A/S FRIED MEETS WITH MONTENEGRIN OFFICIALS, OPPOSITION

UNCLAS SECTION 01 OF 02 PODGORICA 000243

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SENSITIVE
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TAGS: PREL ECON CVIS CASC PTER MW
SUBJECT: A/S FRIED MEETS WITH MONTENEGRIN OFFICIALS, OPPOSITION

REF: A. REF A : PODGORICA 235


B. REF B: PODGORICA 214

C. REF C: PODGORICA 182

D. REF D: PODGORICA 100

PODGORICA 00000243 001.3 OF 002



1. (U) SUMMARY: DURING HIS JULY 8 VISIT TO MONTENEGRO,
ASSISTANT SECRETARY DANIEL FRIED MET SEPARATELY WITH FOREIGN
MINISTER MILAN ROCEN, PRESIDENT FILIP VUJANOVIC, PRIME MINISTER
ZELJKO STURANOVIC, AND SPEAKER OF PARLIAMENT RANKO KRIVOKAPIC.
HE ALSO HAD AN INFORMAL DISCUSSION OVER DINNER WITH MEMBERS OF
POLITICAL PARTIES AND OTHERS, MOST FROM THE OPPOSITION. THIS
CABLE COVERS DISCUSSION ON THE ECONOMY, PROGRESS TOWARD
EURO-ATLANTIC INTEGRATION, CONSULAR ISSUES, AND THE
CONSTITUTIONAL DEBATE. KOSOVO-RELATED ISSUES WILL BE REPORTED
SEPTEL. PRESS COVERAGE WAS REPORTED IN REFTEL A. A/S FRIED DID
NOT CLEAR THIS MESSAGE. END SUMMARY.



ECONOMY




2. (SBU) GOVERNMENT INTERLOCUTORS WERE SOLIDLY OPTIMISTIC WITH
REGARD TO THE ECONOMY, AND HAD NUMBERS TO BACK THIS UP.
ACCORDING TO FM ROCEN, GDP HAS GROWN AT AN ANNUAL RATE OF 6.6%
FOR THE LAST SIX MONTHS, FDI HAD COME IN FROM 77 COUNTRIES (THE
PM CITED "MORE THAN 45" COUNTRIES) AND HAD AMOUNTED TO 350
MILLION EUROS IN THE FIRST SIX MONTHS OF 2007, AND CONSTRUCTION
IS UP 147% FROM THE SAME PERIOD LAST YEAR. ASKED ABOUT RUSSIAN
PARTICIPATION, ROCEN RESPONDED THAT THEY ACCOUNTED FOR 12% OF
INVESTMENT. (REF. B) HE SAID 40% OF FOREIGN INVESTMENT WAS IN
BANKING, AND THE RUSSIANS HAVE NO PART OF THAT. THE TOP
INVESTORS IN REAL ESTATE ARE BRITISH AND IRISH, WITH
SCANDINAVIANS AND BELGIANS MOVING UP FAST, HE SAID. PM
STURANOVIC SAID THAT MONTENEGRINS HAD ASKED TO BE RESPONSIBLE
FOR THEIR OWN FUTURE, AND HAD SHOWN IN THIS FIRST YEAR THAT THEY
WERE UP TO THE TASK. THEY HAD ACHIEVED GOOD PROGRESS ON THE
ECONOMY AND SECURITY, AND NOW NEEDED TO CONCENTRATE ON
ADMINISTRATIVE CAPACITY BUILDING.




3. (SBU) NATURALLY, THE OPPOSITION SEES THE PICTURE DIFFERENTLY.
ANTI-CORRUPTION WATCHDOG VANJA CALOVIC SAID THAT MOST RUSSIAN
MONEY WAS DISGUISED, AND ASSERTED THAT ANYTHING COMING VIA
"AUSTRIAN BANKS" (HYPOALPE ADRIA HAS UNTIL RECENTLY BEEN THE
ONLY ONE PRESENT) WAS SUSPECT. MOVEMENT FOR CHANGE (PZP) AND
SOCIALIST PEOPLE'S PARTY (SNP) REPRESENTATIVES AT THE SAME
DINNER TABLE AGREED. THE CONSENSUS VIEW AMONG THEM WAS THAT
CORRUPTION REMAINED THE NUMBER ONE PROBLEM IN MONTENEGRO, AND
THEY WERE TROUBLED BY POLLING THAT SUGGESTS THIS ISSUE IS WANING
IN THE PUBLIC'S CONSCIOUSNESS AS PEOPLE FOCUS MORE ON JOBS AND
THEIR INDIVIDUAL QUEST FOR PROSPERITY.



EURO-ATLANTIC INTEGRATION




4. (SBU) A/S FRIED NOTED TO ALL INTERLOCUTORS THAT THE DECISION
TO JOIN THE EU AND/OR NATO IS UP TO THE MONTENEGRINS, BUT THAT
EU MEMBERSHIP IS NOW THE ONLY WAY FOR THE PEOPLE OF THE BALKANS
TO LIVE WITHIN A SINGLE POLITICAL ENTITY. SPEAKER KRIVOKAPIC
RESPONDED THAT A SLOVENIAN POLITICIAN HAD ONCE TOLD HIM THAT
"THE EU IS THE NEW YUGOSLAVIA." HE EXPECTED MONTENEGRO COULD
ACCOMPLISH REQUIREMENTS FOR EU MEMBERSHIP BY 2011-2012, NOTING
THAT QUICK PROGRESS WOULD BE THE BEST STIMULUS TO SERBIA, SINCE
THEY WOULD NOT WISH TO LAG BEHIND THEIR "YOUNGER, WILDER
BROTHER." OTHER OFFICIAL INTERLOCUTORS REPEATED THE IMPRESSIVE
LIST OF ORGANIZATIONS, TREATIES, AND AGREEMENTS THAT MONTENEGRO
HAS JOINED OR COMMITTED TO OVER THE PAST YEAR (REF. C). EVEN
THE OPPOSITION FOUND NO FAULT WITH THE RAPID PROGRESS ON
EURO-ATLANTIC INTEGRATION AND FAILED TO MENTION THE RECENT
KERFUFFLE OVER ARTICLE 98.




5. (SBU) ROCEN STRESSED MONTENEGRO'S DESIRE TO JOIN THE ADRIATIC
CHARTER. HE SAID SERBIA PLANS TO ESTABLISH AN ALTERNATIVE
GROUP, INCLUDING MONTENEGRO AND BOSNIA AND HERZEGOVINA, BUT
EXCLUDING THE U.S. AND MONTENEGRO WILL NOT ACCEPT THIS IDEA.




6. (SBU) THE PRESIDENT AND THE FOREIGN MINISTER WERE
PARTICULARLY GRATEFUL FOR U.S. COOPERATION ON DEFENSE ISSUES,
AND MADE STRONG APPEALS FOR GENEROUS IMET AND FMF ASSISTANCE.
"IT IS BECAUSE OF YOUR HELP THAT WE ARE MOVING QUICKLY ON PFP
AND NATO ISSUES" SAID ROCEN. "WE KNOW HOW SMALL WE ARE, AND
YOUR ATTENTION AND ASSISTANCE HAS MEANT A LOT TO US."
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PODGORICA 00000243 002.3 OF 002


VUJANOVIC SAID MONTENEGRO HAD "SHOWN RESPONSIBILITY" ON DEFENSE
REFORM, AND WAS GRATIFIED THAT NATO SYG DE HOOP SCHEFFER HAD
SAID MONTENEGRO WOULD BE TREATED INDIVIDUALLY ON ACCESSION
ISSUES.



CONSULAR ISSUES




7. (SBU) A/S FRIED SAID MORE THAN ONCE THAT HE UNDERSTOOD
MONTENEGRINS' PREFERENCE FOR THE EMBASSY IN PODGORICA TO OFFER
NON-IMMIGRANT VISA SERVICES, AND PLEDGED TO LOOK INTO THE
ISSUE. ROCEN NOTED THAT THE PROBLEM COULD BE SOLVED RIGHT AWAY
IF MONTENEGRINS WERE ELIGIBLE FOR VISA-FREE ENTRY. FRIED
SUGGESTED WE TRY "ONE STEP AT A TIME." THE ASSISTANT SECRETARY
ALSO RAISED THE "EAGLES FLIGHT" CASE INVOLVING AMERICAN
CITIZENS CHARGED WITH TERRORISM, UNDERLINING THAT THE USG
INTEREST WAS TO SEE THAT THE PROCESS WAS FAIR. ROCEN RESPONDED
THAT "WE ARE FIGHTING TERROR TOGETHER", AND ASKED MEMBERS OF THE
U.S. CONGRESS TO TRUST MONTENEGRO'S JUDICIARY AS THE PROCESS
COMES TO A CONCLUSION.



CONSTITUTION




8. (SBU) ALL AGREED THAT THE SO-CALLED SYMBOLIC ISSUES, SUCH AS
OFFICIAL LANGUAGE AND RELIGION, ARE THE MAJOR OBSTACLES ON THE
CONSTITUTION. OTHERWISE, ASSESSMENTS OF PROGRESS ON THE DRAFT
DIFFERED SHARPLY. THE MAIN SUBSTANTIVE ISSUE REMAINING TO BE
RESOLVED RELATES TO THE JUDICIARY (REF. D). MEMBERS OF THE
GOVERNING COALITION FELT THIS HAD BEEN PUT TO BED, BUT
OPPOSITION REPRESENTATIVES DID NOT. THERE WAS ALSO DISAGREEMENT
WHETHER THE PARLIAMENT WOULD BE ABLE TO PASS A CONSTITUTION WITH
2/3 VOTE, OR WOULD NEED TO TAKE IT TO A REFERENDUM. IN THIS
INSTANCE THE MAJOR RULING COALITION PARTNER DEMOCRATIC PARTY OF
SOCIALISTS (DPS),PLUS THE OPPOSITION MOVEMENT FOR CHANGE (PZP)
AND SOCIALIST PEOPLE'S PARTY (SNP) SEEMED TO THINK THE
PARLIAMENTARY VOTE WOULD PASS; THE MINORITY RULING PARTNER
SOCIAL DEMOCRATIC PARTY (SDP, LED BY SPEAKER KRIVOKAPIC) AND THE
SERBIAN LIST FELT A REFERENDUM WOULD BE REQUIRED.




9. (SBU) COMMENT: IF IT DOES COME TO A REFERENDUM, TURN-OUT IS
LIKELY TO BE LOW, UNDERMINING THE PERCEIVED LEGITIMACY OF THE
PROCESS. THE CONSTITUTION IS VIRTUALLY GUARANTEED TO PASS A
REFERENDUM, SINCE IT WILL ONLY REQUIRE A SIMPLE MAJORITY OF
VOTES. FRIED ASKED KRIVOKAPIC WHY THE SERBIAN LIST WOULD PUSH
FOR A SECOND LOSING REFERENDUM WITHIN TWO YEARS, BUT THE SPEAKER
JUST SHRUGGED. IT IS LIKELY, HOWEVER, THAT THEY WOULD RATHER
LOSE AGAIN THAN BACK DOWN ON SYMBOLIC ISSUES, SUCH AS "SERBIAN"
VERSUS "MONTENEGRIN" LANGUAGE. THE SPEAKER, WHO HAS NATIONALIST
TENDENCIES IN THE MONTENEGRIN DIRECTION, IS WELL AWARE OF THIS.
HIS RECENT SUGGESTION OF A "JUZHNO-SLOVENSKI" LANGUAGE WAS A
NON-STARTER BUT ALLOWED HIM TO LOOK LIKE A COMPROMISER. IT IS
INTERESTING THAT THE SNP AND PZP SAY A REFERENDUM WILL NOT BE
NECESSARY, BECAUSE THEIR PARLIAMENTARY VOTES IN COMBINATION WITH
THE DPS AND ONE OR TWO ONE-PERSON PARTIES WOULD BE ENOUGH TO
MEET THE 2/3 REQUIREMENT, EVEN -- IF REQUIRED -- WITHOUT THE
SPEAKER'S SDP. END COMMENT.
BARNES
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