OPPOSITION ALIVE AND KICKING, BUT POWER CAN WAIT

UNCLAS ZAGREB 000159



SIPDIS



SENSITIVE

SIPDIS



E.O. 12958: N/A

TAGS: PREL, PGOV, HR

SUBJECT:OPPOSITION ALIVE AND KICKING, BUT POWER

CAN WAIT



Sensitive but unclassified, please handle

accordingly.



REF: 05 ZAGREB 1978



1. (SBU)SUMMARY AND COMMENT: After more than a

year of discord within the opposition, the

parties of the former center-left coalition

government are beginning to overcome differences

and rekindle old partnerships. The Croatian

Peasant Party (HSS) and the Croatian People's

Party (HNS),the junior partners in the former

coalition, appear to have ended brief flirtations

with the ruling Croatian Democratic Union (HDZ).

While still not formally allied, the HSS, HNS and

opposition-leading Social Democratic Party (SDP)

are now acknowledging, either publicly or

privately, that they depend upon one another as

political partners.



2. (SBU) The SDP continues to grow in popularity,

having surpassed the HDZ in recent credible

polls. Despite signs of internal turmoil, the

Social Democrats continue to serve as the primary

political alternative. However, the party needs

more time to link up with its membership before

it defines a clear strategy in anticipation of

parliamentary elections due in 2007. The HSS is

trying to make the best use of new energy gained

after the change of party leadership in December

(ref A) and let the public know it is about more

than just peasants. While the party shares some

core conservative values with the HDZ, insiders

say they are more likely to coalesce with the

SDP, though only after elections. The HNS is

trying to fight its new reputation as a regional

party, but to little effect, as it is promoting

strong figures from - one region.



3. All of these "traditional" opposition parties

seem content to allow the current government to

serve out its mandate through 2007. However, in

anticipation of the electoral struggle to come,

they feel it is time to begin showing their

differences with the ruling HDZ in more

unambiguous terms than they did during the

government's first two years in power. END

SUMMARY AND COMMENT.



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SDP - BETWEEN GROWING SUPPORT AND INTERNAL

CHALLENGES

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4. (SBU) Rumored for a time to be forming a

"shadow cabinet" to formalize their criticism of

the GoC, the Social Democrats have instead

maintained a relatively modest profile as

Croatia's main opposition party. While

occasional and sometimes pointed criticisms of

the GoC emerge from the party's policy advisory

committees, SDP Secretary General Igor Dragovan

told PolOff in January that the party doesn't

plan a centralized anti-government campaign yet.

He admits that the SDP is not ready for early

elections. Instead, the leadership is engaged in

a dialogue with its rank and file to determine

the best electoral strategies. The SDP is almost

certain not to enter into pre-election

coalitions, but expects the HSS and HNS to be

their partners after elections. The recent

breakup of an "unprincipled" coalition with the

nationalist Croatian Party of Rights (HSP) in the

Zagreb-area town of Velika Gorica suggests that

the SDP is unlikely to accept partners from the

right end of the political spectrum in the

future.



5. (SBU) Although the latest polls place them

ahead of all other parties - including the ruling

HDZ, the SDP still suffers from occasional

shakeups within. For one, its city and county

chapters in Sibenik in central Dalmatia have been

disbanded amidst infighting and disagreements

with party headquarters in Zagreb and are being

rebuilt under Dragovan's personal supervision.

Similarly, the party's popular but wayward Mayor

of Zagreb, Milan Bandic, has been criticized for

excessive friendliness with the PM and his

government. Although Bandic's style is often

described as autocratic, his popularity comes

from his image as a man who gets things done.



Consequently, he has grown to become a national

figure whose popularity ratings approach those of

Croatian President Stjepan Mesic and exceed SDP

President and former PM Ivica Racan.



6. (SBU) Yet Dragovan does not see Bandic as

Racan's successor at the helm of the SDP, much

less as the President of the Republic, which

observers believe will be his next political

ambition. Dragovan maintains that Bandic lacks

party support beyond his Zagreb base and has been

too controversial to last through a presidential

campaign. Dragovan thinks that Racan's deputy

Zeljka Antunovic has better chances to replace

Racan when the time comes, likely at the 2008

party convention. Other possible candidates

include Zvonimir Mrsic, the Mayor of Koprivnica,

Davorko Vidovic, the former labor minister who

until recently governed the City of Sisak, and

Ivan Ninic, the former chief of the disbanded

chapter in Sibenik who is viewed as the most

leftist of prominent SDP members.



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HSS - "NEW AND IMPROVED"

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7. (SBU) Peasant Party Secretary General Stanko

Grcic told PolOff in January that the long-

awaited change of party leadership in December,

when county prefect Josip Friscic succeeded party

president Zlatko Tomcic, does not reflect a shift

in the general direction of HSS policies. In

spite of earlier expectations that the new HSS

leadership would move more to the right and

therefore closer to the HDZ, Grcic estimates that

as many as 80 percent of the HSS membership

prefer the SDP to the HDZ as a coalition partner.



8. (SBU) Instead, the party views the change of

leadership as a chance for rebirth. Despite the

peasant moniker, Grcic points out, the HSS boasts

one of the youngest and most highly educated

party leaderships in Croatia (the average age is

45, including many with doctoral and master's

degrees). To help spread the renewed energy of

these leaders, Friscic has adopted a policy of

officially encouraging inter-chapter competition.

As opposed to the earlier policy of regional

balancing, the new rules give seats in the party

presidency to the five county chapters with the

largest number of elected offices, alongside the

president and five regional leaders. Friscic is

expected to rely on the other members of the

presidency much more than his predecessor, who

tended to make all the important decisions by

himself.



9. (SBU) Like the SDP, the HSS stresses the need

for dialogue with its party base, which was

presumably neglected during Tomcic's presidency.

Grcic thinks that new president Friscic's

background as a county prefect, i.e. a person

coming from outside Zagreb, will help restore

communication with the rank and file. With its

traditional voters on the farm becoming less and

less numerous, the HSS will have to appeal to

other social groups, primarily to the working

class. In doing that, the party will focus its

political activity on domestic issues, such as

health, welfare, pensions, judiciary and,

obviously, agriculture.



10. (SBU) The HSS is also against pre-electoral

coalitions, Grcic explains, because running alone

is the only way to assert any party's real

strength. He views the SDP and the HNS as

natural partners in a new government, and is

against cooperation with the HSP and the Croatian

Social Liberal Party (HSLS),which he views as

"commercial" parties interested only in money and

high positions. He expects the disenchanted

moderate voters of the HDZ -- but also those of

the HSP -- to find the "new and improved" HSS

appealing.



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HNS - THE BIG AMBITIONS OF A "REGIONAL" PARTY

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11. (SBU) The May 2005 local elections brought

the People's Party prefectures in the two



northernmost counties, but also the loss of power

in Zagreb, its main power base to date. This

fact left some observers with the mocking but not

completely misplaced conclusion that the HNS has

become a regional party. Of course, HNS leaders

counter this logic with the argument that the

party has never before held so many elected

offices. While this is true, party leaders have

far greater expectations than the modest six

percent that credible polls have been giving it

in recent months.



12. (SBU) During the second half of 2005, HNS

officials kept hinting that they would not mind a

coalition with the HDZ, now that the ruling party

had adopted "their" democratic standards. Asked

whether the party would prefer the SDP or the HDZ

as a coalition partner, HNS President Vesna Pusic

repeatedly said the party was focused on a

"mandate" for prime minister rather than on

coalition partners. HNS Central Committee

President Radimir Cacic, the party's candidate

for a prime-ministerial mandate, publicly stated

in late 2005 that he would prefer Ivo Sanader of

the HDZ to Ivica Racan of the SDP as a partner.

However, at the beginning of 2006, the HNS has

returned to the view that the HDZ has not done

enough, especially in terms of economic

development.



13. (SBU) Economic development, especially

regional development, is what the HNS will try to

promote through its political activity. HNS

parliamentary caucus leader Dragutin Lesar told

PolOff in late January that the party had sent to

parliament a number of bills aimed at financial

decentralization of the country. The HNS

proposes that all profit taxes go to the state,

since a vast majority of companies are registered

in Zagreb anyway. On the other hand, income tax

would be distributed regionally to help finance

the growing number of unfunded mandates facing

local governments.



14. (SBU) By turning to the strong personalities

of Varazdin County Prefect Radimir Cacic, who is

perceived as a businessman rather than a

politician, and Dragutin Lesar, who spices his

hard work in parliament with bare-knuckles

populism, the HNS appears to be distancing itself

from the professorial style of Pusic, who often

comes across as aloof. At the same time, by

relying on two strong individuals from the same

region, the HNS risks proving the point that it

has indeed become a regional party, and as such

only a second-rate player.



FRANK