ZAGREB WEEKLY ACTIVITY REPORT - JANUARY 14, 2009

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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

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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