BOSNIA CANTON 7 GOVERNMENT REMAINS IN LIMBO

C O N F I D E N T I A L SECTION 01 OF 02 SARAJEVO 001519 SIPDIS SIPDIS DEPARTMENT FOR EUR (DICARLO),EUR/SCE (HOH/FAGAN/STINCHCOMB) E.O. 12958: DECL: 07/11/2012 TAGS: PGOV PREL BK SUBJECT: BOSNIA CANTON 7 GOVERNMENT REMAINS IN LIMBO REF: SARAJEVO 01123 Classified By: POL Michael J. Murphy Reasons 1.4(b) and (d) ¶1. SUMMARY: (C) During a July 6 meeting Canton 7/Herzegovina Neretva Canton (HNK) Prime Minister designate Marin Raspudic, of the Croatian Democratic Union of Bosnia and Herzegovina (HDZ-BH),claimed that near-term prospects for forming a government in the canton are bleak. The cantonal government has been in limbo for more than nine months, owing to the inability of any one party or coalition block to achieve the constitutionally mandated two-thirds majority in the assembly to confirm the government. Thus far, not even punitive measures from the Office of the High Representative (OHR) have been sufficient to force a compromise between the HNK's canton's two main political blocks-- Croatian Democratic Union 1990 (HDZ-1990),Party for Bosnia Herzegovina (SBiH), and the Croatian Party of Rights Djapic Jurisic(HSP-DJ) on one side and HDZ-BH and the Party of Democratic Action (SDA) on the other. Despite having received the Cantonal Assembly Speaker's blessing to form a government, Raspudic remains insecure in his post and unable to produce a cabinet list because his opponents in HDZ-1990 and SBiH are withholding their ministerial nominations in protest of Raspudic's appointment. HDZ-BH chairman Dragan Covic, nonetheless, has told us he expects that the government in HNK will form within the next ten days. Given the distribution of seats and current alliances, it is unclear how Covic will manage to force a resolution to the government stalemate. It would be prematre, however, to rule out the possibility given the HDZ-BH's recent success in shutting the HDZ-1990 and SBiH out of the government in Central Bosnia (Canton 6),which had suffered from a similar impasse in government formation talks. In this environment we doubt that the Croat political unity some are calling for is possible in the near term, regardless of the outcome to the HNK saga. END SUMMARY ASSEMBLY SESSION BREAKS DOWN -------------- ¶2. (C) On July 6 we met with Marin Raspudic to discuss the current standoff over government formation in Herzegovina Neretva Canton (HNK). Raspudic could offer no remedy for the current situation in the canton and argued for intervention by the international community. He believed the standoff could persist indefinitely because no party was prepared to make concessions. The key point of contention remains the Prime Minister post, which both HDZ-BH and HDZ-1990 currently claim. Raspudic said that his attempts to reach out to counterparts in opposing parties urging them to submit ministerial candidates at a July 5 assembly session had failed. According to Raspudic, HDZ-1990, SBiH and HSP-DJ, had simply ignored his calls. They then rejected his request at the assembly session for more time and demanded the HDZ-1990 Prime Minister candidate Srecko Boras be given an opportunity to form a government. The HDZ-1990 led block feels particular ownership of the Prime Minister post because they have a simple majority over their opposing block. The Cantonal Assembly Speaker has yet to transfer the mandate to form a government to another candidate but Raspudic's standing remains uncertain. OHR SANCTIONS TAKE EFFECT -------------- ¶3. (C) Pursuant to decisions by former High Representative Christian Schwarz-Schilling on May 29 and June 7, financial penalties against HDZ-BH, HDZ-1990, SDA, and SBiH were reactivated on Friday July 6 after Raspudic was unable to submit a list of ministers. The High Representative had previously suspended the implementation of punitive measures, announced on May 29 against the political parties in recognition of the election of a Cantonal Assembly Speaker. However, having failed to stick to the High Representative's timeline, including the confirmation of the cantonal government by June 22, HDZ-BiH, HDZ-1990, SDA, and SBiH will lose 20 percent of their 2007 budget each week until a Cantonal government is formed. Raspudic was unable or unwilling to provide insight into how his HDZ-BiH would react to OHR sanctions. He claimed that as a local politician he could not speak authoritatively on the issue but noted that in politics anything can happen at the eleventh hour. BREAKING THE STALEMATE SARAJEVO 00001519 002 OF 002 -------------- ¶4. (C) Of 30 seats in the HNK Assembly the current break down is: HDZ-BH, 5; HDZ-1990, 7; SDA, 6; SBiH, 5; SDP, 2; HSP-DJ, 2; BPS-1; and 2 independents (defectors from HDZ-BH who now caucus with HDZ-1990). In the current coalition arrangement the HDZ-1990 led block claims 16 seats, counting the 2 independent delegates, and the HDZ-BH led block has 11 seats. As a result, both blocks remain several seats shy of the twenty votes necessary to force a decision in the assembly on the new government. ¶5. (C) Under these circumstances, options could include calling for new elections or amending the 2/3 vote regulation. Raspudic opined that the electorate could use the opportunity of new elections to hold officials accountable for failing to form a government for more than nine months. ¶6. (C) Until recently, the prospects for forming a government in Central Bosnia (Canton 6) had appeared equally daunting, but through deals with smaller parties and independent delegates, the HDZ-BH and SDA managed to shut HDZ-1990 and SBiH out of the government completely. On July 10 the Central Bosnia Cantonal government finally formed with HDZ-BH and SDA at the helm of a coalition that includes smaller parties and independent delegates and Covic tells us that the stalemate in HNK also will be resolved presently. COMMENT -------------- ¶7. (C) Covic's confidence that the HNK government will form within the next ten days suggests that he and his partners in SDA are probably already working behind the scenes to persuade delegates from HDZ-1990 and SBiH to support the Raspudic government. The distribution of seats is less favorable to HDZ-BH in the HNK than in Central Bosnia, where HDZ-1990 is much weaker. Even if the HDZ-BH led block in the HNK were able to recapture the allegiance of its 2 delegates that now coalesce with HDZ-1990 and to win the support of the smaller parties in the Assembly, the caucus still would need to convince 2 members from HDZ-1990 or SBiH to support its government. If Covic's efforts and OHR sanctions fail to break the government impasse, the alternative of holding new elections could ultimately produce a distribution of seats that would simply renew the stalemate. Regardless, the nasty battle between HDZ-BH and HDZ-1990 over the HNK government formation suggests Croat political unity, which the Church and Zagreb are quietly pushing, is likely to be a long way off. MCELHANEY