US embassy cable - 04LJUBLJANA85

UNCLAS  LJUBLJANA 000085 
 
SIPDIS 
 
 
SENSITIVE 
 
DEPT FOR EUR/NCE, EUR/RPM 
 
E.O. 12958: N/A 
TAGS: MARR, PREL, PGOV, PINR, SI, NATO 
SUBJECT: SCENESETTER FOR VISIT OF GEN JAMES L. JONES, SACEUR 
 
REF: CDR USEUCOM ALT SHAPE BE 131000Z JAN 04 
 
1.  (SBU) While you will be wearing your NATO hat during your 
11-12 February visit to Slovenia, you may wish to emphasize 
the following shared U.S. and NATO priorities during your 
discussions with Slovenian officials: 
 
-- Slovenia's bilateral and NATO commitment to bring defense 
spending to 2% of GDP by 2008; 
 
-- increased Slovenian contributions to Operation Enduring 
Freedom and Operation Iraqi Freedom; 
 
-- Slovenian efforts to share the country's successful 
transition experience with others in the region; 
 
-- staying the course on military reform and 
professionalization. 
 
--------------------- 
Political Environment 
--------------------- 
 
2.  (SBU) Your visit will include a meeting with President 
Janez Drnovsek, among Slovenia's most powerful politicians 
for the last fifteen years.  Drnovsek hand picked Anton 
"Tone" Rop to succeed him as Prime Minister when Drnovsek won 
the Presidency in December 2002.  Since becoming Prime 
Minister, Rop's relationship with Drnovsek has deteriorated 
some as Rop increasingly governed according to his (vice 
Drnovsek's) desires.  With the lessening of Drnovsek's direct 
support, Rop faced challenges from contemporaries within 
their party (LDS), from contenders in other governing 
coalition parties (including ZLSD's Borut Pahor), and from 
the opposition.  This, combined with his inexperience in 
foreign affairs, restricted his ability to be helpful on 
domestically unpopular issues such as Iraq and the ICC. 
Although Rop has successfully consolidated his control of the 
LDS, it is not clear whether he or the governing coalition 
will survive the Fall 2004 parliamentary elections.  However, 
it is unlikely that Slovenia's foreign policy will change 
dramatically no matter who wins. 
 
---------------- 
Defense Spending 
---------------- 
 
3.  (SBU) PM Rop has committed to honor Drnovsek's May 2002 
pledge to President Bush to increase Slovenian defense 
spending to 2% of GDP by 2008.  This pledge also was made 
directly to NATO in Slovenia's Timetable for Completion of 
Reforms.  However, an EU-mandated change to GDP calculation 
methodology caused Slovenia to miss its 2003 interim defense 
spending target.  The 2003 shortfall can be excused as an 
unexpected accounting change.  However, a GoS failure to 
adjust defense spending levels to the new GDP methodology in 
the 2004 and draft 2005 budgets has Slovenia likely to miss 
its 2004 and 2005 targets as well.  We are concerned that 
continued shortfalls will make it extremely difficult for 
Slovenia to honor its promise to NATO and to President Bush. 
We are also concerned that the combination of 
professionalization costs and lower spending levels could 
affect Slovenia's ability to meet its force goals. 
 
------- 
OIF/OEF 
------- 
 
4.  (SBU) Slovenia was voiciferously not a part of the Iraq 
Coalition due to profound public opposition to the war, but 
granted humanitarian overflights and sent a liaison officer 
to CENTCOM.  Once fighting subsided, the GoS offered 
humanitarian assistance to children through UNICEF and the 
Human Security Network, and demining assistance through its 
International Trust Fund.  Under the political cover provided 
by UNSCR 1483, the GoS approved broad overflights/transit on 
11 June.  At the Madrid conference, Slovenia donated an 
additional US$440,000 in police training and other 
reconstruction assistance.  Many Slovenian companies who 
worked in Iraq in the Yugoslav era hope to recoup old debts 
and to win reconstruction contracts.  Following passage of 
UNSCR 1511, we have been encouraging the GoS to offer 
 
additional support for security and stability in Iraq. 
 
5.  (SBU) The GoS originally committed to deploy a 17-person 
special forces unit to ISAF IV in Afghanistan. 
Unfortunately, this was delayed because a civil service 
employees union's legal challenge to standard security 
questionnaires caused the Constitutional Court to freeze all 
NATO security clearance processing.  The GoS proactively 
resolved this problem by amending the law on classified 
information to address the union's court complaint and the 
unit had been scheduled to begin deployment on 09 February. 
However, the GoS is now delaying deployment until March, in 
response to an explicit request from Kabul.  We continue to 
encourage the Government to consider additional OEF 
contributions. 
 
------------------ 
Regional Stability 
------------------ 
 
6.  (SBU) For most of the past decade, NATO and EU membership 
have been Slovenia's priority foreign policy goals.  Once 
membership in both organizations was assured, the political 
elites searched for their new purpose.  There appears to be a 
growing consensus that the new priority is to help guide the 
rest of Southeast Europe along that same path, as quickly as 
possible.  This reflects both political and economic national 
interest -- Southeast Europe is Slovenia's 
second-most-important market, supplementing EU-generated 
income and balancing Slovenia's dependence on the health of 
the western European economy.  Slovenia therefore has the 
potential to be one of our most capable, motivated, and 
reliable allies in bringing peace, stability, and prosperity 
to the troubled Balkans region. 
 
7.  (SBU) The GoS strongly supports eventual NATO and EU 
membership for Croatia and the other former Yugoslav 
republics and seeks to be NATO and the EU's in-house Balkans 
expert. Slovenia is the region's largest foreign investor, 
and plays a leading role in Balkan demining efforts, 
humanitarian assistance, and peacekeeping operations. 
Slovenia also promotes regional law enforcement cooperation 
on combating cross-border criminal activities and provides a 
wealth of technical assistance on economic, political, and 
judicial reforms. 
 
8.  (SBU) Slovenia joined the OSCE Troika on 01 January and 
will be Chairman in Office for 2005.  In this role, the GoS 
plans to focus on promoting political and economic reforms in 
Southeast Europe, the Causasus, and Central Asia, building on 
Slovenia's own successful transition experience. 
 
----------------------------------- 
Military Reform/Professionalization 
----------------------------------- 
 
9.  (SBU) Slovenia will bring valued assets to the Alliance, 
by exporting peace and stability in this troubled region, by 
achieving its force proposals/goals, and by further 
developing its declared niche capabilities (mountain 
training, explosive ordinance disposal, military police and 
peacekeeping units, and military field medicine).  Under 
Defense Minister Grizold's capable leadership, Slovenian 
military reforms are proceeding well, but full implementation 
will require continued and determined effort and increasing 
defense resources.  Key MAP goals are:  operationalizing the 
10th Motorized Battallion, developing an NBC battalion, 
logistics support for deployable forces, NCO corps 
development, and personnel management reform.  The GoS will 
fully professionalize its active duty military by the end of 
2004 and the reserves by 2010. 
 
10.  (SBU) In a 23 March 2003 referendum, 66% of the 
Slovenian electorate voted to join NATO after an intense GoS 
public information campaign.  However, it is not clear 
whether the Government has a long term strategy to maintain 
this level of public support.  Professionalization of the 
military and the recent end to conscription have enjoyed wide 
popularity. 
 
------------ 
Other Issues 
 
------------ 
 
11.  (SBU) Croatia:  Slovenia's relations with Croatia 
resemble those of siblings -- basically good, with many minor 
irritants.  Last August, Croatia unilaterally declared its 
intention to establish an Exclusive Economic Zone (EEZ) off 
its Adriatic Coast, which would directly affect Slovenian 
fishing and shipping.  The surprise decision resulted in a 
flurry of stiffly worded diplomatic notes, the Slovenian 
Ambassador to Croatia returning briefly to Ljubljana for 
"consultations," and the reappearance of resentments over 
Croatia's failure to sign and ratify the bilateral maritime 
border demarcation agreement.  Slovenia has been pursuing 
resolution of the matter calmly, via EU and bilateral 
diplomatic channels.  Both the GoS and the GoC appear 
interested in taking the opportunity provided by the Croatian 
change in leadership to approach these issues from a fresh 
perspective.  We are studiously avoiding being drawn into the 
discussions or commenting publicly on the issue. 
 
12.  (SBU) ICC/Article 98 Agreements:  A founding ICC member, 
Slovenia believes strongly in the Court and would like to 
bring the U.S. onboard.  The GoS understands the practical 
need to resolve the Art. 98 issue, but is unlikely to sign an 
agreement unless a prominent EU member does so first.  With 
the majority of the electorate forcefully opposed to Art. 98 
Agreements, ratification would be extremely difficult, 
particularly as the 2004 elections draw closer.  The recent 
Presidential ASPA waiver decision received moderate but 
positive press coverage. 
 
13.  (SBU) Terrorism:  One of the first countries to join the 
Global Coalition against Terrorism, Slovenia has supported it 
through humanitarian, demining, military, and police training 
assistance to Afghanistan.  Slovenia has ratified 11 of 12 
anti-terrorism conventions, with ratification of the last 
awaiting passage of technical amendments to the Criminal Code 
which are currently before parliament.  Slovenia has an 
excellent international reputation in combating terrorist 
financing and money laundering, is highly supportive of U.S. 
efforts in this regard, and is actively mentoring Ukraine, 
Russia, and the former Yugoslav republics. 
 
14.  (SBU) EU:  For the average Slovene, national economic 
interests take priority over all other policy issues, and 
those interests lie in Europe.  Slovenia's top four trading 
partners are Germany, Italy, Croatia, and France.  Total 
trade with the EU is estimated at nearly US$6.1 billion, or 
59% of all exports.  (Only 3% of exports go to the U.S.)  EU 
membership was supported by 91% of the electorate in the 23 
March referendum and enjoys the backing of virtually every 
political party.  Janez Potocnik, the Minister for European 
Affairs, the lead EU negotiator, and the nominee to be 
Slovenia's first Commissioner, is one of the most popular and 
widely-trusted politicians in the country.  Prior to the 
Copenhagen Summit, Slovenia sensibly toed the EU policy line 
on almost all issues of importance, voicing dissent only in 
cases where there were clear differences of opinion within 
the EU and where there was safety in numbers (Bilateral 
Investment Treaties, for example).  Fiercely independent by 
nature, we expect the Slovenes to gradually 
become less reluctant to push opposing points of view as 
their participation in EU decision-making processes expands. 
While generally supportive of ESDP, Slovenia opposes any 
duplication of NATO structures. 
 
15.  (SBU) Export Controls:  The GoS continues to address 
dual use export control licensing weaknesses and is 
conducting industry outreach and training, with USG support. 
However, it is not clear whether the new interministerial 
body tasked with overseeing dual use export policy is 
achieving all the practical results its well-intentioned 
chair, SOVA Director Iztok Podbregar, would like to see. 
 
16.  (SBU) Privatization/FDI:  The GoS has been reluctant to 
privatize a number of key industries including 
telecommunications, insurance, and banking.  The state exerts 
significant influence over these sectors either as a direct 
owner or as a majority shareholder through a combination of 
state-owned funds.  Although its figures improved 
substantially last year as a result of Swiss-owned Novartis' 
acquisition of Lek Pharmaceuticals for nearly US$900 million, 
 
Slovenia's cumulative FDI, at nearly US$3.2 billion, is one 
of the lowest of all acceding countries. 
 
17.  (SBU) Transparency/red tape:  Transparency International 
ranked Slovenia 29th in its 2003 corruption perception index. 
  Generally, the executive, legislative, and judicial 
branches follow budget law procedures and the system is 
fairly efficient and transparent.  However, there is a lack 
of consistency in public tenders and in the privatization 
process.  In some cases tenders have been cancelled or 
privatization commissions have rejected all bids without 
providing clear explanations.  Byzantine permitting processes 
complicate business start-up/expansion and offer multiple 
opportunities for interference by state monopolies and other 
competitors.  Overall, Slovenia enjoys a high level of fiscal 
transparency and accountability. 
 
18.  (SBU) Trafficking in Persons:  A Tier II country, 
Slovenia needs to pass a law specifically criminalizing 
trafficking, establish victim/witness protection, improve 
victims' assistance (including setting up sufficient 
shelters), and collect better statistics on the problem. 
 
------------------ 
General Background 
------------------ 
 
19.  (SBU) Slovenia has a well-functioning multi-party 
democracy, an independent judiciary, a free press, an 
excellent human rights record and solid civilian control of 
the military.  The country has an impressive record of 
sustained, broad-based economic growth and its citizens enjoy 
a relatively high standard of living (per capita GDP is 
around US$10,000).  We share strong, cooperative relations on 
a broad range of issues and have worked together closely to 
promote stability and political and economic reform in the 
Balkans.  However, there has been overwhelming public 
opposition to U.S. policy on Iraq and the ICC.  Slovenia has 
contributed personnel to IFOR, SFOR, KFOR and various UN 
missions in the Balkans and elsewhere, and provided crucial 
overflight clearances for NATO's Kosovo campaign.  As a UN 
Security Council member in 1998-9, Slovenia supported U.S. 
positions on tough issues, such as Iraq sanctions. 
 
20.  (SBU) President Bush met with then-PM Drnovsek in 
Washington on May 17, 2002 and in Ljubljana during his June 
2001 summit with Russian President Putin.  President Clinton 
visited Ljubljana in June 1999.  National Assembly President 
Borut Pahor's 09-11 June trip to Washington was the first 
time he had traveled outside of Europe.  SecDef Rumsfeld 
visited Slovenia immediately after the November 2002 Prague 
NATO Summit; in early December, Congressman Bereuter came 
here in his capacity as Chair of the NATO Parliamentary 
Assembly; and, two bilateral Congressional delegations (Holt 
and Hastert) have traveled to Ljubljana in the past year.  PM 
Rop wishes to visit Washington as soon as possible. 
 
21.  (SBU) On December 23, 1990 an overwhelming majority of 
the Slovenian electorate voted in a plebiscite to separate 
from greater Yugoslavia; independence was officially declared 
on June 25, 1991.  The U.S. formally recognized Slovenia as 
an independent state on April 7, 1992 and opened an embassy 
in Ljubljana in August of that year.  Slovenia became a 
member of the UN in May 1992 and of the Council of Europe in 
May 1993.  Slovenia is scheduled to join the EU and NATO in 
May and June 2004, respectively, and will assume the OSCE 
Chairmanship in Office in 2005.  Slovenia is a member of all 
major financial institutions, as well as 40 other 
international organizations including the World Trade 
Organization. 
 
 
YOUNG 
 
 
NNNN