BOSNIA - PIC REITERATES COMMITMENT TO 5-PLUS-2,

C O N F I D E N T I A L SECTION 01 OF 03 SARAJEVO 001832

SIPDIS

DEPARTMENT FOR EUR(JONES),EUR/SCE(FOOKS/STINCHCOMB); NSC
FOR BEIN; NSC FOR HELGERSON/WILSON

E.O. 12958: DECL: 01/01/2018
TAGS: PGOV PINR PHUM KCRM KDEM EU BK
SUBJECT: BOSNIA - PIC REITERATES COMMITMENT TO 5-PLUS-2,
BUT EYES CLOSURE DECISION IN MARCH 2009

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


1. (C) Summary: At the November 19-20 PIC, HiRep Lajcak and
PIC members underscored their commitment to seeing the
5-plus-2 benchmarks and conditions met in full prior to OHR
closure and transition to EUSR, but stressed a desire be in a
position to make a decision on transition at the next PIC
meeting in March 2009. Several PIC members, notably France,
Italy and Germany, suggested that they might support
transition to EUSR even if the 5-plus-2 agenda is not met.
No one supported maintaining the Bonn Powers beyond OHR's
life span. Bosnian political party leaders largely echoed
positions expressed at previous PIC meetings - the Bosniaks
and Croats urged OHR to remain open until constitutional
reform had been completed; the Serbs argued OHR was no longer
necessary and that Bosnian leaders must assume full
responsibility for their country's future. Though PIC
members welcomed the Prud/Odzak Agreement, they stressed that
the vague political agreement must be translated into
tangible outcomes and expressed concern about the escalating
nationalist rhetoric and the general lack of progress
implementing much-needed reforms. Republika Srpska (RS) PM
Milorad Dodik accused the State Prosecutor's Office and
"certain Embassies" of orchestrating political attacks on him
and the RS via an ongoing investigation into corruption
within his government, though he also pledged to cooperate
with that investigation. Bosniak member of the
Tri-Presidency Haris Silajdzic criticized the Prud/Odzak
Agreement and rejected the accusation that he had engaged in
nationalist rhetoric, adding that his comments bout genocide
in the RS was based on "the facts." End Summary.

Bosnians Split on OHR's Future (and Everything Else)
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2. (SBU) At the opening session, HiRep Lajcak and PIC
members stressed to Bosnian political party leaders and State
and entity PMs that nationalist rhetoric must cease and they
must return to the reform agenda, particularly the 5-plus-2
OHR benchmarks and conditions. Several PIC members expressed
concern over RS efforts to rollback previous reforms,
including those necessary for BiH to realize its
Euro-Atlantic aspirations, and warned that BiH was in danger
of falling behind the rest of the region if its performance
did not improve. Bosniak (SDA President Tihic and SBiH
President Silajdzic) and Croat (HDZ-BiH Covic and HDZ-1990
Ljubic) party leaders acknowledged the political deadlock,
but blamed it on the Dayton constitutional structures and
argued OHR must remain in BiH to "unblock" the governing
system until a new constitution is adopted, which would
ensure a more functional and efficient government. Serb
leaders (SNSD Dodik and PDP Ivanic) argued that OHR has
outlived its utility and now presents an obstacle to BiH's
progress towards the EU; local ownership is needed. BiH
Prime Minister Spiric and Federation Prime Minister Brankovic
sought to defend their governments' performances by offering
lengthy lists of technical "achievements" over the past two
years, but acknowledged the need for additional progress.

PIC Welcomes Prud/Odzak, Urges Implementation; Silajdzic
Defiant
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3. (SBU) HiRep Lajcak and PIC members welcomed the November
8 Tihic-Dodik-Covic agreement (aka Prud/Odzak agreement) as
representative of the type of pragmatic approach Bosnia's
leaders needed to take to unblock stalled reforms. However,
the PIC also emphasized the need to translate the largely
vague language in the Prud/Odzak agreement into concrete
action, including legislation, and called on the agreement's
signatories to work with the other party leaders to gain
their support for the agreement and its implementation.
Germany expressed concern about the parties proposed a
"constitutional law" solution on Brcko (as opposed to the
constitutional amendments proposed by the Supervisor),noting
that such a category of law did not exist in Bosnia. France
sought details on how the Prud/Odzak Agreement on State
property would be translated into action. The Russian
delegation voiced concern over anti-Dayton rhetoric, citing
President Silajdzic's September speech at UNGA where he
called for the RS to be abolished. Silajdzic defiantly
responded that he will use every platform at his disposal to
prevent the realization of "Milosevic's project" and

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categorically rejected the possibility of supporting
Prud/Odzak, as it is "harmful to BiH."

Dodik: Separatism not an Aim, but a Right
--------------


4. (SBU) Responding to a U.S. question on RS compliance with
the State Prosecutor's request for documentation, Dodik
asserted that the State Prosecutor's request was a
politically motivated "injustice" directed by unnamed
"foreign embassies" and aimed at "punishing" him and the RS.
Dodik also asserted that the State Prosecutor's Office was
acting outside its jurisdiction. Nevertheless, Dodik claimed
the RS was trying to cooperate, but the BiH Prosecutor had
refused on three occasions to meet with the RS lawyers -- a
U.S. law firm retained by the RS. Dodik committed that the
RS would comply with a BiH court order for the documents, but
would not accept the use of force to implement a subpoena on
the RS government building. (Note: The BiH State Court
issued an order for the documents on November 19; the RS
handed over documents on November 26. The State Prosecutor's
Office is in the process of reviewing the material provided
and determining whether the RS has cooperated fully and
completely with the court order. End Note) Dodik also
dismissed allegations that separatism is on the RS's agenda,
but pointedly asserted that an independence referendum
nevertheless remains its right.

European Commission: Reform Progress Stalled
--------------


5. (SBU) During the closed session on November 20, the
European Commission delegation briefed that little progress
has been made since the SAA signing in June. The
anti-corruption strategy has not been properly implemented,
public administration reform is stalled and there has been
limited progress on human rights and no concrete progress on
minority rights. The Commission also noted that the RS had
objected to implementation of 25 elements of the European
Partnership Agreement. On the economic front, there is still
no single economic space, no movement on privatization in the
Federation and the current account deficit has increased.
The one positive note was that the Justice Sector strategy
was adopted, but the Commission was quick to add that the
final document had been stripped of much of its original
substance to satisfy the RS and that there remained much more
to be done broadly in that area.

EU Plans for Transition
--------------


6. (C) EU Council Secretariat Political Director Robert
Cooper briefed on the joint Solana/Rehn paper endorsed by the
November 10 GAERC, which will serve as the basis for planning
for a transition from OHR to an EUSR. Cooper bemoaned that
the Bosnians still don't recognize that "the closer they get
to the EU the harder it gets" and that "the EU won't take in
new members that don't function." Constitutional reform is
imperative and must be done by the Bosnians themselves,
although the EU will be prepared to provide resources and
expertise, he said. Cooper made clear that the EU strategy
relies on its "attractive power" to promote reform in BiH,
but the EU recognizes the need to employ coercive power
tactically. Cooper noted that the EUSR would not be
"ordinary" - it would get into nitty-gritty issues as OHR
did, and would seek a UNSCR to provide authority for residual
Dayton oversight issues. However, the EU would not seek to
retain the Bonn Powers, as BiH should be fully sovereign in
the post-SAA phase of the accession process. Cooper said
that, without prejudice to an eventual PIC decision, the EU
would begin to flesh out the EUSR's "tool kit" in the coming
weeks. He noted the EU was looking at the possibility of
non-EU participation in the EUSR mission, akin to the current
ESDP mission in Kosovo.

PIC Members: Lip Service to 5-plus-2; Some Looking for an
Exit
-------------- --------------


7. (C) Looking ahead to the next PIC meeting, Lajcak sounded
out delegations on a possible transition decision in March

2009. He noted that in addition to 5-plus-2 progress, there
are practical issues to take into account, as OHR's budget

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and contracts only run through end of June 2009. A key
question also would be whether the Bonn Powers should be
retained in some form. The U.S. stressed that 5-plus-2 must
be implemented in full, and that a solution on Brcko, in
particular, would need to be found for the U.S. to support
closure in March. Budgetary issues should be factored in but
could not drive the decision, the U.S. stressed. The UK and
Turkey echoed the importance of implementing 5-plus-2, and
stressed the need for the EU to demonstrate that it is ready
to take over from OHR. Turkey also stressed its desire to
participate in a post-OHR IC coordination body. Germany
stressed the need for progress on 5-plus-2, but noted that
the PIC couldn't be held hostage to Bosnian obstructionism;
if OHR is no longer credible then transition should be
considered even absent progress on 5-plus-2; however, the
EUSR must be ready to take over. France and Italy reaffirmed
their support for 5-plus-2, but argued the PIC should be
flexible in determining how they are met. France suggested
that the police reform compromise might provide a model for
concluding the 5-plus-2 agenda. Canada and Japan welcomed
the EU transition plan and voiced support for transition as
soon as conditions permit. Russia acknowledged that a
decision on closure was not possible at this meeting due to
negative trends, but stressed they would seek a decision on
transition next spring. No member supported retaining the
Bonn Powers post transition.


8. (U) DAS Jones has cleared this telegram.
ENGLISH