CROATIAN ELECTIONS: GOOD TIME TO STAY ON SIDELINES

C O N F I D E N T I A L ZAGREB 002391

SIPDIS


E.O. 12958: DECL: 11/12/2013
TAGS: PGOV PREL HR
SUBJECT: CROATIAN ELECTIONS: GOOD TIME TO STAY ON SIDELINES

Classified By: Nicholas Hill, Polecon Counselor, for Reasons 1.5 (B) an
d (D)



1. (C) Summary: Elections are less than two weeks away and
remain too close to call. Both sides have complained that
the U.S. favors the other side. In contrast to 2000, when
post played a rather prominent role shepherding the cats that
made up Croatia's democratic opposition parties into
something like a workable coalition, we have remained more
publicly neutral this time. If we favor any side it would be
the ruling coalition under Prime Minister Racan's Social
Democratic Party -- but, unlike in 2000, what the current
election season is putting on display is a range of parties
with many shades of gray. HDZ has come a long way since
Tudjman times, but it is not fully reformed. SDP has moved
Croatia in the right direction -- toward regional
reconciliation and Euro-Atlantic institutions -- but it has
been a big disappointment when juxtaposed against
expectations at the beginning of its mandate. End summary.


2. (C) There is a range of issues we will be looking to the
next government to manage -- cooperation with the War Crimes
Tribunal, facilitation of refugee returns, and regional
reconciliation are key issues that Croatia faces as part of
overcoming its wartime legacy. Euro-Atlantic integration and
implementing the wrenching reforms required of any transition
country will also continue to figure prominently. HDZ
President Ivo Sanader argues to us that a government he heads
will be much more friendly to the U.S. and sensitive to our
priorities in the bilateral relationship. His likely foreign
minister, Miomir Zuzul, Croatia's Ambassador in Washington
during the Tudjman era, is even more aggressive in making the
case. We like some of the rhetoric coming out of HDZ these
days compared to the bad old days under Tudjman, but remain
skeptical about follow through.

Overcoming Wartime Legacy
--------------


3. (C) Sanader knows what priority we attach to Croatia's
cooperating fully with the War Crimes Tribunal and in private
meetings assures us he has no intention to slack off compared
to the current coalition. Quite the contrary, he argues that
an HDZ-led government will be "much more efficient" in
working with The Hague. This is a comparison that does not
offer much reassurance given the current government's rather
indifferent record of cooperation. Moreover, Sanader's party
has several key people who have rather cozy ties to potential
war criminals. Indeed, near the top of its list in Osijek is
Branimir Glavas, an HDZ leader in the early nineties who
played a considerable role in stirring up ethnic tensions --
and who many believe belongs in the The Hague himself. Among
his potential coalition partners, Sanader will have Drazen
Budisa, leader of the Croatian Liberal Party (HSLS). He has
demanded that Croatia must change its terms of Cooperation
with ICTY. A former coalition partner of Racan's, he has
demonstrated already that his threats can be more than
bluster.


4. (C) Another priority for the U.S. in its relations with
Croatia is seeing progress on refugee returns. The current
government has taken criticism for not doing enough to
facilitate the return of ethnic Serbs expelled in the
mid-nineties. OSCE and UNHCR have led the way in pointing
out the Racan government's deficiencies on this front and
pointed to the lack of follow through. Statements of intent
are made in Zagreb about what will be done to facilitate
returns and then little happens at the local level. Sanader
has told us he understands the importance of facilitating
returns -- but we have seen precious little in terms of an
HDZ strategy for pushing this issue forward. (Although at
Sanader's instruction when trying to set up a lunch meeting
with the Ambassador, HDZ did forward to us a copy of a speech
by Glavas underscoring the importance of inter-ethnic
reconciliation. We cannot confirm if the speech was actually
delivered.)


5. (C) Another priority for the U.S. is seeing Croatia
improve its relations with its neighbors. On this issue on
balance the current government has done well -- and is less
vulnerable to an argument that HDZ could do better to advance
our agenda. Indeed, one of the first things the Racan
government did on coming to office was to stop undermining
Dayton by meddling unconstructively in BiH's Bosnian-Croat
community. Many outstanding issues remain, including
ratifying the Ploce Port Agreement, but most observers agree
that relations are much more normal than during Tudjman
times. Similarly, relations with Belgrade are much better.
The two sides are moving constructively on a number of
fronts, including by signing a landmark temporary agreement
over the Prevlaka peninsula, which enabled the UN to shut
down its observer mission there at the end of 2002. Given
all the bad blood, it is implausible that HDZ could step in
and push regional reconciliation more effectively.

Euro-Atlantic Integration
--------------


6. (C) We support Croatia's integration into NATO and the
EU, and have applauded the Racan government for pushing this
process forward -- although it is not clear that continued
progress hinges on the results of next week's elections.
Certainly much has been done in the past four years. The
Prime Minister, particularly in recent months, has made EU
integration the centerpiece of its mandate. Quite
constructively, the government has made clear that difficult
decisions on ICTY cooperation and a range of reform issues
will have to be made as part of this effort to move toward EU
membership. The government signed a Stability and
Association Agreement with the European Commission in January
2002 and has been working with the EC on membership
requirements ever since.


7. (C) The problem is that the difficult decisions that
Racan has been willing to talk about are not getting resolved
and Croatia -- read, this government -- is only now starting
to pay the price. The SAA is bogged down. If the British
and Dutch do not ratify it by year-end -- their chief gripe
is over the government's inability to track down Ante
Gotovina, at present Croatia's only known ICTY indictee --
the EU's ten new members will enter in May and be asked to
ratify it too. As a result of the delays, the notion that,
to get into Europe, Croatia needs Racan is looking less
convincing all the time. And for his part, Sanader and
others in leadership positions in HDZ have been making some
of the right noises about Euro-Atlantic integration. The HDZ
leader may be in a position to pull off a Nixon-to-China: it
is doubtful that he would let problems concerning refugee
returns or the War Crimes Tribunal derail Croatia's progress
on EU integration.


8. (C) Sanader and Zuzul argue that they will work hard to
keep EU integration on track and work even harder than the
current government on NATO integration. The jury is out for
a while, but their case has some resonance. Racan has
benefited from the goodwill shown him ever since he came to
office. Sanader will benefit from no such goodwill, and
bromides will not pass for policy measures. He will have to
bend over backward to answer the concerns about whatever
coalition he forges, and deliver on substance not rhetoric.
If he comes to power, whatever he does, there are plenty of
skeptics in EU capitals and Croatia will inevitably lose time
on moving toward the EU and NATO -- Sanader's task will be to
move quickly to put the doubters at ease. We are not
convinced yet that he will succeed, particularly given some
of the problematic, retrograde people associated with any
HDZ-led coalition. But it would also be unfair to suggest
that an HDZ victory would automatically poison Croatia's EU
and NATO chances -- particularly if substance replaces style.


Conclusion
--------------


9. (C) In part because the choices in Croatia's political
orbit are so uninspiring, we are more ambivalent and have
played a less active role in these elections compared to four
years ago. The current government has the right instincts
about what needs to be done, but not the stomach to carry
through on the implementation. It has also been lamentably
unresponsive on some of our own priorities -- in particular,
its policy concerning Iraq during the lead up to war was
confusing and unhelpful; it pandered needlessly to its old
World War II allies Germany and France. At the same time,
after only four years out of power, HDZ has baggage and its
return to power will leave many uncomfortable about the
future. We suspect that an HDZ-led coalition would look less
like Tudjman revisited and more like Viktor Orban's coalition
in Hungary until last year -- nationalist and somewhat
roguish, with a lot of kleptocrats taking prominent
positions, but not necessarily a malignant force for
instability. All in all, this is a good time to stay on the
sidelines.
FRANK


NNNN