MACEDONIA: SCENESETTER FOR CODEL DREIER'S VISIT,

UNCLAS SECTION 01 OF 03 SKOPJE 001096

SIPDIS

SIPDIS
SENSITIVE

STATE FOR EUR/SCE (PFEUFFER)

E.O. 12958: N/A
TAGS: PGOV PREL PINR MK
SUBJECT: MACEDONIA: SCENESETTER FOR CODEL DREIER'S VISIT,
NOVEMBER 19-25



1. (U) Welcome to Macedonia! HDAC's assistance to
the Macedonian parliament, both the provision of IT
equipment and the opportunity for a professional visit to
the United States earlier this year, has made a real
contribution here. Your visit, nearly three months into
the new governmentQs mandate, comes at the right time both
to consolidate what has been achieved through the HDAC
program to date and to deliver some important messages to
the new Macedonian government (GOM).

CORE MESSAGES


2. We believe the GOM should:

--Pursue broad consultations and consensus-building with
opposition parties on key legislation and implementation of
reforms.

--Demonstrate through results your commitment to
implementation of the 2001 Framework Agreement (FWA),in
close consultation with opposition parties and parties not
in government.

--Work for broad political consensus to implement your
economic growth and reform agenda and to fulfill key
criteria for NATO and EU membership (including fighting
corruption in a non-partisan manner, combating trafficking
in persons, and ensuring Macedonia meets international
religious freedom standards).

POLITICAL CONTEXT -- DIALOGUE INCHES FORWARD


2. (SBU) The new inter-ethnic (ethnic Macedonian and ethnic
Albanian) governing coalition headed by Prime Minister
Gruevski was sworn-in on August 26. The government has
only just begun to implement some of its ambitious
legislative and economic growth agenda. Part of the reason
for the slow start is that the government has been unable
or unwilling so far to work effectively with the ethnic
Albanian DUI party, which won the majority of eAlbanian
votes in the July parliamentary elections but was not
included in the governing coalition.
(NOTE: Having won the majority of
eAlbanian votes, DUI considers itself "out of government"
but not/not in the opposition, and refuses to use the word
"opposition" to describe itself.) Also hampering progress
is the fact that the government has dismissed or
transferred and demoted many civil servants. While some
replacements are well-qualified, many newly-emptied
positions remain vacant, and some have been filled with
neophytes.


3. (SBU) The government and DUI have made pro forma efforts
to discuss their differences, but the dialogue has not
produced practical positive results. The GOM should
acknowledge that it must work differently with DUI which,
given its eAlbanian majority support, cannot be considered
just a "typical" opposition party. Consultation and
compromise with DUI on key legislative initiatives,
especially those related to the Framework Agreement (FWA),
must begin early on, and the government should demonstrate
flexibility and generosity in reaching consensus on those
initiatives. At the same time, DUI must show it can engage
in genuine dialogue and that it is prepared to reach
compromises before negotiations conclude; it cannot assume
it has veto power over legislative proposals.

FRAMEWORK IMPLEMENTATION -- MISSION NOT YET ACCOMPLISHED


4. (U) The new government has stated its commitment to full
implementation of the 2001 Framework Agreement (FWA) that
ended the inter-ethnic conflict in Macedonia that same
year. In fact, all FWA-related legislative requirements
have been met, most having been passed by the previous
government. Implementation of decentralization (the
devolution of power from the central government to local
governments),and of equitable representation of ethnic
minorities in public administration, were launched
successfully a year ago. The challenge for this government
is to build on what was achieved by its predecessor and to

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fully implement decentralization without excessive
partisanship in the allocation of jobs or funds. Several
FWA-related requirements -- including a law on languages --
remain to be completed, and the government must demonstrate
results in implementing FWA-related reforms.

NATO AND EU MEMBERSHIP -- REFORMS MUTUALLY REINFORCING


5. (SBU) The government has stated its commitment to NATO
and EU membership as top foreign policy priorities, and is
supported by opinion polls showing 90 percent or higher
public support for membership in both organizations.
Nevertheless, the difficulty the government has shown in
managing effectively intra-coalition and
government-opposition relations has hampered initial
progress on the rule of law, judicial reform, and other
political and economic criteria Macedonia needs to fulfill
to be considered a strong candidate for membership in
either organization.


6. (SBU) Macedonia could be a competitive candidate for a
NATO invitation at the next enlargement summit, given its
strong performance on defense reforms and its contributions
to NATO operations in Afghanistan. Government
interlocutors need to hear, however, that to achieve that
goal the GOM must work effectively with DUI to overcome the
current political impasse and find a mechanism for building
broad consensus with other opposition members for economic
and other NATO-related reforms. In addition, the
government must show concrete results in fighting
corruption in a non-partisan manner, redouble efforts to
combat trafficking in persons, and pass a religious freedom
law that guarantees religious communities and groups the
right to register and worship freely in Macedonia. (The
current law, while enforced unevenly, allows the GOM to
limit the number of confessions that can register as a
religious community or group. As a result, although the
Macedonian Orthodox Church is registered as a religious
community, the Serbian Orthodox Church cannot legally
register as either a religious community or group.)


7. (SBU) Although Macedonia received EU candidate status in
December 2005, it has yet to receive an invitation from
Brussels to begin accession negotiations. The government
received an assessment from the EU in early November on its
progress in meeting the EU acquis. That EU assessment
pointed to the need for political consensus in pursuing
reforms, especially in police and judicial reforms;
continued implementation of the FWA; and the need to show
results in combating corruption, as some of the challenges
the country will need to overcome before it can expect to
begin accession negotiations in the future.

KOSOVO FINAL STATUS -- BORDER DEMARCATION AS PART OF FINAL
STATUS SETTLEMENT


8. (SBU) The government's position on Kosovo final status
has been closely aligned with ours -- support for UN
Special Envoy Ahtisaari and the Contact Group, for a
settlement as soon as possible, and for resolution of the
demarcation of the Macedonia-Kosovo border in the context
of a final status settlement. (NOTE: The border was
delineated, but not demarcated, in a 2001 agreement between
Belgrade and Skopje, which Pristina rejects.) The
government has indicated it would be among the first to
recognize an independent Kosovo in the event the border
demarcation issue is resolved as part of a final status
settlement. Relations overall are good, with regular
meetings between Skopje and Pristina and an interim free
trade agreement signed between Macedonia and UNMIK/Pristina
in 2005. We encourage the government to continue its
constructive support for the final status process, and to
continue to adhere to the position that the border
demarcation issue should be resolved in the context of a
final status settlement.

NAME DISPUTE -- CONTINUE UN PROCESS


9. (SBU) Discussions between Greece and Macedonia on the
dispute over the latter's right to use its constitutional

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name -- Republic of Macedonia -- continue under UN
auspices. The GOM has reiterated its "dual name" proposal
(a mutually agreed upon name for use in bilateral relations
with Greece, and the constitutional name for all other
bilateral relations and for use in multilateral fora) as
the basis for further discussions with the Greek
government. Athens has rejected that proposal. The USG
recognized Macedonia's constitutional name in 2004 for use
in our bilateral relations. We continue to urge both sides
to be flexible and to work toward compromise on this
sensitive issue through participation in the talks under UN
auspices in New York.

ECONOMIC GROWTH -- NEED STABLE POLITICAL BASE


10. (SBU) PM Gruevski's top-priority goal is fostering
economic growth and development, a goal we share. The GOM
is aiming for a 6-8 percent annual GDP growth rate during
its mandate, compared to the 4.0 to 4.5 percent rate it
inherited from the previous government. The government
hopes to achieve that growth rate through tax cuts and a
flat tax, through fiscal stimulus, and by attracting
foreign direct investment. Overall, the macro-economic
climate remains positive, with low inflation and a stable
exchange rate. A US firm (Milwaukee-based Johnson
Controls) recently broke ground for the first major
greenfield investment in Macedonia's free trade zone near
Skopje, a promising investment "coup" for Macedonia.
Nevertheless, the government should accept that more robust
economic growth requires the political stability that will
accompany improved inter-ethnic relations and a more
consensus-based approach to implementing reforms.
MILOVANOVIC