BOSNIA - DODIK, TIHIC, COVIC AGREE TO A POLITICAL

C O N F I D E N T I A L SECTION 01 OF 05 SARAJEVO 001728

SIPDIS

EUR/SCE (HYLAND, FOOKS),NSC FOR HELGERSON

E.O. 12958: DECL: 11/10/2018
TAGS: PREL PGOV PINR PHUM KDEM BK
SUBJECT: BOSNIA - DODIK, TIHIC, COVIC AGREE TO A POLITICAL
CEASE FIRE, BUT WILL IT LAST?

REF: A) SARAJEVO 1553 B) SARAJEVO 1724 C) STATE 113894

Classified By: Ambassador Charles L. English. Reasons 1.4 (b) and (d).


1. (C) SUMMARY: On November 8, Bosnia's three main political
party leaders -- Sulejman Tihic, Dragan Covic, and Milorad
Dodik -- issued a joint statement outlining a common approach
to a number of controversial issues. The statement deals
with constitutional reform, state and defense property, the
census, Brcko, the state budget, and possible restructuring
of the Council of Ministers (CoM). Although media and some
internationals have hailed this statement as a "historic
agreement" forecasting further compromise and dialogue, some
party officials are privately skeptical about the feasibility
of turning rhetoric into action. Moreover, Haris Silajdzic,
Tihic's main Bosniak rival, and Bozo Ljubic, Covic's main
Croat rival, did not respond so positively. Silajdzic's
response was so angry that one paper characterized it as
"hysterical." Opposition leader Zlatko Lagumdzija told us
privately that he would not support any element of deal,
arguing that the governing coalition, not the opposition, had
the obligation to govern by making compromises and
implementing them.


2. (C) We welcome dialogue on these issues, but share
skepticism in some quarters about whether the political
agreement will translate into concrete results. The devil is
in the details, and there is ample scope for continued
fighting over them. Though the joint statement could portend
final settlements on state and defense property, it falls
short of our objectives on Brcko -- codifying it as a Bosnian
institution and guaranteeing it access to the Constitutional
Court. We are encouraged by the political empowerment, and
therefore ability to compromise, of Tihic and Covic, but they
will need support from Lagumdzija if the statement's
provisions are to become law given the predictable and angry
reaction from Silajdzic and Ljubic. And while Dodik's
willingness to negotiate with Tihic and Covic is a positive
step, we will not be convinced that Dodik has turned over a
new leaf until we see a longer-term pattern of constructive
statements and actions given his two-year destructive track
record. END SUMMARY

Party Leaders Scramble for Agreement Before PIC
-------------- --


3. (C) Party of Democratic Action (SDA) chairman Sulejman
Tihic, Croatian Democratic Union (HDZ-BiH) chairman Dragan
Covic, and Alliance of Independent Social Democrats (SNSD)
chairman Milorad Dodik met on November 8 to discuss a number
of issues on which Bosnian leaders have long been stalemated.
Tihic and Covic forecasted the meeting at an October 27
dinner with Ambassador, but they were not optimistic about
its prospects. It came as a surprise to the Bosnian
political cognoscenti when the three men issued a joint
statement outlining an agreed-upon approach to constitutional
reform, state and defense property, a census, Brcko, the
state budget, and restructuring the Council of Ministers. At
least one media outlet has hailed this an "historic
agreement" that shows Bosnian leaders are prepared for
dialogue and compromise. The French Ambassador lauded the
statement as an encouraging call for compromise and dialogue.
OHR and the EU have embraced it as a "step in the right
direction," but underscored that the political commitments it
contains must translate into "concrete results."


4. (C) Covic told us that he believes that aspects of the
joint statement could be implemented quickly, provided he and
Tihic can secure the support of the Social Democratic Party
(SDP) and its leader Zlatko Lagumdzija. As Covic explained,
SDP's votes in the state-level parliament are critical to
secure passage of elements of the political agreement that
other parties from the current ruling coalition, notably
Bosniak member of the Tri-Presidency Haris Silajdzic's Party
for BiH (SBiH),are unlikely to support. Covic's
expectations that Lagumdzija will support any, let alone all,
elements of the political deal may be misplaced, however.
Lagumdzija privately criticized specifics of the statement
with us, including those that dealt with Brcko, the census,
and constitutional reform. He reiterated to us his long-held
position that, as an opposition party, SDP was not prepared
to support legislation that did not enjoy the support of the
entire governing coalition.

SARAJEVO 00001728 002 OF 005



Constitutional Reform: More Discussion Later
--------------


5. (C) On constitutional reform (CR),Dodik, Tihic, and Covic
committed themselves to a CR process at a later date. They
agreed these talks would focus on four areas: 1) harmonizing
the constitution with the European Convention on Human
Rights, 2) responsibilities of the state (i.e., the division
of competencies between the entities and the state),3)
improving the functionality of Bosnia's institutions, and 4)
territorial organization. The leaders also agreed to enlist
international expertise in the process. Most importantly,
the three men agreed that the CR process would involve
amending the current constitution, not drafting an entirely
new document, as Haris Silajdzic and HDZ-1990 leader Bozo
Ljubic have insisted. Political analysts have interpreted
the three men's agreement on constitutional reform as an
attempt to revive the U.S.-brokered package of constitutional
amendments.

State Property: Endorsing the PIC Proposal
--------------


6. (C) The proposed agreement on state property nearly
matches that suggested by the PIC Ambassadors on October 30,
which provided that the state would own all property needed
for the work of state institutions, but that all other
property would belong to lower levels of government (i.e.,
entities, cantons, or municipalities). Notably, the
Dodik-Tihic-Covic statement on state property also includes
defense property, which the PIC had been treating separately
for purposes of the "5 2" agenda. The joint statement
appears to suggest that immovable defense property, the only
outstanding defense property issue, would be divided along
the same functional and territorial lines as all other state
property with the Ministry of Defense (MoD) and Bosnian Armed
Forces owning outright whatever it required. The July 2007
political agreement on defense property provided for use, not
ownership, of immovable defense property, however, and NATO
has been working with the MoD to draft a transfer agreement
on immovable defense property consistent with the July 2007
agreement. It appears that Dodik may have made a concession
on immovable defense property as part of the overall solution
to state property, but it is unclear if that was what Dodik
intended. Covic assured us that it was, but our experience
negotiating the movable defense property agreement suggests
Dodik does not always pay attention to the details (to put it
kindly).

Census: Tihic and Covic Capitulate
--------------


7. (C) The leaders agreed to hold a census in 2011 and to
include data on ethnicity, religion, and language, to which
Bosniaks and Croats have long objected and Dodik has long
insisted (ref A). In exchange for the inclusion of these
data, the party leaders agreed to use the 1991 census data
until 2014 as a basis for determining ethnic representation
in institutions at all levels of government. SDA Vice
President Sefik Dzaferovic told us that SDA would demand the
amendments of several laws and other regulations to
substitute the "the 1991 census" for "the most recent census"
in order to ensure the compromise has its intended impact.
The parties also agreed to push through parliament a
five-year program beginning in 2009 to support returns of
displaced persons. Dzaferovic noted that SDA would support
the census only if parliament adopts and fully implements
this program. This part of the joint statement constitutes a
significant compromise by Tihic and Covic. All sides are
aware of the need for a census -- primarily to meet an EU
requirement -- and we suspect that the returns program and
the use of 1991 data for representation constitute what Tihic
and Covic assess will be sufficient political cover to
justify their concessions on the questions to be included in
the census.

Brcko District: Legal Confusion
--------------


8. (C) The leaders agreed to provide adequate legal
protections to Brcko vis-a-vis the state and entities by an
unspecified "constitutional act" or by a law with a

SARAJEVO 00001728 003 OF 005


constitutional two-thirds majority. This language implies
passage of a so-called "constitutional law" rather than the
two constitutional amendments and the state-level law on
Brcko, which we, the Brcko Supervisor, and others have argued
are necessary to address outstanding issues related to Brcko.
Both Dzaferovic and SNSD state-level parliamentarian Lazar
Prodanovic expressed skepticism that the joint statement
offered a viable solution on Brcko. Dzaferovic noted that
adopting a "constitutional act" or "constitutional law" on
Brcko would first require an amendment to the constitution
introducing such a legal category and specifying the areas to
which it would apply. This would be far more complicated
than adopting a constitutional amendment on Brcko, Dzaferovic
observed. Lagumdzija mocked the notion that a political
agreement could introduce into Bosnian jurisprudence a
"non-existent" legal concept. Covic pleaded legal ignorance,
but told us that Tihic had told both Dodik and Covic that it
was possible to adopt a "constitutional law." (Note: This
represents a 180 degree reversal from what Tihic maintained
several months ago, and his willingness to abandon the Brcko
amendments flatly contradicts stated SDA policy. End Note).

Council of Ministers: Trying to Get Rid of SBiH
-------------- --


9. (C) The parties officially stated that they discussed the
need for reconstruction of the Council of Ministers and
agreed to continue discussions about the topic. The daily
Dnevni Avaz, however, is speculating that the leaders
cogitated on the possibility of ousting SBiH from the
government and replacing it with SDP. Indeed, Tihic in a
press statement claimed that amid the vicissitudes of
negotiations within the ruling coalition, he had hoped the
coalition with SBiH would stand but now is having doubts as
rifts between his party and SBiH are deepening. He
speculated on the possibility of either early elections or
forming a minority government without SBiH, but with SDP
support.

Silajdzic "the Loser" and Ljubic React Strongly
-------------- --


10. (C) Silajdzic held a press conference in which he
strongly criticized the Dodik-Tihic-Covic agreement. He
chastised Tihic and Covic for "moral and political
capitulation" to pressure from Dodik, adding that besides the
Brcko agreement, no element of the joint statement was
acceptable to him or SBiH. Taking his challenge directly to
a hostile environment, Silajdzic appeared on a popular RSTV
news program. He portrayed the statement as the "final nail
in the coffin Tihic has prepared for Bosnia," adding that
Serb intransigence continues to obstruct Bosnia's progress
toward the EU. Some media characterized Silajdzic's reaction
as "hysterical," but the Sarajevo-based, pro-Bosniak daily
Dnevni Avaz had the harshest words, labeling Silajdzic a
"historical loser" who had been punished by his voters in the
October elections and was now being ostracized by the three
leading parties. (Comment: That Dnevni Avaz has taken such a
position is itself evidence of a sea-change in Bosniak
politics, as the paper was once a strong supporter of
Silajdzic, including his 2006 campaign against the
U.S.-brokered package of constitutional amendments. End
Comment) HDZ-1990 chairman Bozo Ljubic also maligned the
joint statement, bemoaning the fact that he was not invited
to the meeting and declaring that only Dodik could be
satisfied with its results given Tihic's and Covic's complete
capitulation on the constitution and census. Ljubic added
sarcastically, "It looks like OHR is not necessary when
(these three leaders) agree so quickly."

Comment I: What the Statement Means for OHR Closure
-------------- --------------


11. (C) The Dodik-Tihic-Covic joint statement has been
hailed as "historic" by some, merely "welcomed" by others,
and condemned by a few (principally Tihic's and Covic's main
political rivals in SBiH and HDZ-1990, respectively). We
have publicly welcomed the "constructive dialogue" aimed at
resolving the political gridlock in Bosnia, but have been
more cautious than our European counterparts. Though the
joint statement does open a path to OHR-EUSR transition, it
does not clear it of potential political roadblocks. Like
all political agreements, particularly those involving rival

SARAJEVO 00001728 004 OF 005


Bosnian political leaders, the devil is in the details.
There is ample scope for continued fighting over these
details, just as there was with the July 2007 Defense
Property Agreement and the November 2007 Mostar Declaration
on police reform, neither of which produced their promised
reforms. And signals from Lagumdzija that he and his party
have no intention of helping the ruling coalition do what it
cannot do on its own suggest that this deal may never mature.


12. (C) That said, we welcome what is clearly progress on
state and defense property, even if its immediate political
prospects look uncertain. The major problem for us is the
statement's provisions on Brcko. They fall short of what we
continue to believe is the most effective way to ensure Brcko
has adequate legal protections vis-a-vis the state and
entities: a state-level law on Brcko and -- most notably --
constitutional amendments enshrining it as a Bosnian
institution and guaranteeing it access to the Constitutional
Court. The joint statement does not close the door
completely on amendments, but it comes close, and it opens
the door to a solution that has no basis in the Bosnian
constitution: for all intents and purposes, a "constitutional
law." Common in other European jurisdictions (most notably
Slovakia, where the HighRep got the idea and proposed it to
Dodik and others),this category of law simply does not exist
here. Nonetheless, we suspect there will be pressure from
the HighRep and the EU to embrace this flawed approach, even
though a state-level law is insufficient in terms of binding
the Constitutional Court. Absent constitutional amendments,
we also remain concerned about the continued existence of a
1999 RS National Assembly (RSNA) resolution that explicitly
repudiates the Tribunal and the Final Award. We will need to
consider carefully how to proceed.

Comment II: What Made the Deal Possible
--------------


13. (C) Before the October 5 municipal elections, Tihic and
Covic could not have reached this type of agreement with
Dodik, and not just because a pre-election political
environment makes any meaningful political deal with an
opponent (in this case Dodik) difficult. On October 5,
voters dealt Tihic's rival -- Silajdzic -- and Covic's rival
-- Ljubic -- major political setbacks. Tihic and Covic feel
more confident politically, hence their willingness to
compromise, despite their private concerns that Dodik is no
longer the reliable partner with whom they negotiated two
years ago. Tihic and Covic are also eager to finish off
their rivals, who are down, but not yet out. Hence, the
eagerness of both men to secure Dodik's commitment for talks
on the "reconstruction of the Council of Ministers." Dodik's
motives are different. As his campaign to de-legitimize and
undermine the state has picked up pace in recent weeks, he
has come under greater pressure from the international
community, mainly the U.S. At the same time, influential
foreign policy thinkers in Western capitals have begun to
call for robust re-engagement in Bosnia, including keeping
OHR open longer than currently anticipated. Dodik wants
neither, and he needs, as one politician told us, to take the
heat off. The timing -- just before the GAERC and the PIC --
is perfect for Dodik, since the headline going into both is
now "Dodik the Compromiser," not, "Dodik the Destroyer."

Comment III: Has Dodik Changed His Spots?
--------------


14. (C) Tihic and Covic undoubtedly took a political risk --
Silajdzic and Covic are already attacking them vigorously,
particularly over their willingness to concede that
constitutional reform should be a step-by-step affair that
builds upon Dayton, rather than a process designed to draft
an entirely new document. Dodik appears to have conceded
little. He agreed to talks about constitutional reform and
government restructuring, but nothing more. He moved both
men closer to his position on Brcko. Only on state and
defense property did he appear to compromise -- he now seems
to have accepted the idea that the state will own outright
certain properties now in possession of the entities. On
immovable defense property, this constitutes a concession
beyond what Dodik accepted in the July 2007 Defense Property
Agreement. But these may have been tactical retreats to
secure his strategic goal of OHR closure and permanent
elimination of the potential threat to the RS posed by the

SARAJEVO 00001728 005 OF 005


Bonn Powers. We cannot conclude that Dodik's intentions have
changed (refs B and C) until we have seen a longer-term
pattern of constructive statements and actions from him to
counter his two-year destructive track record.
ENGLISH