DAYTON ARTICLE IV - CONTACT GROUP BRAINSTORMS ON

UNCLAS SECTION 01 OF 03 USOSCE 000145

SENSITIVE
SIPDIS

STATE FOR VCI/CCA, VCI/NRRC, EUR/RPM, EUR/PRA, EUR/SCE,
PM/WRA
JCS FOR J5
OSD FOR ISA (PERENYI)
NSC FOR DOWLEY
USUN FOR LEGAL, POL
CENTCOM FOR CCJ5-C, POLAD
UNVIE FOR AC
GENEVA FOR CD

E.O. 12958: N/A
TAGS: PARM PREL OSCE KCFE BK HR MW SR
SUBJECT: DAYTON ARTICLE IV - CONTACT GROUP BRAINSTORMS ON
WAY AHEAD


1. (SBU) Summary: On May 15, the Contact Group (CG),absent
Italy and UK, met in Vienna with the OSCE Personal
Representative (PR) for Dayton Article IV at his request to
informally exchange views on the future of the Dayton Article
IV regime. Most agreed with Periotto's assessment and there
were no decisions taken. The CG and PR were concerned about
the potential impact of Kosovo and wanted to avoid any hasty
decisions. Washington, see para 10. End summary.


2. (SBU) Italian Brigadier General Periotto, the
Chairman-in-Office's Personal Representative (PR) for Dayton
Article IV caE*1cKA
reement.

Periotto's View
--------------


3. (SBU) Periotto began with a presentation highlighting the
many positive "technical" accomplishments of the Parties:
lowered equipment holdings and manpower; increased
transparency and confidence; a lack of significant inspection
issues; and the Parties' willingness to accept more than the
calculated minimum number of inspections. He then moved on
to the "slow but positive" trends of the "political" side of
Dayton: NATO's Partnership for Peace (PfP) for all Parties
and invitation to Croatia, and the integration into EU
structures including Croatia's candidate status. He also
noted that there still are negative trends, such as BiH's
delayed police reform, Republika Srpska's nationalism and the
potential impact of Kosovo's UDI.


4. (SBU) Periotto outlined several potential scenarios for
the future of Article IV, assessing that the Parties are
somewhere between the first two listed below:

-- Negative trends continue, requiring continued Article IV
under strong PR supervision.

-- Positive trends strengthen, allowing subsequent transfer
of ownership to the Parties, closing of the PR office, and
the Sub-Regional Consultative Commission (SRCC) becoming an
OSCE-related body similar to the Joint Consultative Group.

-- He also listed another scenario he considered unlikely:
an "implosion" occurs because of the withdrawal of one of the
Parties.

Contact Group in General Agrees with PR
--------------


5. (SBU) Germany (Richter) agreed with the PR's views on
technical issues, but commented that the Parties' equipment
ceilings are very high compared to what they probably would
receive under adapted CFE. Regarding the political side,
Richter generally concurred with the PR's assessment and
conclusion, with some exceptions (see below). U.S. rep
(Claus),emphasizing that he had no specific guidance from
Washington, agreed with Germany's assessment on the technical
issues and most of the PR's assessment on political issues.
Russia (Balakhin) shared most of Germany's assessments, but
was less optimistic about political developments in BiH,
which still lacks future vision and remains divided. France
(Meyer) agreed with Germany, adding that the situation in
Kosovo can degrade rapidly.

USOSCE 00000145 002 OF 003



Potential Impact of Kosovo UDI
--------------


6. (SBU) Richter emphasized that Articles I and X of the
General Framework Agreement for Peace in Bosnia-Herzegovina
impose territorial integrity on the Parties. This binds
Kosovo to the Article IV Area of Application (AoA) and means
that BiH cannot recognize Kosovo, for fear of similar action
by Republika Srpska. Russia began by stating that if you
want to maintain the Article IV regime, you must consider
Kosovo part of Serbia. Serbia has not yet agreed that Kosovo
is not out of the Article IV AoA. Serbia is divided and
Serbia and Montenegro are not speeding towards the EU. There
are two challenges to Article IV: Kosovo UDI and the
announcement by US of possibility of arms delivery to Kosovo.
PR advisor Gabrielle Defeo (Italy) and long-time German
military advisor Helmut Kruse (Germany) also weighed in on
Kosovo, with Kruse arguing that no Party will raise the issue
at the upcoming Review Conference. The recent inspection by
Croatia in Serbia was conducted without incident because the
issue is above the level of implementers. Richter, however,
disagreed, saying that it depends upon who is in power in
Serbia in July.


7. (SBU) During a social event hosted by the U.S. on May 28,
Serbian Senior Military Advisor, Lt. Gen. Milan Zaric told
U.S. rep (Hester) that Serbia wanted to maintain the status
quo within Article IV and did not intend to raise the issue
during the upcoming Review Conference. This was an issue for
higher level to work out, and it should not affect the
operation level, which is working well.

Transfer of Ownership to the Parties
--------------


8. (SBU) Germany, France and Russia believe it is too early
for this proposal and warned against "hasty" decisions. The
U.S. also suggested that more "tactical" ownership (i.e.,
inspection quotas and schedules) be turned over to the
Parties now, while allowing "strategic" ownership to continue
to be maintained by the PR. The U.S. also welcomed any
specific proposals by the PR, to include downsizing of the PR
office, for CG discussion. Periotto clarified that a
transfer of ownership does not mean that he or the CiO is
advocating the downsizing of the PR office and confirmed that
Italy is ready to send a replacement for him when his term of
assignment is over.

Adapted CFE
--------------


9. (SBU) Periotto believes that the Parties should transition
to the Adapted CFE Treaty after its entry-into-force. This
is several years away because current NATO members probably
would have priority for accession. Regarding the potential
for adapted CFE accession, Richter noted this is not a
short-term solution because EIF is at least a year away and
accession by the Parties will take even longer. Russia
repeated old arguments and that there probably would be no
movement on CFE until after the US election. (Comment:
Richter raised this issue with U.S. rep after the meeting,
stating that he is worried that official Russian policy is to
stonewall until after the US election. End comment.)


USOSCE 00000145 003 OF 003


Sixth Article IV Review Conference, July 2-4
--------------


10. (SBU) Periotto reminded the Contact Group that it is
usual practice for the CG to make a joint statement at Review
Conferences and that the both the CG and PR statements should
be aligned. Germany offered to provide a draft for CG
discussion and sent out a draft on May 29 (passed to
VCI/CCA). Request Washington's views on the contents of the
letter. The U.S. suggested that it might be beneficial for
the Parties to make a public announcement at the July 2008
Review Conference reaffirming their commitment to Article IV,
with perhaps the CG noting this in its statement. The
Parties also could, as appropriate, state their national
desire to join adapted CFE when possible.
FINLEY