Identifier
Created
Classification
Origin
07BELGRADE651
2007-05-14 11:48:00
CONFIDENTIAL
Embassy Belgrade
Cable title:  

ENGAGING WITH SERBIA'S "NEW" GOVERNMENT

Tags:  PGOV MASS EINV ICTY SR 
pdf how-to read a cable
VZCZCXRO4150
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHBW #0651/01 1341148
ZNY CCCCC ZZH
O 141148Z MAY 07
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0810
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
C O N F I D E N T I A L SECTION 01 OF 03 BELGRADE 000651 

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/14/17
TAGS: PGOV MASS EINV ICTY SR
SUBJECT: ENGAGING WITH SERBIA'S "NEW" GOVERNMENT

Classified by Ambassador Michael Polt, reasons 1.4 (b,d)

C O N F I D E N T I A L SECTION 01 OF 03 BELGRADE 000651

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/14/17
TAGS: PGOV MASS EINV ICTY SR
SUBJECT: ENGAGING WITH SERBIA'S "NEW" GOVERNMENT

Classified by Ambassador Michael Polt, reasons 1.4 (b,d)


1. (c) The new government in Serbia does not look appreciably
different from the previous one, save Tadic's DS party's
participation. Tadic's party now plays a large role and holds
competencies in defense and foreign affairs that could have an impact
on moving forward the Euro-Atlantic agenda, but Kostunica still holds
the reins. DSS still has the ultimate trump card (bringing down the
government) to play when they feel their vital interests are at
stake, and signaled the reckless willingness to use it when they
elected the Radicals into a position of national power-however
briefly. Given Kostunica's ability to routinely outplay Tadic on
political tactics and the vested interests of all parties in keeping
this coalition in power as long as possible, we should be most modest
in our expectations of change in the policy areas on which we engage
with Serbia. That said, we plan to move forward with our planned K+1
agenda. Listed below are some of our key policy concerns for the
next year. We have predicted the government's likely course, and our
recommendations for engagement.

ICTY


2. (c) Likely Policy: Tadic has consistently assured us and the
Europeans that he will make full ICTY cooperation his top priority.
His party now controls Defense, and he personally now heads the
National Security Council, which is supposed to coordinate all
security and intelligence activities in the country. This
constellation of competencies will probably be enough for the EU to
cite as a positive step forward on ICTY cooperation and restart SAA
talks. However, there is still no agreement on who will head the
Security Intelligence Agency (BIA),and in fact early rumors are that
Rade Bulatovic may stay in the job. At the same time, Kostunica
remains in the PM slot, and is unlikely to forego his commitment to a
policy of voluntary surrenders. Thus we have no cause to expect any
tangible change from this government on ICTY policy. They will
continue to profess to be making every reasonable effort, but are

unlikely to make the all-hands effort essential to bringing in Mladic
or other PIFWCs. We expect Tadic will tell the international
community in private he is doing everything he can, but can't risk
bringing down the government over this issue at a delicate time.


3. (c) Our Approach: We must continue to demand ICTY cooperation,
but regrettably, taking a hard line on ICTY commitments early on will
not be shared by the Europeans and will thus be counterproductive, as
it would isolate us and cut the legs out from the new DS-majority
government before it has a chance to stand up. In an atmosphere
where the EU is likely to re-start SAA talks as a result of
government formation, we will need to strike a balance that supports
DS and Tadic without letting them off the hook for previous
commitments. Here in Belgrade, we will issue initial public
statements congratulating the new government while expressing our
expectation that the new government will accomplish more on the ICTY
portfolio than its predecessor did. Privately, we will remind Tadic,
the new DS FONMIN, and the new DS DEFMIN of their commitments to make
Mladic their top priority and urge them to show some concrete results
- perhaps rounding up another of the six outstanding PIFWCs to start.


4. (c) Since the Secretary's certification decision is due by the
end of May, we would recommend a negative decision based on the poor
performance of the previous government, with a public commitment to
re-examine the decision in as little as 30-60 days or as soon as the
new government has had an opportunity to create traction on the
issue. This will be somewhat awkward, especially if it comes on the
heels of an EU decision to restart SAA talks. Also, Tadic will
complain about us undercutting him. We would remind him of his
commitments, highlight our intention to reconsider once visible
action is taken, and note that the current EU position remains the
same as ours - they have not indicated a willingness to conclude the
SAA without tangible proof of cooperation with ICTY.

KOSOVO


5. (c) Likely Policy: This government's policy on Kosovo will not
change in any measurable way. Their public redlines were set long
ago - they will refuse to recognize an independent Kosovo, they will
reject any other government's recognition of an independent Kosovo,
and they will consider further reactions to governments and
institutions that recognize an independent Kosovo. These positions
were agreed among all major political parties long before elections,
and were the centerpiece for the new constitution. With DS (and
Tadic, obliquely) in a more prominent role, we will look to the new
government to be more accommodating to Tadic's earlier commitments of
realistic management of the post-status environment. The impact of
the new Ministry for Kosovo and Metohija remains to be seen - our
initial assessment is that it would essentially assume the functions
of a beefed up coordinating center, coordinating the administration
of assistance (publicly) and controlling - or at least heavily
influencing - the activities of hardline Kosovo Serbs and Orthodox
Church leadership (privately).


6. (c) Our Approach: As before, the key to working with this
government will be in engaging with them to ensure their management
of the post-status environment does not, either through action or

BELGRADE 00000651 002 OF 003


inaction, lead to instability in the region. We will engage
regularly with Tadic and relevant ministries to remind them of their
commitments to and obligation for taking an activist position on
maintaining stability. We will also continue with our standing "K+1"
strategy to refocus the attention of the Serbian people on moving
Serbia forward through people-to-people ties and economic
development. We should expect, though, that the status decision will
have short-term impacts on our bilateral relations with this new
government, including at least postponing of some of our training and
assistance programs, less support for our positions in international
fora for a short period of time, and perhaps the recall of Serbia's
Ambassador to Washington for consultations. We had been apprised of
this likely approach by the outgoing government. They argued that
the key to keeping the time interval of this "necessary" reaction
short will be neither side over-reacting to it. We agree, and will
continue to move forward with our engagement programs to the maximum
extent possible and keep the doors open for renewed full engagement
as soon as Belgrade is ready.

SECURITY


7. (c) Likely Policy: Kostunica has hinted strongly that he might
use the Kosovo process as a tool to put the brakes on Serbia's
accelerating Euro-Atlantic integration, specifically with NATO. He
was lukewarm at best to the PfP invitation, and made a point of
saying that relations with NATO would suffer if Kosovo became
independent. He has also kept the government from moving forward on
PfP integration, most notably sending back for redraft Serbia's
Presentation Document. Tadic, on the other hand, has consistently
made NATO integration and eventual alliance membership a key part of
his platform. With DS in control of Defense (and by extension, the
Chief of the General Staff) and DS holding a majority of cabinet
seats, we should expect Euro-Atlantic integration to proceed at much
the same pace as in recent years, perhaps after a short hiatus
following Kosovo independence. A red line for Belgrade, though,
would probably be NATO membership - something Kostunica viscerally
opposes and will likely block at all costs, including threatening to
bring the government down over the issue, if it came to that.


8. (c) Our Approach: We will continue pushing forward with our
integration and reform agenda. Within the limits of certification,
we will continue to be as aggressive as possible in identifying and
using training and education opportunities, ramping up exchanges
through the State Partnership Program, and engaging with a
(hopefully) pro-NATO Defense Ministry and CHOD to push through
remaining agreements like the Article 98. In non-defense fora, like
ICITAP, OPDAT, and EXBS, we will continue to provide an ambitious
schedule of training and education programs. We will also use these
tools to help Serbia engage in more regional activities, for example
through the Proliferation Security Initiative. The basic approach
will be to keep all offers on the table and support pro-reform
elements in the government, using the momentum of completed and
current programs to push greater participation in future programs.

ECONOMY AND DEVELOPMENT


9. (c) Likely Policy: Luckily, all the parties in the new
government share a vision of a European future - though more
conservative groups like DSS prefer moving into Europe on Serbian
terms, not European terms. With G-17 Plus and DS in control of most
of the key economic ministries, we expect a continuation of
pro-reform, pro-European economic policies, perhaps including a new
IMF agreement. In a few key sectors, like energy and privatization,
politicization will remain a problem, including behind the scenes
manipulation when the asset in question is attractive to the local
tycoons. Energy will continue to be a special case, with DSS
attempting to manage the gas sector to placate Russia's desire to
establish long-term control over the sector.


10. (c) Our Approach: Our primary concerns will be protecting
existing U.S. investors, and pushing the GOS to tackle the big
privatizations that will substantially roll back government control
of the economy. We also will encourage the GOS to consider a new deal
with the IMF as a way of cementing government support for a reform
agenda. The track record of Kostunica's caretaker government in the
lost time between elections and the formation of the coalition was
appalling. In an atmosphere of total lack of oversight, corruption
has run rampant. We will make very clear to the next government our
expectation that they will put a lid on such practice and work to
make Serbia an attractive investment destination. On the ground, we
plan to continue with our K+1 programs to promote employment growth
through private sector development, especially in agriculture. We
will also renew our push to secure Serbian acceptance of a Peace
Corps program.

BOTTOM LINE ON OUR AGENDA WITH THE NEW GOVERNMENT


11. (c) With the predicted eleventh hour government formation drama
nearly behind us, we will fully reengage the new coalition with a
positive agenda. Our judgment on its willingness to meet our actions
with similar vigor we reserve until we see the proverbial Kajmak on
the table.


BELGRADE 00000651 003 OF 003


POLT