1. (SBU) SUMMARY AND COMMENT: While the annual summer
political rhetoric about Croatia-Slovenia border
disputes is as predictable as the flood of tourists to
the coast, this year GoC officials have increasingly
indicated that international arbitration is the only
solution they will accept. A mid-summer Government of
Slovenia "White Paper" on border issues was panned by
the Croatian MFA as a stalling tactic that makes the
Slovene position more radical - moving the two sides
farther apart.



2. (SBU) While MFA Chief Legal Advisor Andreja Metelko-
Zgombic is still drafting a "Blue Paper" promised by PM
Ivo Sanader to outline Croatia's position on the border
with Slovenia, she told PolOff earlier this month that
she sees no possibility of resolving the border dispute
bilaterally. "There is no common ground," she said.
She cited the GoS's broad distribution of the "White
Paper" to foreign embassies as a sign the GoS is
attempting to leverage its support for Croatia's EU
candidacy to gain territorial concessions, but said the
GoC is ready to hold out for arbitration. END SUMMARY
AND COMMENT.

NO COMMON GROUND ON DISPUTED LAND BORDER


--------------------------





3. (SBU) Border questions made the local press again
August 29 after Slovene police reportedly attempted to
stop Croatian construction crews working on a road to
the jointly-operated Hotiza border crossing point near
the Mura River. This followed Slovene complaints in
July that Croatia had constructed a bridge over the
Mura on what they claimed was Slovenian territory
without their consent. Metelko-Zgombic dismissed the
complaints as local politics, citing the fact that GoS
signed a bilateral agreement acknowledging that the
joint border post was on Croatian territory (making a
bridge and road approaching from the Croatian side also
Croatian) and only spoke up about the bridge after
Croatia completed construction.



4. (U) The problem with the area around Hotiza, like
many listed as disputed in Slovenia's "White Paper,"
lies with shifting river flows. Changes in the path of
rivers like the Mura, used as natural border markers at
various times in the past, have left both countries
with property from their land registries on the far
side of the river.

SEA BORDER: BIGGER AND STICKIER


--------------------------





5. (SBU) The dispute over Piran Bay and Slovenia's
access to the high seas remains central to border-
related difficulties, though Metelko-Zgombic remains
confident that a straight interpretation of the Law of
the Sea favors Croatian views. She complained that the
GoS's "White Paper" contradicted the Memorandum on
Piran Bay ratified by the Slovenian Parliament in 1993,
which acknowledges that Slovenia has no grounds to
declare any exclusive zones in Piran Bay as it
ostensibly does in the "White Paper." Metelko-Zgombic
added that the "White Paper" did not even mention the
agreement initialed by the former coalition government
of Ivica Racan, but never ratified by the Croatian
parliament, that would have granted Slovenia a corridor
to the open sea. While Slovene officials have often
pointed to this agreement in the past as a starting
point (despite Croatian assertions that it is not
revivable), Metelko-Zgombic said GoS claims now go well
beyond the Racan agreement.

POSTURING FOR ARBITRATION


--------------------------





6. (SBU) With increasing talk of arbitration, the GoC
may be engaging in its own campaign to protect itself
from EU-related pressure from Slovenia and a push for
arbitration before membership. PM Sanader is on record
as saying that the border should be settled through
international arbitration. According to Metelko-
Zgombic, the GoC would prefer arbitration through the
International Tribunal for the Law of the Sea for the
maritime dispute. Slovenia, however, stipulated that
it could not be forced to accept arbitrated sea borders
when it signed the Law of the Sea Convention. The
GoC's second choice, Metelko-Zgombic said, is the
International Court of Justice, which could arbitrate
both land and sea borders. Failing that, the GoC would
also accept third-party arbitration.
BRADTKE