ZAGREB WEEKLY ACTIVITY REPORT - JANUARY 14, 2009

UNCLAS SECTION 01 OF 02 ZAGREB 000024 SIPDIS FOR EUR/SCE, EUR/PPD, EUR/RPM AND EUR/ERA OSD FOR POPOVICH E.O. 12958: N/A TAGS: PREL ECON MASS HR SI SR MW SUBJECT: ZAGREB WEEKLY ACTIVITY REPORT - JANUARY 14, 2009 ¶1. (U) CROATIAN NATIONAL BANK GOVERNOR NAMED CENTRAL BANKER OF THE YEAR: Croatian National Bank (HNB) governor Zeljko Rohatinski has been named both the European Central Banker of the Year and World Central Banker of the Year by The Banker magazine, a publication of the Financial Times. The award noted the success of HNB policies since 2006 that restricted the increase in Croatian banks' foreign currency loan exposure. COMMENT: While the HNB received many complaints about these restrictive policies, they proved prescient as the global financial crisis developed last fall. Despite foreign ownership of almost all of Croatia's major banks, by all accounts the banking sector remains stable and is one bright spot in a difficult economic climate for the country. (DWestfall) ¶2. (SBU) NO MEETING BETWEEN ZAGREB AND LJUBLJANA; ITALIANS URGE SOLUTION OF BORDER DISPUTE: State Secretary for Political Affairs, Bianca Matkovic, met with the Slovenian Ambassador to Croatia late last week to inform Slovania that Croatian PM Sanader would not accept Slovenian Premier Borut Pahor's invitation to meet one-on-one regarding the border dispute. The Croatian side is insisting representatives of the EU should also be present at such a meeting. At the same time, during his Jan. 12-13 visit to Croatia, Italian FM Frattini urged both sides to resolve the dispute quickly, and emphasized that the Czech EU presidency could act as a facilitator to help remove the border impasse from further impeding Croatia's EU bid. A diplomat from the Italian Embassy told us that Frattini had quite deliberately chosen to note in his public comments that "bilateral issues" should not be dragged into EU accession negotiations. The Sanader government was quick to rebut "rumors" that the Italian Foreign Minister had privately urged Zagreb to make some compromises on the dispute in order to move the issue to international arbitration. Meanwhile, the bilateral border commission established after the Bled agreement to firm up the legal terms and the scope of a potential arbitration is set to meet again in Slovenia on January 28--its last meeting was in October, 2008 in Umag, Croatia. (DMeges) ¶3. (U) MONTENEGRIN FM ROCEN VISITS ZAGREB: In a meeting on January 14, PM Sanader and FM Rocen discussed the common goals of the two countries regarding Euro-Atlantic integration. Sanader congratulated FM Rocen on Montenegro's application for EU membership candidate status and for joining the Adriatic Charter. Sanader also confirmed Croatia's willingness to share Zagreb's experience regarding the Euro-Atlantic integration processes. Sanader also accepted an invitation to visit Montenegro soon. Commenting on the work of the Croatian-Montenegrin commission in charge of preparing proceedings for the demarcation of the maritime border between the two countries before the ICJ, FM Jandrokovic noted that both countries wanted to solve the issue in a "civilized and European manner where both parties can be satisfied." Jandrokovic declined to say whether he was thinking of the similar border dispute with Slovenia, which Croatia would also like to refer to the ICJ, when he made the comments. (PD'Amico) ¶4. (U) SANADER SUGGESTS HE MAY SOON VISIT BELGRADE; CROATIAN AMBASSADOR BEGINS WORK IN KOSOVO: The press reported that PM Sanader on January 12, in a meeting with collation partners, reportedly said that he was ready to visit Belgrade again. Sanader mentioned the idea while giving a readout of his call with President Tadic last week about the gas cutoff. A possible complication for bilateral relations with Serbia would be the potential visit of FM Jandrokovic to Kosovo in the near future to hold a ceremony to open the Croatian Embassy. On January 14 Croatian Ambassador to Kosovo Zlatko Kramaric presented his credentials to President Sejdiu. (PD'Amico) ¶5. (U) CANADA APPROVEES NATO ACCESSION PROTOCOL: On January 14 the MFA reported it received notification that Canada has approved Croatia's NATO Accession Protocol. Canadian Defense Minister Peter MacKay discussed the step with the GoC on January 14 during his visit to Croatia. MacKay also praised Croatia for its contributions to peacekeeping operations, particularly ISAF. The MFA issued a press release stating that Canada was the 17th country to approve the protocol. (PD'Amico) ¶6. (U) ICITAP PROGRAM DONATES EQUIPMENT TO CROATIAN POLICE FUGITIVE TASK FORCE: The Embassy's ICITAP police training program on January 14 ZAGREB 00000024 002 OF 002 donated a variety of equipment to the Croatian Police's new Fugitive Task Force. The recent creation of this Task Force is a direct outcome of previous ICITAP-sponsored programs in cooperation with the US Marshals Service to train Croatian officials on fugitive tracking and apprehension and the management of task forces. Equipment donated included "throw cameras" with remote control and monitoring capability, high powered optical binocular field glasses, night vision equipment, and a digital camera with a high-power zoom lens. This equipment will significantly increase the Croatian police's surveillance capabilities. (VDjukic) ¶7. (U) CROATIA RECEIVES ARMORED VEHICLES FOR ISAF TRAINING: Croatia on Jan. 7 received two High Mobility Multi-Purpose Wheeled Vehicles (HMMWVs) from U.S. Army Europe. These HMMWVs are leased for one year through the bilateral Acquisition and Cross-Servicing Agreement (ACSA),and provides the Croatian military with the means to train and familiarize their soldiers on the vehicles prior to their deployment to Afghanistan to establish a new OMLT in support of the Afghan National Army. The vehicles were already in use for training of Croatian soldiers the day after their arrival in country. Croatian instructors had been trained in Minnesota last December, under Croatia's State Partnership program. Two Minnesota National Guardsmen were at the Croatian training sessions this week to assess the quality of the Croatian trainers and ensure the instruction is up to standard. (CDavis) BRADTKE