BOSNIA - PM SPIRIC MOVES FORWARD (FINALLY) ON

UNCLAS SARAJEVO 000452 SIPDIS SENSITIVE DEPARTMENT FOR EUR(JONES),EUR/SCE(FOOKS/MCGUIRE); NSC FOR HELGERSON E.O. 12958: N/A TAGS: PGOV PINR PREL KDEM EU BK SUBJECT: BOSNIA - PM SPIRIC MOVES FORWARD (FINALLY) ON STATE PROPERTY INVENTORY ¶1. (SBU) On April 9, Chairman of the Council of Ministers (CoM) Nikola Spiric (Serb) agreed to place the long overdue decision on an inventory of state property on the CoM agenda. Spiric also agreed that the scope of the inventory should be consistent with the March 26 communique of the Peace Implementation Council (PIC) Political Directors. The CoM agreed to establish a working group to start the inventory process. For several months Spiric had been blocking CoM consideration of the inventory decision and attempting to inappropriately limit its scope, which would have prevented the state from receiving title to property it required to function. Spiric came under heavy criticism from most PIC delegations during the March 25-26 PIC for his stonewalling. In an April 7 meeting, the Ambassador warned Spiric that Washington was unhappy with his intransigence, and stressed that Spiric would find his meetings during an upcoming visit to Washington "uncomfortable" if he did act on the inventory. The EU Foreign Ministers troika (Swedish FM Bildt, French FM Kouchner, and Czech FM Schwarzenberg) just visited Bosnia and also pressed the inventory issue hard in an April 8 meeting with Spiric. Comment: What Next on State Property -------------- ¶2. (SBU) Three things are required to meet the PIC's objective of "an acceptable and sustainable resolution" of state property: 1) a properly conducted inventory; 2) an intergovernmental agreement between the state, entities, and Brcko District, which includes the list of assets allocated to each level of government; and, 3) a State Property Law that defines the procedures for implementing the settlement. The intergovernmental agreement should be an integral part of the law, incorporated as an annex. The long overdue progress on the inventory is welcome, and it was a necessary prerequisite for drafting an intergovernmental agreement. That said, the state and entity governments will need to agree on who gets what property, something that could easily bog down. The intergovernmental agreement will likely require significant facilitation and lobbying efforts by OHR and the international community. Finally, political leaders remain deeply divided over fundamental points on the law, particularly how state property should be registered. Bottom line: there is still a long way to go on state property. CEFKIN