US embassy cable - 04BRUSSELS2944

C O N F I D E N T I A L BRUSSELS 002944 
 
SIPDIS 
 
E.O. 12958: DECL: 07/09/2014 
TAGS: PREL, EAID, ETRD, ZL, EUN, USEU BRUSSELS 
SUBJECT: EU CONSTRAINED ON NEXT STEPS WITH SERBIA 
 
 
Classified By: Rick Holtzapple, PolOff, Reasons 1.4 B/D 
 
ICTY COOPERATION 
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1. (C) PolOff spoke on July 8 with Stefan Lehne, Solana's key 
advisor on the Balkans, almost immediately after Lehne's 
return from Belgrade, where he had attended the Contact Group 
session with U/S Grossman.  Lehne said that in his separate 
meetings with Serb officials the GoS was focused on the 
Mladic issue, a priority that tracked closely with the 
message delivered by U/S Grossman in the Contact Group 
meeting.  Lehne noted that he "worried a bit" about the focus 
on Mladic, because of the risk that it might turn out that 
"the guy is not there."  He drew a distinction with the EU's 
approach on the ICTY cooperation issue, which has been to (as 
in the Croatia case) to say that the necessary condition is 
to satisfy ICTY.  From the EU perspective, "the issue is what 
Del Ponte and Meron say."  The same principle would apply to 
the possibility of transferring cases for domestic 
prosecution.  The EU would not get involved in negotiations 
with Belgrade on this; and if ICTY agrees to the strategy, 
the EU would go along. 
 
LIMITED EU CARROTS 
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2. (C) But Lehne acknowledged it is an open question what the 
EU could do even if the Serbs attained a clean bill of health 
from Del Ponte.  The Commission's feasibility study for a 
Stability and Association Agreement (SAA) is being held up on 
three conditions: ICTY cooperation; effective implementation 
of the Internal Market Action Plan, especially regarding 
tariffs; and a functioning state Union.  The third criteria 
was flexible and somewhat subjective, but even if Belgrade 
satisfied ICTY, the Commission would still face the hurdle of 
the tariff issue.  And that problem, Lehne said, is as stuck 
as ever, with Montenegro's Djukanovic hardening his line.  In 
Lehne's view Djukanovic, worried about failure in an 
independence referendum, was just trying to annoy Belgrade so 
much that the Serbs would tell Montenegro to leave.  This was 
a serious miscalculation, Lehne thought, as neither Kostunica 
nor Tadic appeared inclined to see Montenegro become 
independent. 
 
3. (C) This situation leaves the EU with a limited supply of 
carrots for Serbia.  There is no prospect of serious 
additional cash in the EU's CARDS assistance program, and SAA 
negotiations will remain bogged down over the dysfunctional 
Belgrade-Podgorica relationship.  Beyond supportive rhetoric 
about Serbia's European future (such as we are told to expect 
from the Conclusions of the July 12 EU FMs' meeting), there 
is not much the EU can do.  (We heard much the same 
perspective last week from the Dutch chair of the EU's 
Balkans working group.)  Two possible sweeteners may be 
available, but still need more negotiation.  One is possible 
resolution of the ongoing EU-SaM dispute about fraudulent 
sugar trade, which the Commission hopes may be solved by 
August, but on which the EU will find it hard to agree unless 
Belgrade improves its customs procedures.  Another would be 
conclusion of a textile trade agreement, but it appears this 
would take at least a couple more months. 
 
COMMENT 
------- 
 
4. (C) The EU has a long list of things it would like to 
change about Belgrade.  ICTY cooperation is a big one, and 
remains a precondition for much else.  While not all Member 
States have taken such a reactive approach, it is clear the 
EU as a body has sub-contracted out to ICTY the decision on 
what specifically Belgrade must do.