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03ZAGREB2505 2003-11-26 15:00:00 SECRET//NOFORN Embassy Zagreb
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					  S E C R E T  ZAGREB 002505 



E.O. 12958: DECL: 11/25/2013

Classified By: Ambassador Ralph Frank for Reasons 1.5 (b,d)

1. (C) Your visit to Croatia just two weeks after
parliamentary elections will give the USG a unique
opportunity to influence the next government's policy.
Although HDZ President Ivo Sanader has not finished putting
together the coalition which will give him the support needed
to pass a vote of confidence, his overwhelming victory in the
November 23 poll means that he will almost certainly be
Croatia's next Prime Minister by early January.

2. (C) Even before his campaign went into high gear, Sanader
made clear his intention to take steps to improve Croatia's
relationship with the U.S. Since the election, the HDZ has
in private meetings with the Ambassador and in public
statements re-affirmed its intention to sign an Article 98
agreement and to move to deploy Croatian troops to join the
coalition in Iraq. Despite the HDZ's strong showing in the
election, however, Sanader's majority in parliament will be
very narrow; he may not be able to deliver easily on these
pledges. Nevertheless, it would be appropriate to "cash this
check" by expressing the USG's gratitude for these tough
policy decisions.

3. (C) Both in meetings with us and with the EU, Sanader has
demonstrated that he knows the right things to say about
addressing Croatia's war legacy. While he chooses his words
carefully, Sanader has said that a government led by the HDZ
would cooperate with The Hague war crimes tribunal and would
address refugee return and property restitution issues. Your
visit should underscore that both the U.S. and the EU will
look for results, not just statements on these issues;
cooperation with the war crimes tribunal is not negotiable.

4. (C) Croatia made good progress towards NATO membership
during the tenure of the Racan government. Just over three
years ago, Croatia was outside of Partnership for Peace. Now
completing its second cycle in the Alliance's Membership
Action Plan, Croatia has demonstrated its commitment to
making the necessary sacrifices to reform its military and
develop capabilities to make a contribution to NATO. One
important goal of your visit would be to convince Sanader to
continue the progress begun in the past two years. This was
not merely SDP party policy, but a sound direction which met
with the approval of NATO allies.

5. (C) Reform of the Croatian Armed Forces (CAF) is
progressing slowly, but in a positive direction. The focus
of CAF's reform efforts in 2002 and 2003 has been on
downsizing and restructuring at the price of not training and
modernizing the force. This process is being conducted in a
transparent manner, with criteria set on professional
capabilities and the needs of the force, not political
affiliation. Croatia has made significant progress in
de-politicizing its armed forces. But senior HDZ officials
have suggested that they may reverse some of this progress.
Your visit could serve to underscore that NATO expects the
uniformed services to remain outside of politics.

6. (C) Although the Racan government -- and President Mesic
-- were not helpful on Iraq, Croatia has been an active
supporter of international efforts to combat terrorism.
Croatia deployed a highly-professional platoon of military
police to Afghanistan. This unit functioned as a national
unit under the supervision of the German contingent during
ISAF III and is now under Canadian command as part of a
Canadian MP company in ISAF IV. Croatia made significant
contributions of weapons and munitions to the fledgling
Afghan National Army and made donations of humanitarian
assistance both to Afghanistan and Iraq.

7. (C) When the Racan government signaled in July 2003 that
it might be ready to make a troop contribution for Iraq,
Croatia established a liaison officer at U.S. CENTCOM
headquarters to begin technical talks in advance of a
political decision to deploy. Although the Racan government
decided to defer deployment until after elections, Croatia's
liaison officer remains at CENTCOM working to coordinate
issues from Croatia's ISAF mission. Since this officer
already in Tampa and since Croatia's Special Operations
Forces soldiers designated for Iraq have already finished a
five-month training course, deployment of Croatia's soldiers
-- provided the HDZ can line up enough votes in parliament --
could take place quickly.

8. (S/NF) Acquisition of Croatia's S-300. Two successive
Croatian Ministers of Defense have promised, yet not
delivered on facilitating the transfer to the USG of
Croatia's incomplete, yet highly desirable S-300 (SA-10

Grumble) surface-to-air missile. MOD Antunovic worked
closely with our Defense Attache to orchestrate transfer of
this system to the USG, but she ran out of political support
and time before the parliamentary elections brought a halt to
the transfer. Elements of this system are intended for use
by the U.S. Air Force in testing and validating future
generation aircraft. An ongoing legal dispute between the
GoC and arms purveyor Zvonimir Zubak over S-300 ownership has
the system locked up in civil court proceedings. Ceding
possession rather than ownership is a possible workaround for
the GoC. Department of State, OSD and Air Force staffs are
actively involved in this foreign material acquisition case.