ZAGREB UPDATE: JUNE 26, 1992

UNCLAS SECTION 01 OF 03 ZAGREB 01056 SIPDIS VIENNA ALSO FOR USDEL CSBM; ISLAMABAD FOR POL/JPOGUE; HELSINKI FOR CSCE - E.O. 12356:N/A TAGS: PGOV PREL PHUM ECON EFIN HR BK MOPS PREL PHUM ECON EFIN HR BK MOPS PREL PHUM ECON EFIN HR BK MOPS SUBJECT: ZAGREB UPDATE: JUNE 26, 1992 REF: PARIS 17530 (NOTAL) SUMMARY -------------- ¶1. LOCAL PRESS REPORTS IT IS ALL QUIET TODAY ON THE DRNIS FRONT, BUT UNPROFOR HAS POSTPONED ITS TAKEOVER OF SECTOR SOUTH UNTIL THE CEASEFIRE IS RESPECTED. UNCLASSIFIED UNCLASSIFIED PAGE 03 ZAGREB 01056 01 OF 03 261351Z PRESIDENT TUDJMAN TOLD THE FRENCH PAPER "LE FIGARO" THAT CROATIA WILL NOT IGNORE THE PERIL OF CROATIANS IN BOSNIA-HERCEGOVINA BUT CROATIAN ARMY FORCES ARE NOT NOW ENGAGED. MILITARY COURT OFFICIALS IN OSIJEK ARE BUSY WITH PROSECUTIONS OF PROPERTY CRIMES AND INCREASED VIOLENCE. THE NATIONAL BANK PLANS A TIGHT MONETARY POLICY IT HOPES WILL CAP QUARTERLY INFLATION AT 52 PERCENT. END SUMMARY. ALL QUIET ON THE DRNIS FRONT -------------- ¶2. NO FURTHER ACTION HAS BEEN REPORTED IN THE ZAGREB PRESS FROM THE BATTLEFIELD AROUND SIBENIK, INCLUDING THE MILJEVCI PLATEAU. THE LATTER AREA, PART OF THE "PINK ZONE" SOME 15 KMS FROM SIBENIK, WAS THE SITE OF THE CROATIAN MILITARY ADVANCE EARLIER THIS WEEK WHICH PUT INTO JEOPARDY UNPROFOR'S EFFORTS TO TAKE OVER SECTOR SOUTH. UNPROFOR DELAYS TAKEOVER OF SECTOR SOUTH -------------- ¶3. AT A JUNE 25 MEETING IN ZADAR, UNPROFOR COORDINATOR FOR CIVILIAN QUESTIONS, VICTOR ANDREJEV, INFORMED THE REPRESENTATIVES OF THE ZADAR, GRACAC, OBROVAC, BENKOVAC, BIOGRAD, SINJ, AND KNIN COUNTIES THAT UNPROFOR HAS POSTPONED THE TAKEOVER OF FULL CONTROL OVER SECTOR SOUTH. ANDREJEV SAID UNPROFOR WILL TAKE CONTROL OF SECTOR SOUTH WHEN THE CEASEFIRE IS "RESPECTED." UNCLASSIFIED UNCLASSIFIED PAGE 04 ZAGREB 01056 01 OF 03 261351Z MILITARY PROSECUTORS CRACKING DOWN ON LAWLESSNESS -------------- --- ¶4. THE CROATIAN MILITARY PROSECUTOR FOR OSIJEK, UNCLASSIFIED NNNN UNCLASSIFIED PAGE 01 ZAGREB 01056 02 OF 03 261352Z ACTION EUR-01 INFO LOG-00 AGRE-00 AID-01 AMAD-01 CEA-01 CIAE-00 PFIP-01 CTME-00 C-01 DODE-00 ITCE-00 CISA-02 DS-00 EAP-01 EB-01 EXME-00 E-01 FRB-01 HA-09 H-01 INRE-00 INR-01 IO-19 ITC-01 JUSE-00 LAB-04 L-03 ADS-00 NEA-01 NSAE-00 OIC-02 OMB-01 OPIC-08 PA-02 PM-01 PRS-01 P-01 RP-10 SCT-03 SDEL-01 SIL-01 SNP-01 SP-01 SR-01 SSO-00 SS-01 STR-20 T-01 USIE-00 /107W -------------- 4383B6 261352Z /38 O 261351Z JUN 92 FM AMCONSUL ZAGREB TO SECSTATE WASHDC IMMEDIATE 1256 INFO AMEMBASSY BELGRADE IMMEDIATE USIA WASHDC 1707 USDOC WASHDC AMEMBASSY ANKARA AMEMBASSY ATHENS AMEMBASSY BEIJING AMEMBASSY BONN AMEMBASSY BRUSSELS AMEMBASSY BUDAPEST AMEMBASSY HELSINKI AMEMBASSY ISLAMABAD AMEMBASSY KIEV AMEMBASSY LISBON AMEMBASSY LONDON AMEMBASSY LUXEMBOURG UNCLASSIFIED UNCLASSIFIED PAGE 02 ZAGREB 01056 02 OF 03 261352Z AMEMBASSY MADRID AMCONSUL MILAN AMEMBASSY MOSCOW AMCONSUL MUNICH AMEMBASSY PARIS AMEMBASSY ROME AMEMBASSY THE HAGUE AMEMBASSY VIENNA USMISSION USNATO USMISSION USUN NEW YORK USEC BRUSSELS WHITE HOUSE WASHDC 0580 USMISSION GENEVA DEPTTREASURY WASHDC UNCLAS SECTION 02 OF 03 ZAGREB 01056 SIPDIS VIENNA ALSO FOR USDEL CSBM; ISLAMABAD FOR POL/JPOGUE; HELSINKI FOR CSCE - E.O. 12356:N/A TAGS: PGOV PREL PHUM ECON EFIN HR BK MOPS PREL PHUM ECON EFIN HR BK MOPS PREL PHUM ECON EFIN HR BK MOPS SUBJECT: ZAGREB UPDATE: JUNE 26, 1992 BORIS BOBETIC, TOLD A PRESS CONFERENCE THAT HIS OFFICE IS INVESTIGATING A GREATLY INCREASED NUMBER OF CRIMINAL OFFENCES IN EASTERN SLAVONIA, ESPECIALLY THEFT, ILLEGAL ARMS SALES, AND ATTACKS ON PRIVATE HOMES, SHOPS, AND CARS. BOBETIC SAID HE HAS RECEIVED 1,444 COMPLAINTS AGAINST 8,396 INDIVIDUALS SO FAR THIS YEAR. SOME 6,000 CASES HAVE BEEN AJUDICATED; UNCLASSIFIED UNCLASSIFIED PAGE 03 ZAGREB 01056 02 OF 03 261352Z THE OTHERS ARE UNDER INVESTIGATION. INDICTMENTS ARE PENDING AGAINST 2,446 PERSONS, INCLUDING 450 SOLDIERS. THE CROATIAN MINISTRY FOR DEFENSE ALSO REPORTEDLY PLANS TO PURSUE 30 DRAFT DODGERS. TUDJMAN'S "LE FIGARO" INTERVIEW -------------- ¶5. PRESIDENT FRANJO TUDJMAN TOLD THE PARIS "LE FIGARO" THAT "IF WAR CONTINUES IN BOSNIA AND HERCEGOVINA, CROATIA WILL HAVE TO INTERVENE." ACCORDING TO TUDJMAN, CROATIA IS FOR A PEACEFUL SOLUTION IF THIS IS POSSIBLE. IN CASE A MILITARY INTERVENTION WOULD BE NECESSARY TO RESTORE THE PEACE, THE PRESIDENT IS FOR MORE EFFICACIOUS MEASURES SUCH AS AN AIR AND NAVAL BLOCKADE BY ALLIED AND/OR NATO FORCES. THE MAIN PART OF TUDJMAN'S INTERVIEW WAS DEDICATED TO CROATIAN-BOSNIAN RELATIONS. HE STRESSED AGAIN THAT NO MILITARY PACT HAS BEEN SIGNED BETWEEN CROATIA AND BOSNIA-HERCEGOVINA. HE POINTED OUT THAT THE GOAL OF CROATS AND MUSLIMS IS TO ESTABLISH MILITARY COOPERATION WHICH WOULD ENABLE THEM TO DEFEND THEMSELVES FROM AGGRESSION IN B-H. IF CROATS IN NEIGHBORING B-H WOULD BE THREATENED WITH ANNIHILATION, CROATIA WILL BE OBLIGED "TO DO SOMETHING TO HELP THEM." TUDJMAN ASSERTED THAT AT THE MOMENT NO REGULAR CROATIAN ARMY IS FIGHTING IN B-H. (EMBASSY PARIS HAS PROVIDED A FULLER VERSION OF THIS INTERVIEW IN REFTEL.) NATIONAL BANK PLAN HOPES TO CAP INFLATION UNCLASSIFIED UNCLASSIFIED PAGE 04 ZAGREB 01056 02 OF 03 261352Z -------------- ¶6. THE COUNCIL OF THE NATIONAL BANK OF CROATIA AT ITS JUNE 25 SESSION ESTABLISHED A MONETARY-CREDIT POLICY FOR THE THIRD QUARTER OF 1992 WHICH IT CONSIDERS "RESTRICTIVE" AND WHICH WILL TRY TO CONTROL UNCLASSIFIED NNNN UNCLASSIFIED PAGE 01 ZAGREB 01056 03 OF 03 261353Z ACTION EUR-01 INFO LOG-00 AGRE-00 AID-01 AMAD-01 CEA-01 CIAE-00 PFIP-01 CTME-00 C-01 DODE-00 ITCE-00 CISA-02 DS-00 EAP-01 EB-01 EXME-00 E-01 FRB-01 HA-09 H-01 INRE-00 INR-01 IO-19 ITC-01 JUSE-00 LAB-04 L-03 ADS-00 NEA-01 NSAE-00 OIC-02 OMB-01 OPIC-08 PA-02 PM-01 PRS-01 P-01 RP-10 SCT-03 SDEL-01 SIL-01 SNP-01 SP-01 SR-01 SSO-00 SS-01 STR-20 T-01 /107W -------------- 4383C2 261353Z /38 O 261351Z JUN 92 FM AMCONSUL ZAGREB TO SECSTATE WASHDC IMMEDIATE 1257 INFO AMEMBASSY BELGRADE IMMEDIATE USIA WASHDC 1708 USDOC WASHDC AMEMBASSY ANKARA AMEMBASSY ATHENS AMEMBASSY BEIJING AMEMBASSY BONN AMEMBASSY BRUSSELS AMEMBASSY BUDAPEST AMEMBASSY HELSINKI AMEMBASSY ISLAMABAD AMEMBASSY KIEV AMEMBASSY LISBON AMEMBASSY LONDON AMEMBASSY LUXEMBOURG AMEMBASSY MADRID UNCLASSIFIED UNCLASSIFIED PAGE 02 ZAGREB 01056 03 OF 03 261353Z AMCONSUL MILAN AMEMBASSY MOSCOW AMCONSUL MUNICH AMEMBASSY PARIS AMEMBASSY ROME AMEMBASSY THE HAGUE AMEMBASSY VIENNA USMISSION USNATO USMISSION USUN NEW YORK USEC BRUSSELS WHITE HOUSE WASHDC 0581 USMISSION GENEVA DEPTTREASURY WASHDC UNCLAS SECTION 03 OF 03 ZAGREB 01056 SIPDIS VIENNA ALSO FOR USDEL CSBM; ISLAMABAD FOR POL/JPOGUE; HELSINKI FOR CSCE - E.O. 12356:N/A TAGS: PGOV PREL PHUM ECON EFIN HR BK MOPS PREL PHUM ECON EFIN HR BK MOPS PREL PHUM ECON EFIN HR BK MOPS SUBJECT: ZAGREB UPDATE: JUNE 26, 1992 INCOME AND PRICES. IT EXPECTS NEXT QUARTER INFLATION WILL BE HELD TO 15 PERCENT PER MONTH. THE MONEY SUPPLY WILL BE ALLOWED TO GROW BY 45.9 PERCENT, AN INCREASE FROM THE PRIMARY ISSUE OF SOME 29.4 BILLION DINARS. THE COUNCIL OF THE NATIONAL BANK HAS STATED THAT IT WILL HOLD ON TO THIS STRICT MONETARY POLICY DESPITE PRESSURES TO LOOSEN UP. UNCLASSIFIED UNCLASSIFIED PAGE 03 ZAGREB 01056 03 OF 03 261353Z EINIK UNCLASSIFIED NNNN