1. (C) On September 3, the Slovenian Charge called upon the
DCM to deliver a fairly low-key pitch that the U.S. and EU
help "create the atmosphere" for a resolution over the
conflict over the Croatian intention to announce an exclusive
economic zone (EEZ) in the Adriatic. In a presentation that
seemed to mix personal opinion with instructions from
Ljubljana, he downplayed Slovenian economic interests,
instead emphasizing Slovene concerns over access to open seas
and a belief that Croatia intended to use the EEZ declaration
as an attempt to strengthen its hand in the still-unresolved
negotiation of a sea and land border agreement.



2. (C) In a separate meeting with the Croatian MFA, the head
of the Legal Department assured us that an EEZ would not
cause problems in navigation (including for warships), and
would not affect existing Slovene-Croatian fishing
agreements. Our interlocutor said discussions were ongoing,
and that no definite decision had been made to declare an EEZ
as opposed to an ecological and/or environmental zone. End
Summary

EEZ and Border Agreement -- Separate but Linked


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

--



3. (C) On September 4, Slovenian Charge Hocevar called on
the DCM. He noted that the Slovenian non-paper on the EEZ
issue, presented to an embassy colleague the day before
(faxed to EUR/SCE, L and OES), was "already" old, and that
the Slovenian arguments were evolving, especially as it
prepared for an October 22-24 meeting in Brussels and a EU
fisheries meeting in Venice, set for November. He emphasized
that while the EEZ and the border agreement were legally
separate, the main Croatian motivation in declaring the EEZ
was to put Croatia in a stronger position in the border
negotiation (an earlier settlement, which covered both
maritime boundaries and some small adjustments to the land
border, was initialed by the GOC and GOS, but repudiated by
the GOC after meeting fierce opposition in Croatia). Hocevar
speculated that Croatia may also wish to cement rights over
gas deposits.



4. (C) While conceding that the repudiated agreement was not
legally binding, Hocevar was confident it would form the
"basis" of an arbitrated agreement. When asked if the GOS
was willing to accept arbitration, he noted that the GOS was
concerned about the possible partiality of a judge on the
International Maritime Court in Hamburg, so had rejected that
venue. The International Court of Justice in the Hague was a
possibility, but the GOS had not made a final decision.

Electioneering


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





5. (C) Hocevar was pointed in ascribing current Croatian
policy statements to electioneering. He believed that Deputy
Foreign Minister Simonovic was the architect of this
anti-Slovenian campaign waged in the press without
consultations with Ljubljana. Hocevar also commented that
the Slovenian side should lower its rhetoric, and not allow
itself to be baited by the Croatians.

"Basic Right of Access"


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





6. (C) Hocevar downplayed Slovenian economic interest in
fisheries, guessing that there were only about 50 Slovenian
fishermen. However, history, the coastal way of life and
"tradition" gave the sector more weight than the employment
numbers would indicate. The main reason for Slovenia's
concern was a fear of being cut off from the open sea. When
the DCM noted that the Convention on the Law of the Sea
guarantees the right of innocent passage, Hocevar replied
that in cases of "national emergencies," EEZs could be closed
off, creating crises -- e.g., Panama under Noriega or a
Greek-Turkish conflict that almost led to war. Hocevar
argued it was in the interest of all countries, including the
U.S., to preserve as open access as possible to the high


seas, and that it was the "basic right" of Slovenia to have
access to the sea. Slovenia would seek a joint-ecological
zone. "Hopefully, Croatia will see the importance of EU and
NATO in today's world," Hocevar concluded.

A Concession Too Far


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





7. (C) Previously, we met with the head of the MFA's
international legal department, Andreja Metelko-Zgombic. She
confirmed many of the points made the day earlier by the
Deputy Minister to the diplomatic corps (ref B). Discussing
the repudiated border agreement, which the Slovenians believe
enhances their rights to "territorial access" to the open sea
(as opposed to merely effective access through transit
rights), Zgombic said the agreement had been opposed even
before its initialing by most Croatian legal experts, but had
been a good-faith effort to promote good neighborly
relations. It ultimately proved to be too generous to gain
the constitutionally required parliamentary ratification.
The agreement, which included both sea borders and minor land
border adjustments, would have ceded Croatian territorial
waters to create an open sea corridor from internationally
recognized open seas to Slovenian territorial waters. In
doing so, it would have cut off a triangle of Croatian
territorial waters from the rest of Croatian jurisdiction.
The Croatians had also negotiated some concessions on the
land border within the same agreement, which were also not
now operable. Zgombic reiterated previous Croatian
assertions that the GOC was ready to seek arbitration in any
relevant court, including the ICJ.



8. (C) When asked to comment on Slovenian press suggestions
for a Monaco-like solution (France ceded some territorial
waters to Monaco to ensure Monaco's access to open sea),
Zgombic noted that France "gave" this away -- it was not a
right of Monaco -- and a similar approach had already been
tried in the form of the rejected agreement and found
politically infeasible.

If Navigation, Fishing and Gas Not Issues ...


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





9. (C) On practical issues, Zgombic said that existing
fisheries treaties with Slovenia, which extend fishing rights
in territorial waters, would continue in force (the EEZ would
have no impact on territorial waters). Croatia was prepared
to negotiate special fishing rights in the EEZ for Slovenia
as a Geographically Disadvantaged Country as provided for
under Article 70 of the Convention on the Law of the Sea.
The right of innocent passage without prior notification
through the EEZ, including for military ships, was not in
doubt. The memorandum recently signed by Croatia, Italy and
Slovenia, which created counter-clockwise commercial traffic
lanes in the Adriatic, would remain in force. Finally,
Zgombic looked surprised when asked if an EEZ would have any
impact on exploitation rights of the seabed in the Adriatic.
She noted that it is clear in law that an EEZ has no impact
on the rights related to the underlying seabed, which are
determined by agreements on the continental shelf, which is
not in dispute. (Note: at least so far.)



10. (C) Zgombic claimed that no firm decisions had been made
on the declaration of an EEZ. The options of declaring an
ecological zone or a fisheries zone were still in play. She
saw little difference between a combined fisheries/ecological
zone, and an EEZ. (Note: the previous day, the Deputy
Minister had told the diplomatic corps that the GOC
preference was for an EEZ because of its more solid legal
base.)

... Then Why the Decision?


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





11. (C) When asked why the government had decided to make
this declaration of intent now, after having mulled over the
issue publicly so long, Zgombic ventured that the EU policy
of encouraging fishery or ecological zones had been an
important factor, as well as evident degradation of the
environment and decline in fish stocks. Earlier, Croatia had
been constrained by political considerations, including a
perception that Italy would object to losing automatic access
to nearby open sea. (Comment: It is very likely Croatia
would negotiate special fishing rights for Italy when
delimiting the overlapping Croatian and Italian EEZ claims.
It is also likely that Croatian elections, slated for


November, factored in the decision; being tough on the
Slovenians is always a political winner. End Comment.)

Comment


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





12. (C) While confident of its right to declare an EEZ, the
GOC is aware of its obligation to consult -- but it does not
believe that consultations need to be concluded to Slovenian
satisfaction before it can act. Nevertheless, the government
has said it will not declare an EEZ precipitously. It has
(belatedly) sought consultations, and publicly called for the
return of the Slovene ambassador, recalled by Ljubljana
earlier this week. While the GOC has mustered its legal
arguments, it is unclear whether the GOC has considered all
the political consequences -- especially if the GOS puts
teeth in its alleged intimations that its support for
Croatia's EU membership is at risk. We concur with Embassy
Ljubljana's recommendation that Croatia and Slovenia be
encouraged to work this out bilaterally, or in an EU context.
FRANK


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