SLOVENIA: LUNCH WITH PM: MOVING FORWARD ON

C O N F I D E N T I A L LJUBLJANA 000610 SIPDIS DEPT FOR EUR/NCE, EUR/RPM, NSC FOR D. WILSON E.O. 12958: DECL: 08/23/2015 TAGS: PREL PGOV MARR ECON SI SUBJECT: SLOVENIA: LUNCH WITH PM: MOVING FORWARD ON PRIVATIZATION, CHALLENGES ON IRAQ REF: A. LJUBLJANA 438 ¶B. LJUBLJANA 449 Classified By: COM Thomas B. Robertson for Reasons 1.4 (b) and (d) ¶1. (C) Summary: In one-on-one lunch August 23, PM Jansa said he would continue in September to try to move his coalition toward accepting a deployment of trainers/mentors to Iraq, noting that political progress on the Iraqi constitution should make his job easier. He reported that that day he had approved a decision to waive the port and transportation costs for Hungarian T-72 tanks on their way to Iraq. The PM made clear that it was in Slovenia's interest to continue to support the beginning of EU negotiations with Croatia as early as possible, and that the GOS would do all it could to avoid exacerbating relations over the sensitive border issue. On privatization he said the government was favorably disposed toward an EBRD pre-privatization plan for Slovenia's telecom and that steps might be begun in that direction by the end of September. End summary. Back Down from the Mountains and Ready to Meet CJCS -------------- -------------- ¶2. (SBU) The lunch came about as a result of COM's request to speak to the PM before COM's departure to Washington, and before the visit of CJCS General Myers in early September. COM had last met Jansa high in the Slovenian Alps when they had climbed Mt. Triglav together August 7. During that time Jansa had mentioned GOS concern with rescuing Slovenian climber Humar, trapped on the wall of Nanga Parbat in Pakistan, and had asked about possible US assistance. COM took advantage of beginning of lunch to tell Jansa about US offers at that time to support Pakistani rescue efforts if necessary. Told about General Myers trip, the PM agreed to free up his schedule to meet with him September 5-6. Iraq -------------- ¶3. (C) Asked about his strategy to get Slovenian trainers into Iraq (Ref. A),PM Jansa told COM that he still had difficulties with his coalition. He had begun discussion of the issue in early July in the cabinet but continued to face resistance from the Slovenia People's Party (SLS) and the Pensioners party (DeSUS). Minister of Defense (and President of DeSUS) Erjavec was on board with such a deployment, however, he could not move his party's membership on the �00A;issue. While Jansa might be able to force through a positive decision within the cabinet, the subject would certainly be raised in Parliament, and a decision could unwind if that happened, as coalition parliamentarians might raise opposition. Interestingly, Jansa said Social Democrats president and opposition MP Borut Pahor had told him that he, personally, could support such a deployment, but only if Jansa had his own coalition on board. (Jansa smiled that he knew how that was: he himself had spent a long time in the opposition.) That said, Pahor admitted he would not be able to deliver his party, either. Asked by COM what he could do to help, Jansa volunteered that COM's meeting upon his return from the States with SLS party President (and Environment Minister),Janez Podobnik, and Erjavec might help. Jansa said discussions would continue within the government when they convened again in September. He stressed that Slovenia had a number of fine officers who looked forward to participating in such a deployment. ¶4. (C) Jansa volunteered that he was happy to see the Slovenian media reporting the Iraqi negotiations over the new constitution. This had a much more positive impact on the public than the endless coverage of the insurgency, showing that real progress toward a democratic state was going forward. He agreed with COM that if a large segment of the Sunni population could be brought on board with the constitution, and it appeared likely for approval by the population, this could significantly affect popular views of the situation there. Most importantly, Jansa said it would make easier his job to get his coalition on board for a deployment of mentors/trainers into Iraq. Good News: GOS to Waive Fees for Delivery of Hungarian T-72s to Iraq -------------- -------------- ¶5. (C) The PM noted that he did have good news for COM on Iraq front. He had just spoken to MOD Erjavec and agreed that the GOS would waive the costs of transportation and port costs of the Hungarian T-72s to be shipped to Iraq. COM expressed thanks for this good news and asked what the costs were associated with this, which Jansa said was 500,000 EUROs. Croatia -------------- ¶6. (C) Jansa reiterated that it was a key interest of Slovenia's to have negotiations begin as soon as possible for Croatia's entry into the EU. While Slovenia fully supported the timely beginning of negotiations with Turkey, beginning those negotiations without a prospect for Croatia's negotiations to begin soon would result in a very difficult political situation in Croatia. PM Sanader had campaigned on getting EU negotiations started, and if he had nothing to show for it by the time of the next elections, he would pay the price. Asked about Gotovina, Jansa expressed the opinion that he was in Herzegovina and that he could move around more easily since he had a French passport. Gotovina was less of a problem for Croatia's EU negotiations than was the continued presence of bad intelligence agents in the country. Sanader had tried to clean some of them out and had made changes, but there were still more who had to go. He said the British had had a terrible time earlier in Croatia, since some of these Croatian intelligence agents had undermined what the Brits there were trying to do. ¶7. (C) On the recent announcement of Italian-Croatian agreement on an eco zone in the Adriatic, Jansa said the press was mistaken that the GOS had known nothing about it. Italy and Croatia had been negotiating for over two years on this. As for Slovenia, the former GOS had agreed with Italy two years ago to assume the lines drawn between Italy and Slovenia that went back to the original Italian-Yugoslav agreement. It was impossible to conclude an eco zone agreement with Croatia while the border was still disputed. For this reason Slovenia would be cautious in any positions on this it would take, making note of the fact that Slovenia and Italy had agreed earlier to their division, while not attempting to make any declaration that would appear to have executive validity and that politically would only undermine the delicate Slovene-Croatian relationship. Jansa volunteered that the "lines are open" to Croatian PM Sanader, that Sanader had in fact informed Jansa of their agreement with the Italians, and that generally Sanader was acting "with good will" towards Slovenia, although he had elements in the HDZ that made his life difficult. Interestingly, Jansa said the GOS had not yet gotten confirmation from Italy that the agreement was in fact concluded, but they expected it within days. Privatization: Moving Forward with Telecom -------------- ¶8. (C) COM told Jansa that he had had lunch the day before with EBRD reps to Slovenia and Croatia, and that they appeared to have a pre-privatization package for Slovenia Telekom that might help the GOS go forward. He reiterated EBRD points that Slovenia not make the mistake Croatia had made, namely selling off part of telecom (in that case to Deutsche Telekom),but then delaying sale of the rest while the price continued to drop. The lesson was to strike early in order to get the best price. After all, given the rapid changes in technology, one had to wonder what the current Telekom would even be worth ten years from now. Jansa was clearly in the loop and said that the GOS was reviewing favorably the EBRD plan, and he thought that something might go forward by the end of September. Other issues -------------- ¶9. (C) --Denationalization: Jansa agreed there had been no progress made on US cases since last meeting (ref b),but underscored that Justice Minister Sturm would introduce legislation concerning the State Defender that would make it easier to proceed more quickly. --FDI: PM highlighted that the GOS decision to gradually eliminate payroll tax was directed at improving atmosphere for FDI. --Referendum on Slovenian television law: Admitted that it was too early to tell whether referendum to kill the recent GOS law would be successful, saying it would depend on turnout. Underscored that changes would "rationalize" state TV, noting that RTV Slovenia had four times as many employees as similarly sized private television networks. --Changes in MOD: Jansa suggested that he had not been involved in replacement of key MOD personnel, saying he did not have enough time to micromanage the ministry. He noted, however, that there was considerable "deadwood" at MOD and in the Armed Forces, particularly in senior ranks. --Recent flooding: Jansa did not think the GOS would have to request EU assistance to deal with recent flooding in the Southeast. He reported that heavy rains this August would affect negatively GOS wine production, whatever weather September might bring. --Vega: Further changes in Mobitel management over the coming several months might make a settlement with Vega more likely. For that reason he did not believe the situation would drag on for years in the courts. --Troubles in textiles industry: Previous government had allowed the continuation of subsidies to keep these industries afloat, when funds would have been more wisely spent in investments for retraining of employees to other, more viable industries and business. ¶10. (C) Comment: Asked what COM might deliver as a message from the GOS to his interlocutors in Washington, Jansa quickly responded, "Tell them that Slovenia is a friend and ally that will do what we can to support the United States." Jansa is a leader who understands that NATO membership means stepping up to contribute to stability in crises whenever it is needed. His doubling the GOS contribution to ISAF, commitment to triple Slovenia's contribution to KFOR by end of 2005, and scheduling an increase in its EUFOR contingent in Bosnia reflect this commitment. ROBERTSON NNNN 2005LJUBLJ00610 - Classification: CONFIDENTIAL v1.6.2