GOS: SUPPORTIVE OF RELIEF FOR IRAQ BUT STYMIED BY

UNCLAS LJUBLJANA 000722 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ECON EFIN IZ SI SUBJECT: GOS: SUPPORTIVE OF RELIEF FOR IRAQ BUT STYMIED BY THE PAST REF: SECSTATE 181094 ¶1. (U) SUMMARY. The Government of Slovenia (GOS) is supportive of assistance to Iraq but regional issues prevent them from making any commitment to providing debt relief. Most of the debt owed to Slovenia, estimated at $205 million, was incurred before the breakup of the former Yugoslavia. Until issues surrounding succession and fiscal apportionment are resolved amongst the former Yugoslav countries, no bilateral commitment to debt relief can be made by the GOS. The GOS could not provide a timeline when they thought succession talks would conclude. END SUMMARY. ¶2. (SBU) Econoff delivered demarche on November 8 to MFA official Blaz Masle. Masle explained that there are several layers of complications for the GOS regarding debt relief for Iraq. Because the debt was incurred while Slovenia was still part of the former Yugoslavia, structural decisions regarding succession must be determined before other decisions can be made. The Iraqi debt held by Slovenia was estimated in 1992 to be about $205 million, as claimed by Slovenian enterprises. The GOS bought debt from the Slovenian companies who could provide requested documentation. This amount came to $1 million. The figures are not exact and more efforts will have to be made to get better data. He said that the GOS has not made much progress on succession talks so there has been no serious discourse on debt relief. Finally Masle said that the issue of succession and Iraqi debt relief is a multi-ministerial effort and he would share our concerns and requests with other ministry officials involved in the decision-making process. ¶3. (SBU) Embassy Ljubljana contacted Andrej Kavcic, head of the international department at the Ministry of Finance, for more information regarding the succession talks and commitment to Iraqi debt relief. Kavcic explained that the Coordinating Committee, comprised of the Ministries of Finance, Justice, Foreign Affairs, Bank of Slovenia and experts, is responsible for creating a plan for debt relief. Currently there are two options that are being considered: either to follow the Paris Club proposal of 80% debt relief or relieve the debt as commercial debt. Kavcic also reiterated that nothing could be done on this issue without proper data and a conclusion to succession talks. He added that Belgrade's refusal to cooperate on sharing federal data is hindering progress on succession. ROBERTSON