MACEDONIA: CHOD'S CONCERNS ABOUT IMPACT OF MOD

S E C R E T SECTION 01 OF 02 SKOPJE 000463 SIPDIS NOFORN STATE FOR EUR/SCE E.O. 12958: DECL: 07/19/2018 TAGS: PREL MARR PGOV NATO MK SUBJECT: MACEDONIA: CHOD'S CONCERNS ABOUT IMPACT OF MOD UNDERFUNDING ON NATO BID REF: IIR 6 949 0114 08 (USDAO SKOPJE) Classified By: P/E CHIEF SHUBLER, REASONS 1.4 (B) & (D). SUMMARY -------------- ¶1. (S/NF) The GOM's July 15 budget rebalance transfers 14 million euros from the MOD to the MOI, heavily impacting future Macedonian military readiness, and calling into question its ability to meet its commitments in Iraq and Afghanistan. According to CHOD LTG Stojanovski, it also suggests the government is moving toward greater isolationism, which could negatively impact Macedonia's NATO bid. If the budget trend continues -- downsizing the MOD and other ministry budgets in order to beef up the MOI -- Stojanovski's prediction of an isolationist scenario for Macedonia could prove to be accurate. End summary. BUDGET REBALANCE: ROBBING PETER, PAYING PAUL -------------- - ¶2. (S/NF) CHOD LTG Stojanovski told DAO July 17 that he was concerned about the Gruevski government's future support for the military and the MOD's ability to meet its international commitments. He noted the July 15 mid-year budget rebalance had transferred 14 million euros from the MOD budget to the MOI budget, ostensibly to provide equipment for civilian police. He added that the Finance Minister had indicated to him that the MOD's budget would continue to drop over the coming years, while the MOI's budget grew in proportion. ¶3. (S/NF) Stojanovski complained that the Minister of Defense had not/not been consulted on the budget rebalance beforehand, and pointed out that defense spending for 2008 would now drop below the 2 percent of GDP NATO target, to about 1.9 percent. The funding shortfall, he continued, also meant that would not be adequate funding for procurement, training, or maintenance of equipment during the remainder of the calendar year. IMPACT ON IRAQ AND AFGHANISTAN DEPLOYMENTS UNCERTAIN -------------- -------------- ¶4. (S/NF) The CHOD said that, although he had not yet evaluated the impact of the budget cut on troop deployments to Iraq and Afghanistan, he was concerned about the impact of the reduction on the military's ability to train and equip the troops for the for May 2009 rotations. Without adequate funding, he believed the military would not be able to maintain its current preparedness level, ability to defend the territorial integrity of Macedonia, or its longer-term deployment commitments in Afghanistan, Iraq, Lebanon, and Bosnia. ¶5. (S/NF) Stojanovski indicated he would ask President Crvenkovski to convene a meeting of the National Security Council (President, PM Gruevski, MOD, CHOD, MOI, FM Milososki, President of Parliament, and ad hoc members) to discuss the funding shortfall, underscoring the urgency of the matter. He added that he would send a non-political message to the troops on July 21 informing them of the budget cut and the impact it would have on operations. Stojanovski noted his assessment that anticipated budget transfers would allow the MOI to train and equip its police forces to reach a readiness and capability level -- in five months -- that had taken the Macedonian military 10 years to achieve. GOM MOVING TOWARD ISOLATIONISM? -------------- ¶6. (S/NF) Stojanovski said he believed the funding cut was directly linked to the Greek veto of Macedonia's NATO bid at the Bucharest Summit in April. Having failed to receive an invitation, despite its having met NATO performance standards, Macedonia was now moving to "self-isolate," he said. He believed the MOI's police forces would gradually be strengthened over the coming years, while the military was steadily downsized. COMMENT SKOPJE 00000463 002 OF 002 -------------- ¶7. (S/NF) Although Stojanovski is close to President Crvenkovski, who has been sharply critical of government actions in recent weeks, he is also a professional soldier who has never let political expedience cloud his military judgment or assessments. We believe he is seriously concerned about the future of the military, and we will raise his concerns with the Foreign Minister and PM Gruevski next week. We note that opposition politicians raised similar concerns during parliamentary consideration of the budget re-balance earlier this week. If the current budget trend continues -- beefing up the MOI at the expense of the MOD and other ministry budgets -- then Stojanovski's grim prediction of an isolationist scenario for Macedonia could prove accurate in the end. Milovanovic