EU-US BALKANS TROIKA: GROWING IMPATIENCE ON ICTY

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 004352

SIPDIS

E.O. 12958: DECL: 10/08/2014
TAGS: PREL EAID ZL EUN USEU BRUSSELS
SUBJECT: EU-US BALKANS TROIKA: GROWING IMPATIENCE ON ICTY
COMPLIANCE, LOOKING AHEAD ON KOSOVO

REF: A. USEU BRUSSELS 4265


B. SKOPJE 1684

C. TIRANA 1625

D. USEU BRUSSELS 4317

Classified By: RICK HOLTZAPPLE, POLOFF, REASONS 1.4 (B/D)

SUMMARY
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1. (C) On September 30, EUR/SCE Director Chuck English and
EUR/ACE Deputy Director Pat Nelson-Douvelis met with the EU
Troika (Dutch and Luxembourg Presidencies, Commission,
Council Secretariat) to discuss Balkan affairs. The EU
stressed the "twin track" approach for Serbia and Montenegro
implied no weakening of ICTY conditionality. On Kosovo, the
Commission is looking for money to help with post-riot
reconstruction, but have not responded to the Eide report's
recommendation for an economic development strategy. High
Rep Solana's Balkans advisors see tough times ahead on
getting to status discussions. The EU is toughening its
message on ICTY compliance with all the relevant countries,
but remains somewhat nervous about potential variance between
US and EU approaches. Policy coordination between the US and
EU on Macedonia and Albania is excellent. END SUMMARY.

Serbia and Montenegro: How the "Twin Track" Will Work
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2. (C) Genoveva Ruiz Calavera, Deputy Head of the
Commission's Serbia and Montenegro Unit, described the EU's
new "twin track" approach in the same terms as reported Ref

A. She added that the Commission still believes it would
have been better if SAM had been able to complete internal
market harmonization, but the process had become caught in
"endless disputes." The key now was to ensure that any
Stabilization and Association Agreement is negotiated in a
way that "would preserve the essentials of the State Union"
such as its responsibility for foreign and defense policy,
including political dialogue with the EU, and implementation
of ICTY obligations. Ruiz Calavera also underlined that the
EU expects that Montenegro must also continue to "bear the
burden" of compliance with ICTY as well as Serbia. In
particular, the EU would be pressuring Montenegro to rejoin
the State Commission for ICTY cooperation. Ruiz Calavera
also asked for US assistance "to calm down" the Montenegrins,
who had overreacted to the EU's shift; "we told them not to
think of applying this approach at the WTO or UN; and the
next day they went to talk to the WTO."


3. (C) English noted that we had also seen the Montenegrins
misinterpreting the EU's new policy as an encouragement to
the government's aspirations for independence. He also noted
U.S. appreciation of and support for the EU's continued
insistence on ICTY cooperation as a precondition for progress
in the SAA process.


4. (SBU) In a meeting on Oct 1 with EUR/ACE's
Nelson-Douvelis, Commission SAM Unit Head Therese Sobieski
explained that the "twin track" approach would not apply to
the EU's CARDS program assistance to SAM, despite Montenegrin
appeals. The CARDS program in SAM is budgeted at around 190m
euros annually in 2005 and 2006, but the Commission has not
yet wrestled with the question of what it will do with
programs in municipalities that end up with Radical party
governments after the recent elections. Hungary was putting
lots of pressure on the Commission to take a tough line.
Sobieski also said the Commission was looking at resuming
macro-financial assistance to Belgrade, but that the GoSAM
had not yet met the necessary IMF conditions.

KOSOVO
--------------


5. (SBU) In a very brief discussion on Kosovo, both sides
agreed that the next several months were critical, leading up
to the standards review in 2005. Ruiz Calavera said the
Commission is currently looking for additional funds for
Kosovo this year. If such funds could be identified, the EU
would use them to support reconstruction efforts for cultural
and religious sites damaged in the March rioting,
supplementing the PISG's efforts to rebuild housing. English
said such a move by the EU would be very welcome.


6. (SBU) In her October 1 meeting, Sobieski indicated the EU
had not yet responded explicitly to the recommendation in the
recent Eide report calling for a comprehensive economic
development strategy. A major difficulty was that most
economic competencies in Kosovo were among the powers already
transferred from UNMIK to the PISG, but the Kosovar Ministry
of Economy had been totally ineffective. Sobieski also noted
that Pillar IV of UNMIK had recently issued a new report (a
copy was provided to EUR/ACE) on promoting economic
development.


7. (C) In a subsequent meeting, High Rep Solana's Balkan
advisor Stefan Lehne noted the difficulties of getting a good
result from the upcoming Kosovo elections. Lehne said that
some of his Serbian contacts (Samardizic and Ratkovic) had
hinted that Kostunica's initial negative response might not
be the last word. But even more fundamental is the need to
move from the standards process to the status issue; and
Lehne thought it was "almost impossible" to see how Belgrade
could go along with this transition in a constructive way.
When English raised the decentralization project as a way of
assuaging Serb concerns, Lehne commented that this would be
hard for the Kosovar Albanians to give away before status,
and that in any case, he thought security issues were more
important to the Serbs than legal ones. English responded
that decentralization was a critical part of the most
important issue: majority-minority relations.

ICTY COOPERATION LACKING EVERYWHERE
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8. (C) The EU shared the U.S. assessment that ICTY compliance
remains a widespread problem in the region. Jan Lucas van
Hoorn and Tony Agotha of the Dutch Presidency said that ICTY
Prosecutor Carla Del Ponte had recently told the EU she had
clear indications that fugitive indictee Ante Gotovina was in
Croatia this summer. In late September, Commission President
Romano Prodi called Croatian PM Sanader to complain about
poor Croatian performance, and the next day the GoC produced
a "hastily assembled" report on ICTY compliance, and
organized a couple of ineffectual raids on the houses of
suspected Gotovina supporters. Del Ponte has been invited to
the October 11 EU FMs' meeting (GAERC),to provide a tough
message on Serbia and send "a shot across the bow of
Croatia."


9. (C) In Bosnia-Herzegovina, the Republika Srpska remained
the key roadblock on better ICTY cooperation. If, as
anticipated, the GoBH had met all the other conditions of the
EU's feasibility study, the EU would be confronted with
whether it would have to postpone SAA negotiations with the
whole country because of the behavior of the RS. English
noted that the U.S. continued to support High Representative
Ashdown's efforts to prompt greater cooperation with ICTY,
and that Ashdown would continue to get support if he decided
to take further punitive measures. The Dutch Presidency's
Agotha reported the EU was getting close to final approval of
an asset freeze against fugitive ICTY indictees (details REF
D),although for legal reasons it could not be applied
against support networks.


10. (C) In his separate meeting, Stefan Lehne told English
and Nelson-Douvelis that the EU remains concerned about a
"disjuncture" between the messages being sent to the Serbs by
ICTY ("give us everything") and the U.S. ("only Mladic
matters"). Lehne said he always thought the Croatian model
provided a better approach. English said that would depend
entirely on what one thought the "Croatian model" was. If it
was improve your cooperation with ICTY, and then look for
some flexibility, then OK; but if it was cooperate on the
little things, but refuse to deliver the big fish, then we
could not accept it. Lehne did not respond directly, but
said Solana remained frustrated that ICTY conditionality was
blocking Serbia's progress toward an SAA with the EU and PfP
with NATO. And without Serbia on a positive track toward
Europe, then the Kosovo status problem was much more
difficult.

BOSNIA-HERZEGOVINA
--------------


11. (C) John Dunne, of the Commission's Bosnia unit, reported
that the GoBH was making progress on meeting the EU's
conditions for starting of SAA negotiations, although
Commissioner Patten was insisting on the need for more
implementation of laws passed. Helene Holm-Pederson of the
Council Secretariat commented that the EU-Bosnia ministerial
troika during the UNGA had demonstrated yet again FM Ivanic's
eloquent optimism and his lack of substance. Ivanic's one
substantive point had been to repeat his call for a
re-examination of the OHR mandate prior to elections in 2006.



12. (SBU) Holm-Pedersen also noted that neither the HDZ nor
SDA had been helpful during parliamentary debate on
legislation for a War Crimes Chamber in Bosnia. She observed
that the fact that "feelings are running high" on the issue
might be a "good sign it will have some bite." English
responded that the U.S. sees the War Crimes Chamber as an
important part of ICTY's completion strategy, and we remained
disappointed at the EU's meager contribution. Dunne said the
Commission had funded 1.5 million euro, and would "keep under
review" the possibility of further funding, but made no
promises.


13. (C) Lehne, in his meeting, said that the OHR transition
remained a "touchy question", particularly what should be
done with OHR's "Bonn Powers." But there seemed to be a
growing appetite for moving ahead with a change, perhaps by
"parking" the Bonn Powers with the PIC. Lehne cautioned,
however, that he was concerned about ideas floating that the
EU could somehow take over full responsibility on behalf of
the international community in Bosnia, or even in Kosovo.
"The EU is ready to engage more," he said, "but we can't do
too much too quickly."

MACEDONIA
--------------


14. (C) Ambassador Jean Louis Wolzfeld, representing the
upcoming Luxembourg Presidency, said the November 7
referendum on the decentralization was a discouraging
development, whatever the result. In the best of
circumstances it has slowed implementation of the law, and it
will likely undermine the confidence of ethnic Albanians in
the Ohrid Framework Agreement. Nonetheless, the EU would
continue to speak out in favor of the decentralization law as
a necessary element of the Framework Agreement, which is, in
turn, a necessary step on Macedonia's path toward the EU.
Wolzfeld also recalled that the European Commission was due
to issue its opinion ("avis") on Macedonia's EU membership
application by mid-2005.


15. (C) Lehne, for his part, saw the US and EU messages to
Macedonia (REF B) as well coordinated. He argued the EU
line, as elaborated by Wolzfeld, was "clear to anyone who can
read." There was no need for the EU or US to suggest a
boycott strategy. He predicted the GoM would probably appeal
for voters to abstain, and at that point the EU and US could
make supportive statements. (The Dutch Presidency had
earlier half-jokingly suggested the campaign slogan, "If you
want to travel (i.e., get a looser EU visa regime),then stay
home.")

ALBANIA
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16. (C) The Dutch Presidency expressed its appreciation for
U.S. support in its recent demarche to Albania on the need
for accelerated reforms (REF C). But the EU was concerned by
PM Nano's reaction. It appears Nano has not gotten the
message about how serious the problems are. (NOTE: At a
Sept. 30 dinner for English and Nelson-Douvelis, Albanian
Ambassador to the EU Artur Kuko (protect) said he shared the
EU's concern that the PM did not understand the seriousness
of the situation. END NOTE.) Nano's response has been to
cite the GoA's responsible behavior on Kosovo and the
"Greater Albania" question, and assume that trumps
everything. The European Commission, meanwhile, has
cancelled, for technical reasons, the next round of SAA
negotiations planned for early October.

SCHNABEL