MACEDONIA: SCENESETTER FOR A/S HILL'S VISIT

UNCLAS SECTION 01 OF 03 SKOPJE 000891

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/SCE, STATE FOR EAP/FO FOR EVELYN POLIDORO

E.O. 12958: N/A
TAGS: PGOV PREL MK
SUBJECT: MACEDONIA: SCENESETTER FOR A/S HILL'S VISIT
NOVEMBER 12-14


NEED TO SPRINT TO THE NATO MEMBERSHIP FINISH LINE


1. (SBU) Welcome back to Skopje! When you arrive, political
leaders here will be mulling over the tough message USNATO
Ambassador Nuland delivered November 8 during a USG
interagency visit to Skopje. Nuland told the government and
opposition that Macedonia needs to demonstrate its readiness
for NATO membership by "sprinting" the last two miles of the
marathon it has been running since it became a NATO MAP
aspirant in 1999, or risk not making it. You can help
reinforce her message in your one-on-one meetings.

EU PROGRESS REPORT -- "BALANCED AND FAIR"


2. (SBU) The EU's annual progress report, released November
6, criticized the lack of political consensus here, slow
progress on EU-related reforms, and the lack of effective
PM-President cohabitation, among others. The report did not
recommend a date for beginning EU accession negotiations.
That rebuke of the Gruevski government was expected, but
stung nonetheless. Gruevski responded positively, however,
characterizing the report as "balanced and realistic." He
noted the achievements it mentioned (for which he took
credit),insinuated that the opposition was to blame for many
of the country's shortcomings, and said the government would
continue to work toward a date for beginning membership talks
(Macedonia became an EU candidate country in December 2005).


KEY ISSUES FOR NATO MEMBERSHIP


3. (SBU) We and the Europeans are pressing the Macedonian
government (GOM) and opposition on critical NATO and EU
membership-related issues. But first, the good news:

--Macedonia has made good anti-TIP progress this year, moving
from a Tier II Watchlist candidate to a solid Tier II
performer. The government also has shown progress on the
anti-corruption front, jumping from 105th place on
Transparency International's corruption perception index in
2006 to 84th place this year. The government has actively
pursued corruption investigations and prosecutions, although
some cases clearly have been motivated by partisan
considerations (including the ongoing prosecution of former
PM Buckovski).

--Framework Agreement (FWA) implementation has progressed,
with phase II of decentralization having begun as scheduled
in 42 of Macedonia's 84 municipalities in July of this year,
and continued hiring of ethnic Albanian and other minorities
to implement equitable representation. But more remains to
be done. The GOM needs to work with the remaining 42
municipalities to prepare them to take part in phase II of
decentralization. Despite its oft-touted "tripling of the
equitable representation budget for 2007," the government
also needs to clear up the currently murky process for hiring
ethnic minorities with transparent, fair, and non-partisan
hiring guidelines.

--Macedonia is showing positive economic performance, with
the country recently ranked by the World Bank as one of the
top 10 "most improved" countries in carrying out business
environment reforms. Gruevski has raised public sector wages
and cut VAT rates on some key consumer items, which has
helped keep his poll numbers strong. Starting in 2008,
personal and corporate tax rates will fall from 12 percent to
10 percent (flat tax),one of the lowest tax rates in Europe.

--Rounding out its achievements, the GOM passed this year a
liberal religious freedom law which generally meets ODIHR
standards for protecting religious freedom. The GOM just
submitted for parliamentary approval a decision calling for
doubling Macedonia's contributions in Iraq -- by an
additional platoon -- and MOD Elenovski says Macedonia also
is considering a future increase in its troop contributions
in Afghanistan (President Crvenkovski paid a morale-booster
visit to ARM troops in ISAF October 10-11). Although
cohabitation remains poor, President Crvenkovski recently
accepted PM Gruevski's offer to meet monthly to "harmonize
positions on strategic issues." Macedonia also successfully
hosted the NATO EAPC Security Summit in June, demonstrating
it could tackle the logistics and security challenge of
hosting 49 delegations for the event, including the NATO
Secretary General.

SIPDIS


SKOPJE 00000891 002 OF 003


NATO BID IN THE BALANCE: NEED TO SPRINT, NOT LIMP, TO THE
FINISH LINE IF YOU WANT TO CROSS IT.


4. (SBU) Despite positive accomplishments, movement on key
political criteria has practically ground to a halt. There
has been some slight movement on two of the five points in
the May 29 VMRO-DUI agreement that ended DUI's boycott of
parliament, but the two main issues -- a draft language law
and a social package for former insurgents -- are stuck in a
quagmire of political gamesmanship on both sides. (Note: The
main points of the US/EU-brokered May 29 agreement between
governing VMRO and ethnic Albanian opposition DUI are:
codifying a list of 46 laws that would require qualified
(Badinter) majority voting; recomposing the parliamentary
committee on inter-ethnic relations; submitting a draft
language law for parliamentary consideration, and concluding
a deal on a social benefits package for victims of the 2001
conflict. End note.)


5. (SBU) The government holds the key to de-blocking the
process, but too often has preferred to blame others for the
deadlock. DUI and Gruevski ally DPA also are at loggerheads,
despite a recent attempt by Albania's President to nudge both
sides toward rapprochement. The two ethnic Albanian parties
are being blamed in the media for direct or indirect links to
recent incidents near the border with Kosovo that have
involved arms smuggling, movements of criminal elements, and
a recent shoot-out between rival criminal groups. Some local
analysts (incorrectly, in our view) have assessed those
incidents as "security challenges" that could be
destabilizing as Kosovo status deadlines approach (see para
11, below).


6. (SBU) The government has managed to fill four of the
remaining five seats on the 15-member State Judicial Council
(SJC),which has allowed the SJC to fully function,
permitting key judicial reforms to proceed. It achieved that
goal, however, through a tactical end run around the
President and ethnic Albanian opposition DUI, which has
further damaged relations with DUI. Gruevski has rejected
the President's proposal to fill the remaining seat to
complete the SJC. By alienating DUI, Gruevski also has
ensured a tough slog as the MOI moves to implement the law on
police (required for NATO membership),which will require DUI
buy-in.


7. (SBU) Our message to the GOM accordingly has been
hard-hitting:

"If you do not change the way you are working, if you fail to
work with the opposition to build consensus on May 29
implementation, completion of the SJC, and implementation of
the police law -- among others -- you will have failed to
meet NATO criteria. The image you convey in implementing
priority tasks -- whether you bypass the opposition or work
to build consensus -- is critical to promoting your
candidacy with other NATO allies. We will press the
opposition to be flexible as well. But you are responsible
for following through to change the current negative
atmosphere. Your NATO bid hangs in the balance."


8. (SBU) We have delivered to the opposition an equally tough
message about acting responsibly: "Now is not the time for
partisan gamesmanship or filibusters that could endanger
Macedonia's NATO bid. Not just Gruevski, but DUI's president
Ahmeti too needs to abide by the May 29 agreement.
Short-term partisan gains could cost your country its NATO
candidacy. All must demonstrate flexibility and a readiness
to compromise for Macedonia's sake."

COURSE CORRECTION ALSO NEEDED ON THE NAME ISSUE


9. (SBU) The GOM has, by and large, tried to act with
restraint on the name issue, despite Greek threats to veto
Macedonia's NATO candidacy if Skopje does not agree to a
compromise solution before the Bucharest Summit in April
2008, and despite missteps by both UNGA President Srjan Kerim
and President Crvenkovski at the UNGA in September that
understandably provoked strong Greek reactions. During
negotiations on the name in New York November 1, UN Special
Envoy Nimetz proposed guidelines and principles for moving
toward a solution, which FM Milososki initially described as
"generally positive."


10. (SBU) The Prime Minister, however, in a public statement

SKOPJE 00000891 003 OF 003


the next day rejected the key point in the proposal that
would require Macedonia to use a differentiated name for
international use. That statement violated Nimetz's request
for confidentiality and undermined the overall process. Even
though we are not asking Macedonia to change its
constitutional name, we are urging both sides to refrain from
provocations and "study the Nimetz paper with an open mind
and with a view toward finally resolving differences and
reaching a solution to the issue."

SUCCESSFUL POLICE ACTION TARGETS CRIMINAL GROUP IN NORTHWEST


11. (SBU) On November 7, the Ministry of Interior (MOI)
carried out a major police operation around Brodec, near the
Kosovo border, aimed at a group of 30-40 criminals, including
several escapees from a Kosovo prison. The group was
suspected of, inter alia, arms smuggling and planning attacks
on local police stations. According to the MOI, several
hundred police were involved in the operation, which our
ICITAP adviser and his OSCE colleague assessed as having been
conducted professionally. The MOI reported that six members
of the group were killed in exchanges of gunfire with police,
but there were no civilian casualties officially reported;
one police officer was lightly wounded during the operation.
Police also discovered a large cache of ammunition,
explosives, and weapons (including MANPADs and RPGs) at the
site of the incident.
MILOVANOVIC