MACEDONIA: PM GRUEVSKI SUBMITS NEW GOVERNMENT

UNCLAS SECTION 01 OF 02 SKOPJE 000453

SIPDIS

STATE FOR EUR/SCE

E.O. 12958: N/A
TAGS: PREL PGOV PINR MK
SUBJECT: MACEDONIA: PM GRUEVSKI SUBMITS NEW GOVERNMENT
PROGRAM AND LINEUP

SUMMARY
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1. (SBU) PM Gruevski's new government program, submitted to
parliament on July 12, is heavy on economic goals but also
includes a commitment to Euro-Atlantic integration, resolving
the name dispute with Greece, combating crime and corruption,
improving inter-ethnic relations (including Framework
Agreement implementation),and providing quality education.
Gruevski's new cabinet lineup includes mostly old faces, with
the interior, foreign affairs, justice and finance portfolios
remaining unchanged. New coalition partner DUI picks up
several key ministries, including health, self-government,
and labor, as well as the deputy PM for Framework Agreement
implementation. Gruevski will have to ensure that, in
implementing the new governing platform, expected to be
approved in parliament by July 26, the government does not
neglect the political issues necessary to provide a solid
foundation for sustained internal stability and economic
growth. End summary.

GOVERNMENT PROGRAM: FOCUS ON ECONOMIC GROWTH...
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2. (U) PM Gruevski submitted the new governing coalition
(VMRO-DUI-PEI) program for 2008-2012, and the list of
proposed cabinet ministers, to the parliament on July 12.
Like the previous government platform, the five key strategic
goals of the new program focus heavily on enhancing economic
growth and development. Individual goals include 6% annual
GDP growth, an increase in domestic and foreign investment,
lower unemployment, improved infrastructure, and development
of agriculture.

...NATO/EU MEMBERSHIP, NAME ISSUE, CRIME & CORRUPTION,
INTER-ETHNIC RELATIONS, EDUCATION
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3. (U) The platform's five strategic goals include NATO and
EU membership, as well as resolution of the name issue with
Greece in a manner that "does not endanger national
identity." The program describes steps to more effectively
combat crime and corruption, to enhance inter-ethnic
relations (including full implementation of the 2001 Ohrid
Framework Agreement),and to boost investment in education.
The parliament is expected to vote on and approve (given
Gruevski's 82-seat majority) the new coalition program and
list of ministers not later than July 26.

OTHER GOALS
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4. (U) In addition to the program's strategic goals, the
document includes such objectives as worldwide promotion of
the "Macedonian language, culture and identity;" ensuring an
independent judiciary and robust rule of law; working toward
a healthier nation in which there is respect for family and
traditional values; and steps to enhance the efficiency and
transparency of central and local government. The government
wants wages to increase by 10% by October of this year, and
by another 10% by October 2009. Pensions are expected to
increase by nearly 30%, compared to rates in effect in
December 2007.

MINISTERIAL LINEUP: MOSTLY OLD FACES...
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5. (SBU) The "new" cabinet lineup is mostly familiar, with
the ministers of interior, foreign affairs, justice, finance,
agriculture, and transportation remaining unchanged. DUI
received the ministries of health, economy, labor and social
affairs, local self-government, and environment, in addition
to the deputy PM for Framework Agreement implementation (to
be headed by DUI President Ali Ahmeti's Chief of Staff,
Abdulakim Ademi). The PM's Chief of Staff, Martin Protoger,
told us July 13 that the coalition talks on the new lineup
went smoothly, with DUI demonstrating constructive political
flexibility.

...SOME SURPRISES

SKOPJE 00000453 002 OF 002


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6. (SBU) In a surprise move, VMRO appointed former Local
Self-Government Minister Zoran Konjanovski as Minister of
Defense. Konjanovski, widely praised as an able
administrator and competent technocrat, nevertheless will be
hampered by his lack of English-language capability and
dearth of military affairs experience. According to the PM
Chief of Staff Protoger, DUI showed no interest in MOD
portfolios for its cadre. Another surprise appointment was
that of GOM Spokesman Ivica Bocevski as Deputy Minister for
Euro-Integration. Bocevski, a political crossover from
opposition SDSM ranks, is a former Ron Brown scholar, chief
of staff for the deputy PM for economic affairs, founder of
the MFA's foreign policy journal, and a co-drafter of
Macedonia's lustration law.

COMMENT
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7. (U) The heavy emphasis on economic issues in the platform
is a carryover from Gruevski's first term in office,
signaling his determination to stake his political reputation
on an economic upturn that will slash high unemployment and
raise living standards dramatically. At the same time, the
substantial wage and pension increases in the package are
likely to add to existing inflationary pressures,
jeopardizing the stable macroeconomic climate that has helped
make Macedonia a more attractive business and investment
destination. In addition, Gruevski will have to ensure that
the focus on economic growth does not deflect efforts to
resolve the political issues (inter-ethnic relations, rule of
law, working with the opposition) that can provide a solid
foundation for sustained internal stability and economic
growth.
Milovanovic