MY YEAR-END MEETING WITH PM KOSTUNICA

C O N F I D E N T I A L SECTION 01 OF 02 BELGRADE 002004

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/13/2016
TAGS: PREL PGOV MARR PBTS SR
SUBJECT: MY YEAR-END MEETING WITH PM KOSTUNICA

Classified By: Ambassador Michael C. Polt, reasons 1.4 (b,d)


1. (c) SUMMARY: I used my final meeting of the year with
PM Kostunica to challenge him to do more to support our
growing mil-mil relationship, to follow through on his
government's commitments to key US investors and restitution
claimants, and to urge him to provide reassurances of his
commitment to engage constructively with us on Kosovo status
implementation and its aftermath. His responses included a
mild criticism of Tadic's appointment of General Ponos as
CHOD and close adherence to his well-worn Kosovo points -
that compromise is the only sustainable solution and Serbia
is counting a growing list of European allies in this cause.
His approach to my economic concerns was more positive,
though, and the overall tone of the meeting was not
confrontational. In short, the PM seems rather content
heading into the holidays that he can engage in a low-key way
on defense issues, stall on Kosovo, and focus on controlling
a truncated election campaign season after the lengthy local
holiday break. End summary.

DEFENSE ISSUES


2. (c) This meeting was my first opportunity to engage
face-to-face with Kostunica since the PfP invitation. I
reiterated our happiness at the outcome and reinforced to the
PM our caution that Serbia not misinterpret the important
gesture as anything other than what it is - a desire to
reward defense reform, encourage greater efforts on ICTY, and
support Serbia's democratic leaders at a critical moment. I
told Kostunica that we would look to him to support a
Presentation Document that clearly reiterates Serbia's
commitment to full ICTY cooperation and to constructive
engagement on the Kosovo settlement issue. I also
congratulated him on the long-overdue appointment of General
Ponos as Chief of the General Staff, noting the important
effect this would have on military morale and clarity of
command. Finally, I asked him to weigh in with the Justice
Ministry to break the logjam that has held up the
implementation of the GLOC for months, with an eye to having
it ready for signature by ADM Ulrich at the MLO opening on
December 18.


3. (c) Kostunica agreed that PfP was an important step
forward in Serbia's relationship with the EuroAtlantic
community. He said PfP was important on its own merits, but
also as a precedent for relations with the EU, as it signaled
the failure of the policy of conditionality. On the Ponos
appointment, the PM appeared mildly put off, but not overly
concerned. He said a better solution would have been to wait
on such important decisions until after the authorities of
the CHOD, the President, and the MoD had been codified in
legislation under the new constitution - a process he said
would have taken only a few months following elections. As
it is, he noted, these decisions were taken in a legal vacuum
and were therefore problematic. He said he recognized the
enormous political pressure the election campaign created for
Tadic to make the appointments, but regretted that the
president hadn't been more circumspect. He assured me,
though, that he would not make a public issue of this.
Kostunica promised to look into the GLOC issue, but did not
respond to my comments regarding the Presentation Document.

ECONOMIC ISSUES


4. (c) I congratulated the PM on Serbia's intended signing
of the CEFTA, noting our full support for this important
regional initiative. I noted, though, that a number of key
investors, including especially Phillip Morris, had
complained that the CEFTA would have a significant negative
impact on their sustainability, noting that many of the
calculations on which they had based their investment
decision had been seemingly undone in CEFTA. I encouraged
Kostunica to find a way to allay Phillip Morris' concerns so
that this important investor and employer could continue to
be a "poster child" for investment in Serbia. I also took
the opportunity to raise once again the standing request from
US Steel that the Serbian government make good on its
long-standing pledge to build a rail spur from the river to
the mill. Finally, I asked the PM to look closely at pending
restitution legislation, which currently would protect the
interests of Milosevic cronies who were awarded state and
private expropriated assets as political favors. I told him
unequivocally that Serbia's legislation should look to
protect the original owners, not those who profited from
their loss. On all these issues, Kostunica promised to
engage actively, and to follow up with Minister Parivodic to
push for suitable resolution.


BELGRADE 00002004 002 OF 002


KOSOVO


5. (c) Acknowledging that we had different expectations of
the Kosovo status outcome, I urged Kostunica to reassure me
and the international community that, however status resolved
itself, the Prime Minister and his government would work
actively and cooperatively with the international community
to ensure responsible consequence management. I told him
that meant more than promising not to stir up unrest; it
meant to pledge to work actively with us to defuse tensions,
prevent forced migrations, and to react quickly and
appropriately to violence or potential violence. Kostunica
responded that he still hoped for a compromise solution, and
said Serbia remained willing to engage constructively on any
solution that is in keeping with international law. He noted
that Serbia has a growing list of supporters in Europe who
also prefer a negotiated settlement to an imposed solution.
He noted that the main danger of violence is not north of the
Ibar, but south, and pointed out that it has not been Serbs
undertaking violence so far.

ATMOSPHERE


6. (c) My conversation with the PM was friendly, despite
our clear differences on Kosovo and military reform. He
appeared comfortable with where the government and his party
are on the eve of elections, and was unworried that a lengthy
holiday pause would mean a truncated election campaign
season. Kostunica only became animated when conversation
turned to the recent visit of Serbia air force pilots to
Aviano AFB to fly F-16's. I noted the positive press this
and the previous USAF visit to Batajnica had garnered, noting
it as perhaps an indication of Serbia starting to put the
past behind it. Kostunica bristled at this, sharply
criticizing the Batajnica visit as premature and
inappropriate for the same unit that bombed Serbia to be
visiting the country. He was very clear that it is still
"too early to put history behind us...no one will ever
celebrate March 24 as a holiday in Serbia." I told him I
disagreed that it was too early to look forward, and noted it
was important now to forthrightly assess Serbia's recent past
and its relationship to the U.S. and the international
community. I closed with the view that this relationship had
to be based not simply on convenience or mutual gain, but on
shared values which both sides were ready to proclaim. We
wished each other happy holidays.
POLT