Identifier
Created
Classification
Origin
09PODGORICA139
2009-06-08 14:10:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Podgorica
Cable title:  

CORRECTED COPY: DELAY IN GOVERNMENT FORMATION HIGHLIGHTS

Tags:  PGOV PREL MW 
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DE RUEHPOD #0139/01 1591410
ZNR UUUUU ZZH
P 081410Z JUN 09
FM AMEMBASSY PODGORICA
TO RUEHC/SECSTATE WASHDC PRIORITY 1343
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHPOD/AMEMBASSY PODGORICA 1432
UNCLAS SECTION 01 OF 03 PODGORICA 000139 

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E.O. 12958: N/A
TAGS: PGOV PREL MW
SUBJECT: CORRECTED COPY: DELAY IN GOVERNMENT FORMATION HIGHLIGHTS
TENSION WITHIN RULING PARTY

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UNCLAS SECTION 01 OF 03 PODGORICA 000139

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL MW
SUBJECT: CORRECTED COPY: DELAY IN GOVERNMENT FORMATION HIGHLIGHTS
TENSION WITHIN RULING PARTY

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1. (SBU) SUMMARY: Montenegro's long-running government
formation saga appears to be in its final stages, with a new GoM
likely to be appointed this week. The delay - after March 29
parliamentary elections resulted in a landslide victory for the
ruling coalition - appears to be linked to the desire of ruling
Democratic Party of Socialists (DPS) heavyweight Svetozar
Marovic to return to the GoM as PM Milo Djukanovic's principal
DPM, a move that would demote Finance Minister and Djukanovic
favorite (and anointed successor) Igor Luksic. Djukanovic
reportedly has compromised by proposing both Marovic and Luksic
as DPMs on equal footing, but this debate highlights internal
tensions within the DPS which are likely to continue. END
SUMMARY.



New GoM?

--------------




2. (SBU) Montenegrin press and a number of our high-level
contacts are reporting that PM-designate Djukanovic will present
his program and Cabinet to Parliament for approval on June 9.
This follows a June 4 meeting of the Presidency of the ruling
Democratic Party of Socialists (DPS),which blessed Djukanovic's
proposals (the party's Main Board is supposed to provide the
final stamp of approval on June 8). The DPS will now divvy up
GoM and parliamentary positions with its coalition partners -
the Social Democratic Party (SDP),the Bosniak Party (BS),and
the small Croatian Civic Initiative (HGI) - in advance of the
parliamentary vote. (Note: The new GoM and its program must be
supported by a majority of MPs; the coalition controls 48 seats
in the 81-MP Parliament, assuring easy approval.)



Delay Breeds Frustration

--------------




3. (U) Parliamentary elections were held on March 29. The
victorious coalition curtailed the initial April 23 Parliament
session due a disagreement over Deputy Speaker positions, but
regrouped on May 6 to re-elect SDP leader Ranko Krivokapic as
Speaker (the coalition decided to resolve the Deputy Speaker
issue a part of a package with the new GoM). The following day
President Vujanovic nominated then-PM Djukanovic for a sixth
term as GoM head.




4. (SBU) At that point, however, the government formation
process ground to a halt. While coalition and DPS loyalists

have assured us that it is "business as usual" at various
ministries and the GoM is meeting (in an acting capacity)
regularly, we sense a palpable frustration with the delay.
Ministry contacts complain that decisions are not being taken
because of uncertainty over their organization's leadership, for
example, and even contacts in the SDP and BS have grumbled to us
about the wait, the responsibility for which they place squarely
with the DPS.



Behind the Scenes at DPS

--------------




5. (SBU) The press has speculated that the leading cause for the
delay has been internal DPS wrangling over the possible return
of party VP and former Serbia/Montenegro State Union president
Svetozar Marovic to the GoM. Specifically, Marovic, who has
been engaged in lucrative private business ventures in his
native Budva since 2006, reportedly wanted to come back as the
only Deputy Prime Minister (or First Deputy Prime Minister),
responsible for political affairs. Also, according to the
rumors, Marovic would bring several loyalists with him into key
GoM positions.




6. (SBU) Marovic's proposal would, however, mean a demotion of
current DPM and Minister of Finance - and Djukanovic favorite -
Igor Luksic. (Note: the previous GoM had three DPMs - Luksic,
DPM for Economic Policy Vujica Lazovic, and DPM for European

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Integration Gordana Djurovic.) According to the rumors,
Djukanovic, who has tabbed Luksic as his likely successor,
resisted, while Marovic gained the support of President
Vujanovic and some other senior DPS leaders. (Note: It was
widely reported that Vujanovic, Marovic, and others opposed
Djukanovic's attempt to install Luksic as PM when Djukanovic
resigned in September 2006. Luksic's opponents argued that the
Finance Minister, then only 30, was unseasoned; Zeljko
Sturanovic was then elected to replace Djukanovic.)



Something to the Rumors?

--------------




7. (SBU) A well-placed DPS official confirmed to us June 2 that
the media speculation regarding Marovic and Luksic was correct
in basic details, although exaggerated in its description of the
tension within the party. The DPS' public line was that
Djukanovic's "busy schedule" was the primary reason for the
delay in forming the government. Our interlocutor confided
that, immediately following the election, Djukanovic told a
small group of DPS leaders that he intended to step down in
favour of Luksic. Over the course of a week, the group
persuaded him to stay on, arguing that while Luksic could be PM
in a future government, Montenegro needed stability and
Djukanovic's "charisma" in the face of the global economic
crisis. Moreover, they asserted, the voters expected Djukanovic
to stay at the helm.




8. (SBU) Our contact said that Djukanovic initially did not want
to make major changes in the government. The PM told the press
on May 21 that there would be "no significant personnel
changes," but later backtracked to deal with the thorny question
of Marovic's influence in the party. According to our source,
there was some resistance to Marovic's return because of his
"involvement and success in private business," but in general
party faithful agreed that it was "a waste" not to utilize the
talents of the powerful party Vice President.




9. (SBU) Our contact also confirmed press reports that the DPS's
2011 congress could result in a makeover of the party hierarchy.
It was "very possible" that Djukanovic would step down if the
financial situation had stabilized, he said, making way for "new
leaders and the renewal of the party."



DPS Presidency: Marovic and Luksic as DPMs?

--------------




10. (U) Media reported on June 5 that the DPS Presidency had the
previous evening approved Djukanovic's proposal to appoint both
Marovic and Luksic as Deputy Prime Ministers. The two would be
on equal footing, with Marovic responsible for political affairs
and Luksic for finance. (Note: Vujica Lazovic also will
presumably remain a DPM, since his position belongs to the SDP.
SDP contacts have told us that they expect to retain the same
ministries in the new GoM.) Final allocation of other
ministries will reportedly be approved by the DPS Main Board on
June 8. (Note: The press has reported that some ministries -
such as the Ministry of Health and Labor, the Ministry of
Tourism and Environment, and the Ministry of Economic
Development - could be divided, although our DPS contact told us
June 2 that this was unlikely, and a number of new names have
been bandied about to head various ministries.)



Comment

--------------




11. (SBU) The delay in the GoM's formation suggests that while
Djukanovic is the preeminent authority in the DPS, he must take
into account Marovic's influence within the party and strong
base of support in the coastal boomtown of Budva. Djukanovic
has made clear his desire to hand the reins of power to Luksic,
but it remains to be seen whether Luksic (who recently

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criticized Budva municipality finances) will face continued
resistance from Marovic and other senior DPS officials in the
run-up to the DPS's 2011 congress.




12. (SBU) Marovic is a public advocate of Montenegro's
Euro-Atlantic integration and there is no real daylight between
him and PM Djukanovic in terms of the country's foreign policy
goals. Although Marovic will reportedly be responsible for
political affairs, several of our non-DPS interlocutors predict
he will attempt to influence the economic ministries,
particularly the Ministry of Economic Development, in support of
his business interests in Budva. (Note: Marovic has been
linked to Russian and other investors in Budva, and in fact was
partnered with the controversial Moscow-based Mirax Group, which
is building a large apartment complex on the coast.) Over time,
the appearance of such conflicts of interests could detract from
Montenegro's broader foreign policy goals. End Comment.
KONTOS