US embassy cable - 03ZAGREB2391

C O N F I D E N T I A L  ZAGREB 002391 
 
SIPDIS 
 
 
E.O. 12958: DECL: 11/12/2013 
TAGS: PGOV, PREL, HR, Political Parties/Elections 
SUBJECT: CROATIAN ELECTIONS: GOOD TIME TO STAY ON SIDELINES 
 
Classified By: Nicholas Hill, Polecon Counselor, for Reasons 1.5 (B) an 
d (D) 
 
 
1.   (C) Summary: Elections are less than two weeks away and 
remain too close to call.  Both sides have complained that 
the U.S. favors the other side.  In contrast to 2000, when 
post played a rather prominent role shepherding the cats that 
made up Croatia's democratic opposition parties into 
something like a workable coalition, we have remained more 
publicly neutral this time.  If we favor any side it would be 
the ruling coalition under Prime Minister Racan's Social 
Democratic Party -- but, unlike in 2000, what the current 
election season is putting on display is a range of parties 
with many shades of gray.  HDZ has come a long way since 
Tudjman times, but it is not fully reformed.  SDP has moved 
Croatia in the right direction -- toward regional 
reconciliation and Euro-Atlantic institutions -- but it has 
been a big disappointment when juxtaposed against 
expectations at the beginning of its mandate.  End summary. 
 
2.   (C) There is a range of issues we will be looking to the 
next government to manage -- cooperation with the War Crimes 
Tribunal, facilitation of refugee returns, and regional 
reconciliation are key issues that Croatia faces as part of 
overcoming its wartime legacy.  Euro-Atlantic integration and 
implementing the wrenching reforms required of any transition 
country will also continue to figure prominently.  HDZ 
President Ivo Sanader argues to us that a government he heads 
will be much more friendly to the U.S. and sensitive to our 
priorities in the bilateral relationship.  His likely foreign 
minister, Miomir Zuzul, Croatia's Ambassador in Washington 
during the Tudjman era, is even more aggressive in making the 
case.  We like some of the rhetoric coming out of HDZ these 
days compared to the bad old days under Tudjman, but remain 
skeptical about follow through. 
 
Overcoming Wartime Legacy 
------------------------- 
 
3.   (C) Sanader knows what priority we attach to Croatia's 
cooperating fully with the War Crimes Tribunal and in private 
meetings assures us he has no intention to slack off compared 
to the current coalition.  Quite the contrary, he argues that 
an HDZ-led government will be "much more efficient" in 
working with The Hague.  This is a comparison that does not 
offer much reassurance given the current government's rather 
indifferent record of cooperation.  Moreover, Sanader's party 
has several key people who have rather cozy ties to potential 
war criminals.  Indeed, near the top of its list in Osijek is 
Branimir Glavas, an HDZ leader in the early nineties who 
played a considerable role in stirring up ethnic tensions -- 
and who many believe belongs in the The Hague himself.  Among 
his potential coalition partners, Sanader will have Drazen 
Budisa, leader of the Croatian Liberal Party (HSLS).  He has 
demanded that Croatia must change its terms of Cooperation 
with ICTY.  A former coalition partner of Racan's, he has 
demonstrated already that his threats can be more than 
bluster. 
 
4.   (C) Another priority for the U.S. in its relations with 
Croatia is seeing progress on refugee returns.  The current 
government has taken criticism for not doing enough to 
facilitate the return of ethnic Serbs expelled in the 
mid-nineties.  OSCE and UNHCR have led the way in pointing 
out the Racan government's deficiencies on this front and 
pointed to the lack of follow through.  Statements of intent 
are made in Zagreb about what will be done to facilitate 
returns and then little happens at the local level.  Sanader 
has told us he understands the importance of facilitating 
returns -- but we have seen precious little in terms of an 
HDZ strategy for pushing this issue forward.  (Although at 
Sanader's instruction when trying to set up a lunch meeting 
with the Ambassador, HDZ did forward to us a copy of a speech 
by Glavas underscoring the importance of inter-ethnic 
reconciliation.  We cannot confirm if the speech was actually 
delivered.) 
 
5.   (C) Another priority for the U.S. is seeing Croatia 
improve its relations with its neighbors.  On this issue on 
balance the current government has done well -- and is less 
vulnerable to an argument that HDZ could do better to advance 
our agenda.  Indeed, one of the first things the Racan 
government did on coming to office was to stop undermining 
Dayton by meddling unconstructively in BiH's Bosnian-Croat 
community.  Many outstanding issues remain, including 
ratifying the Ploce Port Agreement, but most observers agree 
that relations are much more normal than during Tudjman 
times.  Similarly, relations with Belgrade are much better. 
The two sides are moving constructively on a number of 
fronts, including by signing a landmark temporary agreement 
over the Prevlaka peninsula, which enabled the UN to shut 
down its observer mission there at the end of 2002.  Given 
all the bad blood, it is implausible that HDZ could step in 
and push regional reconciliation more effectively. 
 
Euro-Atlantic Integration 
------------------------- 
 
6.   (C) We support Croatia's integration into NATO and the 
EU, and have applauded the Racan government for pushing this 
process forward -- although it is not clear that continued 
progress hinges on the results of next week's elections. 
Certainly much has been done in the past four years.  The 
Prime Minister, particularly in recent months, has made EU 
integration the centerpiece of its mandate.  Quite 
constructively, the government has made clear that difficult 
decisions on ICTY cooperation and a range of reform issues 
will have to be made as part of this effort to move toward EU 
membership.  The government signed a Stability and 
Association Agreement with the European Commission in January 
2002 and has been working with the EC on membership 
requirements ever since. 
 
7.   (C) The problem is that the difficult decisions that 
Racan has been willing to talk about are not getting resolved 
and Croatia -- read, this government -- is only now starting 
to pay the price.  The SAA is bogged down.  If the British 
and Dutch do not ratify it by year-end -- their chief gripe 
is over the government's inability to track down Ante 
Gotovina, at present Croatia's only known ICTY indictee -- 
the EU's ten new members will enter in May and be asked to 
ratify it too.  As a result of the delays, the notion that, 
to get into Europe, Croatia needs Racan is looking less 
convincing all the time.  And for his part, Sanader and 
others in leadership positions in HDZ have been making some 
of the right noises about Euro-Atlantic integration.  The HDZ 
leader may be in a position to pull off a Nixon-to-China: it 
is doubtful that he would let problems concerning refugee 
returns or the War Crimes Tribunal derail Croatia's progress 
on EU integration. 
 
8.   (C) Sanader and Zuzul argue that they will work hard to 
keep EU integration on track and work even harder than the 
current government on NATO integration.  The jury is out for 
a while, but their case has some resonance.  Racan has 
benefited from the goodwill shown him ever since he came to 
office.  Sanader will benefit from no such goodwill, and 
bromides will not pass for policy measures.  He will have to 
bend over backward to answer the concerns about whatever 
coalition he forges, and deliver on substance not rhetoric. 
If he comes to power, whatever he does, there are plenty of 
skeptics in EU capitals and Croatia will inevitably lose time 
on moving toward the EU and NATO -- Sanader's task will be to 
move quickly to put the doubters at ease.  We are not 
convinced yet that he will succeed, particularly given some 
of the problematic, retrograde people associated with any 
HDZ-led coalition.  But it would also be unfair to suggest 
that an HDZ victory would automatically poison Croatia's EU 
and NATO chances -- particularly if substance replaces style. 
 
 
Conclusion 
---------- 
 
9.   (C) In part because the choices in Croatia's political 
orbit are so uninspiring, we are more ambivalent and have 
played a less active role in these elections compared to four 
years ago.  The current government has the right instincts 
about what needs to be done, but not the stomach to carry 
through on the implementation.  It has also been lamentably 
unresponsive on some of our own priorities -- in particular, 
its policy concerning Iraq during the lead up to war was 
confusing and unhelpful; it pandered needlessly to its old 
World War II allies Germany and France.  At the same time, 
after only four years out of power, HDZ has baggage and its 
return to power will leave many uncomfortable about the 
future.  We suspect that an HDZ-led coalition would look less 
like Tudjman revisited and more like Viktor Orban's coalition 
in Hungary until last year -- nationalist and somewhat 
roguish, with a lot of kleptocrats taking prominent 
positions, but not necessarily a malignant force for 
instability.  All in all, this is a good time to stay on the 
sidelines. 
FRANK 
 
 
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