CROATIA ACCELERATING ON NATO-READINESS

C O N F I D E N T I A L SECTION 01 OF 04 ZAGREB 000113

SIPDIS

SIPDIS

DEPARTMENT FOR EUR/SCE, EUR/RPM
NSC FOR BRAUN
DEFENSE FOR OSD/POLICY:WINTERNITZ

E.O. 12958: DECL: 01/27/2015
TAGS: NATO PREL HR
SUBJECT: CROATIA ACCELERATING ON NATO-READINESS

REF: SECSTATE 7173

Classified By: Ambassador Ralph Frank, reasons 1.4 (b) & (d)

SUMMARY and COMMENT
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1. (C/REL NATO) The political and military elite of Croatia
believe they are ready to join NATO today. However,
government efforts to educate the general public about why
NATO is important to Croatia have been slow to get started.
The GoC has developed a NATO-membership driven strategic
defense policy, even while focusing over the past two years
on advancing its EU candidacy. Defense reforms for NATO
interoperability have continued despite the ASPA-mandated
cut-off of U.S. FMF and IMET programs in 2003. The armed
forces are slightly behind their own aggressive MAP-driven
reform schedule but accelerating efforts to meet the GoC goal
of being NATO-ready by the time the Alliance is ready for
them ) widely expected here in 2008. Political and economic
reforms )- both NATO and EU-driven -) are deeply entrenched
and have moved Croatian society far down the path of
resolving remaining issues from the bitter breakup of
Yugoslavia.


2. (C/REL NATO) In response to reftel request, post provides
this overview of Croatia's preparations to become a full NATO
member. In each section, post suggests messages for GoC
interlocutors that will help us in our efforts to move
Croatia further towards finishing its preparations to become
a full, effective, and welcome member in NATO. END SUMMARY
and COMMENT.

POLITICALLY READY
--------------


3. (SBU) Over the past five years, center-left and
center-right governments have supported political, economic,
and defense reforms to prepare Croatia for NATO membership.
Over this same time, Croatia has made significant progress in
meeting NATO political criteria. Democracy is well rooted in
Croatia with all six rounds of elections since 2000 (two
iterations each of presidential, parliamentary, and local)
judged generally fair and free of serious irregularities.


4. (C/REL NATO) Rule of law is also considered
well-entrenched, although successful reforms of the Police
and Prosecutors offices have not yet been fully matched by
progress on efforts to reform the judiciary. The December
2005 arrest of ICTY indictee Ante Gotovina was preceded by
two years of improvements in ICTY cooperation and local
adjudication of war crimes cases. Preparations are underway
to try two Croatian generals, Mirko Norac and Rahim Adehmi,
in local courts in the first-ever case transferred to local
jurisdiction from the ICTY. Organized crime remains a
problem for a law enforcement community inexperienced in such
complex cases, but there is little indication that criminals
or criminal groups exert significant influence on politicians
or political parties.


5. (SBU) Minority rights are protected at the national level,
although discrimination and resistance to change in some
communities are persistent challenges. The HDZ government
has made significant progress on refugee returns based on its
December 2003 coalition agreement with Serb partners.
International observers such as the OSCE and UNHCR have
praised the government's pace of reconstruction of
war-damaged housing and return of refugee property. As
suggested by the OSCE, UNHCR, and the European Commission,
the Government has created a "road map" with the goal of
closing the refugee file in 2006. Of the estimated 350,000
people, mostly ethnic Serbs, who were displaced during the
war, about 134,000 have returned. A recently completed UNHCR
re-registration project concluded that approximately half, or
110,000, of the remaining refugees and internally-displaced
persons remain interested in returning to Croatia.


6. (SBU) The GoC has developed largely good relations with
its neighbors, including exchanging high-level visits,
opening visa-free travel and concluding free trade
agreements. Border demarcation remains a sticky issue with
Slovenia, likely resolvable only by international arbitration
as proposed by Croatian but resisted by Slovenia. Border

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management has been fully demilitarized. Notwithstanding
significant U.S. support and EU investment, Croatia's
geography will continue to provide a potential target for
traffickers in persons, contraband, and possibly, WMD
materials and delivery systems. Croatia has made good
progress in firming up its export control system and has
moved up on the U.S. Trafficking in Persons evaluation from
Tier 2 Watch List to Tier 2.

Suggested Messages:

- Welcome progress achieved in advancing rule of law,
protection of minority rights, refugee return.

- Important that you keep up pace in implementing judicial
reform, advancing fight against organized crime, and closing
out refugee return issue.

ECONOMY GROWING BUT SOME RESOURCES MISALLOCATED
-------------- --


7. (SBU) Although Croatia suffers more than its fair share of
mostly self-inflicted economic ills, the market orientation
of its economy is firm. The last six years have seen sound
monetary policies that have resulted in general macroeconomic
stability, with modest inflation and steady, albeit somewhat
lackluster GDP growth by transitional economy standards (3.8%
in 2005). Nevertheless, with per capita GDP estimated by the
World Bank at $6,590 in 2004, Croatia is wealthier than all
but two (Slovenia and Estonia) of our seven newest NATO
Allies.


8. (SBU) Like many European countries, Croatia has a negative
demographic trend and a huge number of pensioners -
approximately 1 for every 1.4 people employed. Combined with
a bloated state sector, all of this adds up to tight budgets,
as the IMF and others have pushed the government to reduce
deficits and borrowing.


9. (C/REL NATO) Defense spending (both in nominal terms and
as a percentage of GDP) has declined for three straight
years. However, the downward trend has been reversed in
2006, with Defense spending rising slightly in nominal terms
despite tight budgets, and now stands at approximately 1.8%
of GDP. President Mesic has publicly supported MoD plans for
future budget increases. The MoD is now attempting to
leverage the eventual Sabor (parliament) approval of the Long
Term Development Plan for the Armed Forces to secure
political commitments for obligatory 2% spending beginning in

2010.


10. (SBU) With EU membership now on the horizon, Croatia's
economic prospects appear to be brightening. However, this
will depend on whether or not the government can carry
through on reforms to reduce the state's role in the economy
and deliver results on measures to streamline bureaucracy and
attract needed foreign investment.

Suggested Messages:

- Understand you face pressures to set priorities for
government expenditures.

- Welcome plans to raise defense spending to 2% of GDP by

2010.

- Urge you to look at ways to meet that objective earlier to
enable broader achievement of NATO readiness for your armed
forces.

DEFENSE CAPABLE BUT PLAYING CATCH UP ON REFORMS
-------------- --


11. (C/REL NATO) The President and Government have approved a
Strategic Defense Review (SDR) that builds Croatia's security
and defense posture around the premises that: 1) it has no
near term threats from its neighbors; 2) it will soon be a
full participant in collective defense through NATO; and 3)
that the major threats it faces are from terrorism, organized
crime, and WMD proliferation. The Ministry of Defense (MoD)
had made significant progress in advance of the SDR in
reforming and downsizing the Croatian Armed Forces (CAF). A
Long Term Development Plan is now being finalized which will

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further resize, restructure, and reequip the CAF.


12. (C/REL NATO) Significant progress has been made in
reducing the number of personnel on active duty,
restructuring forces and decreasing the size of the military
infrastructure. The CAF is constantly improving its
interoperability with NATO and Partner forces by: 1)
stressing English-language capability throughout the officer
and senior NCO corps, utilizing its U.S. and UK sponsored
language laboratory for small group training and self-study;
2) gaining valuable multilateral operational experience
through increasing participation in NATO-led operations and
assuming positions in NATO staff structures, while
participating in over 474 Partnership events and other
bilateral exchanges in 2006; and 3) working diligently on
production of SOPs and procedures in compliance with STANAG
standards.


13. (C/REL NATO) The planned tripling of the HR ISAF
contingent in Afghanistan in 2006 demonstrates Croatia's
commitment to increased participation in NATO-led Peace
Support Operations out of theater. In addition, the MoD is
planning and budgeting for further increases in the ISAF
contingent in 2007-2010, as well as unit level participation
in UN missions around the world. MoD planners are satisfied
with the current defense budget and projections for future
growth. Consequently, ambitious procurement and production
programs are planned for the coming years, including APCs, a
replacement air policing capacity, and new naval craft for a
coast guard mission.


Suggested Messages:

- Welcome contributions to ISAF and UN PKOs ) you soon will
have almost 200 persons deployed worldwide.

- Note to achieve current NATO member average of 6% of armed
forces deployed, would need to increase worldwide deployments
to 1000 as you finish downsizing.

- Understand the desire to have broad capabilities in air,
land & sea operations.

- Should focus your resources on deployability/expeditionary
capability.

- Need to plan for transport and sustainment for future
operations.

LEGAL: DON'T TOUCH THE CONSTITUTION
--------------


14. (C/REL NATO) The GoC is still evaluating the legal
implications of NATO membership. The Croatian constitution
creates a dual chain of authority over defense and foreign
policy. The constitution (article 7) requires parliamentary
authorization of military deployments outside of Croatia
except for exercises with international defense organizations
of which Croatia is a member. In practice, President Mesic
has been zealous in defending his prerogatives as commander
in chief of the armed forces and sets the terms of debate for
most military issues, including deployments. To date, where
presidential support is forthcoming, parliamentary
authorizations have been routine, except in rare cases where
the GoC failed to count votes properly. Opening the
constitution to reform would raise issues of Presidential
authority. Post suggests that we avoid raising this issue at
this time, until the GoC has completed its analysis.

SECURITY/INTEL: NO OBSTACLES
--------------


15. (C/REL NATO) The Military Security Agency (known by its
Croatian acronym ) VSA) has provided a copy of a draft
General Security of Military Information Agreement (GSOMIA)
for consideration by the US DoD. It is currently being
reviewed in Washington. The Croatian MOD continues to
develop the policies and procedures necessary for protection
of NATO-classified documents. Post believes the GoC has this
issue well in hand and there is no need to raise it at this
time.


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PUBLIC SUPPORT: NEED TO FRAME THE DEBATE
--------------


16. (SBU) Political parties across the spectrum support
Croatia joining NATO. However, most Croatians do not have a
good understanding of NATO and consequently do not know why
their country should join the Alliance. While polling data
can be problematic, recent polls indicate that 30-40 percent
of respondents favor Croatia joining NATO. Encouragingly,
GoC polling indicates that while support for membership has
fluctuated, outright opposition to membership has been stable
at around twenty percent. Larger numbers of respondents, up
to 60 percent, indicate to pollsters that they do not know
very much about NATO or what membership would mean for their
country. In a recent poll of 1000 Croatians, more young
people between the ages of 18 and 34 (46.8%) supported
joining the alliance than did older generations, those
between 35 and 55 (38.6%).


17. (C/REL NATO) The GoC has been opportunistic, but not
systematic in its efforts to educate the public about NATO
membership. The GoC has explained that up to now, without a
set entry date it is difficult to build a public awareness
campaign. With the expectation of an invitation in 2008 now
discussed in public, the Foreign Ministry has begun to
develop a program of action. The military have avoided
public education activities out of concerns that advocacy
could be perceived as undermining civilian control over the
military. Current GoC plans focus on regular high-level
events to stimulate public and media interest in the issue.
The GoC has also launched a special NATO web page, well
fleshed out with NATO background material. The GoC needs to
craft and disseminate messages that reach out beyond elite
audiences to rebuild grass-roots level support for membership
in advance of any short term campaign tied to a referendum or
parliamentary vote on membership.

Suggested messages:

- Glad we're able to use my team's visit to raise public
awareness on NATO issues. Know Ambassador Frank's team has
been working at all levels to explain NATO to average
Croatian.

- Know you do a great job with events aimed at educating
Allies about Croatia's preparations for NATO.

- Is concern in Alliance that public debate in Croatia is
dominated by small fraction that misrepresents what the
Alliance is and what it means for Croatia.

- Cannot wait until 2008 to launch public education campaign.

- Urge you to get started now on broad, grass roots campaign
to get facts out in public.

- Need to build base of support now to show Allies that all
of Croatia wants to join.
FRANK