AND OTPOR. HE SAID THAT THE DUTCH AND SOME EU
BALKANS SPECIALISTS STILL HELD HOPE FOR COOPERATION BETWEEN
THE ALLIANCE FOR CHANGE AND OTPOR ON FUTURE COMMON ELECTION
SLATES AND CAMPAIGN ORGANIZATION. DRASKOVIC, ON THE OTHER
HAND, THEY SAW AS SELF-MARGINALIZING AND UNLIKELY TO STRIKE
AN ELECTORAL ALLIANCE WITH EITHER ALLIANCE FOR CHANGE OR
OTPOR LEADERS. THIS WOULD LIKELY PRODUCE FURTHER
FRAGMENTATION THAT HE INTERPRETED AS A RECIPE FOR CONTINUING
MILOSEVIC DOMINATION OF THE SERB POLITICAL SCENE. WIJNANDS
ALSO WONDERED ALOUD WHETHER THE U.S. AND EU SHOULD
REINVIGORATE TRILATERAL COOPERATION WITH THE SERB OPPOSITION
BASED ON THIS ASSESSMENT. HE ALSO WAS CURIOUS AS TO WHETHER
THE U.S. WOULD FIND IT USEFUL TO SEEK A SYMBOLIC RUSSIAN ROLE
IN THE TRILATERAL PROCESS TO REDUCE WHAT HE SAW AS
CONSIDERABLE CRITICISM OF THE OPPOSITION BY SERB NATIONALISTS
FOR THEIR CURRENT COOPERATION WITH THE EU AND U.S. HE
OBSERVED THAT INCLUDING THE RUSSIANS AT THE MOMENT MIGHT BE
MORE PROBLEMATICAL THAN IT WAS WORTH, ESPECIALLY RECALLING
THEIR WALKOUT OF THE PIC AND UN MEETINGS. NEVERTHELESS, HE
SUMMARIZED SUCH A BRIDGE-BUILDING EFFORT SHOULD NOT BE AN
OPTION ENTIRELY RULED OUT FOR THE MID-TERM.


KOSOVO POLITICAL COORDINATION STILL A SORE POINT IN THE HAGUE


--------------------------



--------------------------




4.(C) FINALLY, POLOFF DISCUSSED THE REF. D KOSOVO PROTECTION
CORPS (KPC) PROJECTED BUDGET SHORTFALL WITH WIJNANDS AND
ASSISTANCE OFFICER NORBERT BOTH IN SEPARATE MEETINGS.
WIJNANDS DEFERRED TO BOTH ON BUDGETARY ISSUES, BUT RECALLED
THAT THE DUTCH FELT SOMEWHAT ESTRANGED FROM THE KPC AS AN
INSTITUTION, HAVING NOT BEEN CONSULTED ON ITS CREATION OR
PRIVY TO CONTACT GROUP DISCUSSIONS ABOUT ITS ROLE IN THE
KOSOVAR POLITICAL PROCESS . HE ADDED THAT THE DUTCH CONTINUED
TO FEEL EXCLUDED FROM CONTACT GROUP DISCUSSION OF A
U.S.-DRAFTED "FRAMEWORK DOCUMENT" FOR INTERIM STATUS FOR
KOSOVO. WHILE HE RECOGNIZED THAT PART OF THE FRICTION AROSE
FROM WHAT HE CALLED "INADEQUATE EU DISCUSSION OF ISSUES TAKEN
UP BY THE CONTACT GROUP," HE LEFT IT CLEAR THAT THE HAGUE
ALSO RESENTS A PERCEIVED U.S. ROLE IN EXCLUDING THE DUTCH
FROM DISCUSSIONS OF IMPORTANT BALKANS QUESTIONS FOR WHICH
THEY ARE NONETHELESS REQUESTED TO PROVIDE MILITARY AND
ASSISTANCE CONTRIBUTIONS. THIS ASIDE, HE NOTED THAT DUTCH
REVIEW OF THE "SUBSTANCE OF THE U.S. FRAMEWORK DOCUMENT" WAS
"LARGELY FAVORABLE." BOTH NOTED THAT THE PROJECTED KPC
SHORTFALL WAS AN ISSUE ALREADY DISCUSSED WITHIN THE HIGH
LEVEL STEERING GROUP AND THE DUTCH WERE WILLING TO CONSIDER
UNMIK USE OF DUTCH BUDGETARY SUPPORT FUNDS FOR KPC SALARIES
AND "REGULAR RECURRING COSTS," BUT NOT FOR CAPITAL
INVESTMENTS. HE MENTIONED "GUNS, CONSTRUCTION EQUIPMENT,
HEAVY TOOLS, AND CARS" AS EXAMPLES OF KPC CAPITAL COSTS THAT
THE NETHERLANDS DID NOT WISH TO SUPPORT.
TOKOLA