PRIME MINISTER SANADER RECEIVES MANDATE TO TRY AND

UNCLAS ZAGREB 001082 SIPDIS SIPDIS FOR EUR/SCE, EUR/PPD AND EUR/RPM OSD FOR WINTERNITZ E.O. 12958: N/A TAGS: PREL PGOV HR SUBJECT: PRIME MINISTER SANADER RECEIVES MANDATE TO TRY AND FOR NEXT GOVERNMENT; COALITION NEGOTIATIONS CONTINUE REF: A. ZAGREB 1072 ¶B. ZAGREB 1068 ¶C. ZAGREB 1065 ¶1. As forecast in REF A, on December 15 President Stipe Mesic gave the mandate to Prime Minister Ivo Sanader to try and form a new government led by Sanader's HDZ party, based on the results of Croatia's November 25 parliamentary elections. The official final results of the Nov. 25 elections have not yet been announced, but Mesic noted that the outstanding protests could not have any meaningful impact on the results. Therefore, Mesic said, the HDZ can assemble the necessary 77-seat majority in the Sabor, assuming it successfully concludes negotiations with the other parties that have said they are willing to go into coalition with the HDZ. ¶2. Prime Minister Sanader announced that, on the basis of this mandate, the HDZ (holding 66 seats) would continue its negotiations with the 8-seat Peasants/Social Liberals (HSS/HSLS) coalition (REF B),and would also open official talks this week with the remaining 7 national minority representatives (including three ethnic Serb parliamentarians) who have not yet declared their allegiance to the HDZ. Sanader said he was confident the HDZ would be able to assemble at least a 77-seat coalition within the 30-day deadline, although he acknowledged that a final deal with the HSS/HSLS had not yet been reached. The press continues to report that some key issues with the HSS/HSLS, including handling of Croatia's fisheries zone (REF C) and division of ministerial jobs, will only be negotiated this week. ¶3. Based on Croatia's electoral deadlines, this means the Sabor should be seated by January 6, and a new government confirmed in office no later than January 14. If Sanader is unable to form a government by January 14, then he could ask Mesic for an additional 30 days to pursue negotiations. Our view, however, is that it is more likely that a new government will be in place well before the January 14 deadline, despite the looming holiday break. BRADTKE