UNBLOCKING SFRY ASSETS: PICULA SAYS GOC STILL

C O N F I D E N T I A L ZAGREB 000578 SIPDIS E.O. 12958: DECL: 03/12/2008 TAGS: PREL PGOV ECON EFIN MK SR BK SI MW HR SUBJECT: UNBLOCKING SFRY ASSETS: PICULA SAYS GOC STILL LOOKING AT PROPOSAL CONFIDENTIAL PAGE 02 ZAGREB 00578 141741Z REF: A. (A) STATE 50887 ¶B. (B) ZAGREB 450 CLASSIFIED BY: NICHOLAS HILL, POLITICAL ECONOMIC COUNSELOR, FOR REASONS 1.5 (B) AND (D) ¶1. (C) THE AMBASSADOR DELIVERED DEMARCHE (REF A) CONCERNING USG PLANS TO UNBLOCK SFRY ASSETS TO FOREIGN MINISTER PICULA MARCH 14. PICULA WAS NON-COMMITTAL, BUT AGAIN POINTED TO THE DIFFICULTY OF PROVIDING A HOLD HARMLESS IN THE ABSENCE OF A RATIFIED SUCCESSION AGREEMENT. AS HE HAS IN PREVIOUS MEETINGS WITH THE PRIME MINISTER AND FOREIGN MINISTER, THE AMBASSADOR STRESSED SEVERAL TIMES THAT PROVIDING A HOLD HARMLESS AGREEMENT WOULD NOT PREJUDICE CROATIA'S CASE WITH RESPECT TO THE ASI. IN THE ABSENCE OF A HOLD HARMLESS, HOWEVER, CROATIA STOOD TO LOSE ALMOST $52 MILLION. ¶2. (C) THE AMBASSADOR UNDERSCORED THE APRIL 15 DEADLINE IN THE DEMARCHE, BUT NOTED THAT ANY DECISION SHOULD COME SUFFICIENTLY IN ADVANCE TO GIVE TIME TO REVIEW THEIR POSITIONS TO OTHER SUCCESSOR STATES WHO HAVE BEEN TAKING THEIR LEAD FROM THE GOC. ROSSIN CONFIDENTIAL >