LOCAL ELECTIONS: BELLWETHER FOR HDZ GOVERNMENT

1. (SBU) SUMMARY AND COMMENT: Local elections on May 15 will
be dominated by county and city issues but are bringing to
light regional fractures within the ruling Croatian
Democratic Union (HDZ), as the party suffers the
repercussions of reforms made after the 2003 parliamentary
elections. This campaign is giving renewed national
confidence to the left-wing opposition Social Democratic
Party (SDP) and marks a rise in popularity of the far
right-wing Croatian Party of Rights (HSP), which contrary to
its international outreach (reftel) has campaigned in true
nationalist style. Despite frequent mentions by the HSP and
others of early parliamentary elections if the HDZ performs
poorly at the upcoming local polls, the governing coalition
remains stable and it will likely hold on to its current
one-seat majority no matter the results on May 15. END
SUMMARY AND COMMENT.

COALITIONS ARE KEY, STRANGE BEDFELLOWS LIKELY


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2. (SBU) The HDZ continues to pay the price of its move
toward the center following its victory in November 2003
parliamentary elections, losing some votes to the HSP of
disgruntled right-wingers opposed to such policies as
cooperation with the International Criminal Tribunal for the
former Yugoslavia (ICTY) and programs to support the return
of ethnic-Serb refugees. While these local elections will be
decided on city and county issues such as roads and jobs, the
HDZ will lose some votes to the left over undelivered
promises from the 2003 national campaign. Nevertheless, the
party's faithful core voters will likely give the HDZ about
25 percent of the total vote on May 15 (compared to a 34
percent finish in 2003 parliamentary elections).



3. (SBU) With this dip in HDZ popularity and gains for both
the left and the far-right, very few counties or cities will
be governed by any single party, resulting in a widespread
post-electoral coalition-building frenzy in late May and June
involving almost all possible party combinations. The
notable exception is the HSP, running alone in all
jurisdictions, which has publicly declared it will not join
in coalition with the Independent Democratic Serbian Party
(SDSS) due to ties of some party leaders to the wartime
government of Serb-occupied Croatia. (COMMENT: In contrast,
within mainstream parties, Serb names are appearing with
unprecedented frequency on traditionally Croat lists,
illustrating a growing political maturity. END COMMENT.)



4. (SBU) The two largest parties, the center-right HDZ and
center-left SDP, may hesitate to enter any coalitions as they
define the opposing ends of the Croatian political spectrum,
though this combination is possible if absolutely necessary.
Independent party lists are popping up like weeds, including
the Zagreb list of former presidential candidate and
Croatian-American Boris Miksic, but few are likely to be of
lasting significance. City and county governments not formed
within two months of elections face dissolution by the
central government and appointment of a state commissioner as
caretaker until a new election can be held.

OSIJEK AND ZAGREB ) SAMPLE BATTLEGROUNDS


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5. (SBU) The eastern Croatian city of Osijek represents the
most dramatic split of the HDZ, after the party in April
expelled local strongman and MP Branimir Glavas, one of the
few remaining high-profile, extreme hardliners. Glavas,
taking his loyalists with him, split the electorate into four
parts: Glavas, the HDZ, and two parties running separately
from an incumbent left-wing coalition that has held power for
more than ten years. Osijek election results and the
subsequent inevitable struggle to form a coalition will
determine the political future of this city, which has led
the Eastern Slavonia region in stability-ensuring reforms to
date.



6. (SBU) The campaign in Zagreb, which represents about 25
percent of the Croatian electorate, has been relatively low
key, with the HDZ running more of a tourist campaign than a
political one, avoiding conflict with the widely popular SDP
candidate former mayor Milan Bandic. Bandic, currently the
very visible deputy mayor, is likely to succeed in his
attempt to come back from the drunk driving incident and
various abuse of power accusations that drove him from the
city's top job in 2002. The SDP, however, will need a
coalition partner, and the natural choice, the Croatian
People's Party (HNS), has not forgiven Bandic his misdeeds
and has said it will not be part of a coalition with him at
the helm. This may leave the SDP to face that implausible

coalition with the HDZ or cobble together smaller partners
from the likes of the HSP, the pensioners' party, or any
independent lists that cross the five percent threshold.

NATIONALIST HSP SHOWS TRUE COLORS


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7. (SBU) Despite its concerted campaign to convince the
international community of its new centrist outlook, the HSP
has not demonstrated any departure from its nationalist roots
during the campaign. Party President Anto Djapic has spoken
openly against the government's hunt for fugitive Ante
Gotovina and its cooperation with the Hague Tribunal. He
also attended at least one campaign rally including the
screening of a war documentary with various scenes of Serbs
standing near burning houses and churches. Their guilt or
innocence is unclear, but the presentation included photos
drawn from the film and the message, "These are your
neighbors ) Recognize them." Unfortunately, Djapic's
rhetoric still holds appeal for a small portion of the
electorate, and the HSP will likely average around 10 percent
at local polls.



8. (SBU) Prior to the campaign, HSP officials indicated they
were expecting to be offered a role in the national
government, counting on exploiting ripples among the HDZ's
current coalition partners and planning to step in and save
the government during a vote of no confidence that might
follow a poor local elections performance. Throughout the
campaign, however, Djapic has refocused on pushing for early
national elections, likely hoping to increase the HSP's share
of parliamentary seats (currently 8) to leverage a greater
role in national government.



9. (SBU) However, the HDZ's key coalition members, the SDSS
and the pensioners' party, are unlikely to jump ship soon, no
matter the local electoral outcome. As the leading Serb
party, the SDSS will not want to bring down the government,
fearing ethnic backlash, while the pensioners will get more
for party members by staying in the coalition. The
opposition SDP, without which a vote of no confidence could
not succeed, has not joined Djapic's call for early
elections, preferring instead to wait for certain difficult
issues to pass. The SDP is reportedly forming a shadow
cabinet, perhaps planning a move after members pass the
two-years-in-office threshold in December to qualify for
parliamentary pensions.
FRANK


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