US embassy cable - 04BRUSSELS4352

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 004352 
 
SIPDIS 
 
E.O. 12958: DECL: 10/08/2014 
TAGS: PREL, EAID, ZL, EUN, USEU BRUSSELS 
SUBJECT: EU-US BALKANS TROIKA: GROWING IMPATIENCE ON ICTY 
COMPLIANCE, LOOKING AHEAD ON KOSOVO 
 
REF: A. USEU BRUSSELS 4265 
 
     B. SKOPJE 1684 
     C. TIRANA 1625 
     D. USEU BRUSSELS 4317 
 
Classified By: RICK HOLTZAPPLE, POLOFF, REASONS 1.4 (B/D) 
 
SUMMARY 
------- 
 
1. (C) On September 30, EUR/SCE Director Chuck English and 
EUR/ACE Deputy Director Pat Nelson-Douvelis met with the EU 
Troika (Dutch and Luxembourg Presidencies, Commission, 
Council Secretariat) to discuss Balkan affairs.  The EU 
stressed the "twin track" approach for Serbia and Montenegro 
implied no weakening of ICTY conditionality.  On Kosovo, the 
Commission is looking for money to help with post-riot 
reconstruction, but have not responded to the Eide report's 
recommendation for an economic development strategy.  High 
Rep Solana's Balkans advisors see tough times ahead on 
getting to status discussions.  The EU is toughening its 
message on ICTY compliance with all the relevant countries, 
but remains somewhat nervous about potential variance between 
US and EU approaches.  Policy coordination between the US and 
EU on Macedonia and Albania is excellent.  END SUMMARY. 
 
Serbia and Montenegro: How the "Twin Track" Will Work 
--------------------------------------------- -------- 
 
2. (C) Genoveva Ruiz Calavera, Deputy Head of the 
Commission's Serbia and Montenegro Unit, described the EU's 
new "twin track" approach in the same terms as reported Ref 
A.  She added that the Commission still believes it would 
have been better if SAM had been able to complete internal 
market harmonization, but the process had become caught in 
"endless disputes."  The key now was to ensure that any 
Stabilization and Association Agreement is negotiated in a 
way that "would preserve the essentials of the State Union" 
such as its responsibility for foreign and defense policy, 
including political dialogue with the EU, and implementation 
of ICTY obligations.  Ruiz Calavera also underlined that the 
EU expects that Montenegro must also continue to "bear the 
burden" of compliance with ICTY as well as Serbia.  In 
particular, the EU would be pressuring Montenegro to rejoin 
the State Commission for ICTY cooperation.  Ruiz Calavera 
also asked for US assistance "to calm down" the Montenegrins, 
who had overreacted to the EU's shift; "we told them not to 
think of applying this approach at the WTO or UN; and the 
next day they went to talk to the WTO." 
 
3. (C) English noted that we had also seen the Montenegrins 
misinterpreting the EU's new policy as an encouragement to 
the government's aspirations for independence.  He also noted 
U.S. appreciation of and support for the EU's continued 
insistence on ICTY cooperation as a precondition for progress 
in the SAA process. 
 
4. (SBU) In a meeting on Oct 1 with EUR/ACE's 
Nelson-Douvelis, Commission SAM Unit Head Therese Sobieski 
explained that the "twin track" approach would not apply to 
the EU's CARDS program assistance to SAM, despite Montenegrin 
appeals.  The CARDS program in SAM is budgeted at around 190m 
euros annually in 2005 and 2006, but the Commission has not 
yet wrestled with the question of what it will do with 
programs in municipalities that end up with Radical party 
governments after the recent elections.  Hungary was putting 
lots of pressure on the Commission to take a tough line. 
Sobieski also said the Commission was looking at resuming 
macro-financial assistance to Belgrade, but that the GoSAM 
had not yet met the necessary IMF conditions. 
 
KOSOVO 
------ 
 
5. (SBU) In a very brief discussion on Kosovo, both sides 
agreed that the next several months were critical, leading up 
to the standards review in 2005.  Ruiz Calavera said the 
Commission is currently looking for additional funds for 
Kosovo this year.  If such funds could be identified, the EU 
would use them to support reconstruction efforts for cultural 
and religious sites damaged in the March rioting, 
supplementing the PISG's efforts to rebuild housing.  English 
said such a move by the EU would be very welcome. 
 
6. (SBU) In her October 1 meeting, Sobieski indicated the EU 
had not yet responded explicitly to the recommendation in the 
recent Eide report calling for a comprehensive economic 
development strategy.  A major difficulty was that most 
economic competencies in Kosovo were among the powers already 
transferred from UNMIK to the PISG, but the Kosovar Ministry 
of Economy had been totally ineffective.  Sobieski also noted 
that Pillar IV of UNMIK had recently issued a new report (a 
copy was provided to EUR/ACE) on promoting economic 
development. 
 
7. (C) In a subsequent meeting, High Rep Solana's Balkan 
advisor Stefan Lehne noted the difficulties of getting a good 
result from the upcoming Kosovo elections.  Lehne said that 
some of his Serbian contacts (Samardizic and Ratkovic) had 
hinted that Kostunica's initial negative response might not 
be the last word.  But even more fundamental is the need to 
move from the standards process to the status issue; and 
Lehne thought it was "almost impossible" to see how Belgrade 
could go along with this transition in a constructive way. 
When English raised the decentralization project as a way of 
assuaging Serb concerns, Lehne commented that this would be 
hard for the Kosovar Albanians to give away before status, 
and that in any case, he thought security issues were more 
important to the Serbs than legal ones.  English responded 
that decentralization was a critical part of the most 
important issue: majority-minority relations. 
 
ICTY COOPERATION LACKING EVERYWHERE 
----------------------------------- 
 
8. (C) The EU shared the U.S. assessment that ICTY compliance 
remains a widespread problem in the region.  Jan Lucas van 
Hoorn and Tony Agotha of the Dutch Presidency said that ICTY 
Prosecutor Carla Del Ponte had recently told the EU she had 
clear indications that fugitive indictee Ante Gotovina was in 
Croatia this summer.  In late September, Commission President 
Romano Prodi called Croatian PM Sanader to complain about 
poor Croatian performance, and the next day the GoC produced 
a "hastily assembled" report on ICTY compliance, and 
organized a couple of ineffectual raids on the houses of 
suspected Gotovina supporters.  Del Ponte has been invited to 
the October 11 EU FMs' meeting (GAERC), to provide a tough 
message on Serbia and send "a shot across the bow of 
Croatia." 
 
9. (C) In Bosnia-Herzegovina, the Republika Srpska remained 
the key roadblock on better ICTY cooperation.  If, as 
anticipated, the GoBH had met all the other conditions of the 
EU's feasibility study, the EU would be confronted with 
whether it would have to postpone SAA negotiations with the 
whole country because of the behavior of the RS.  English 
noted that the U.S. continued to support High Representative 
Ashdown's efforts to prompt greater cooperation with ICTY, 
and that Ashdown would continue to get support if he decided 
to take further punitive measures.  The Dutch Presidency's 
Agotha reported the EU was getting close to final approval of 
an asset freeze against fugitive ICTY indictees (details REF 
D), although for legal reasons it could not be applied 
against support networks. 
 
10. (C) In his separate meeting, Stefan Lehne told English 
and Nelson-Douvelis that the EU remains concerned about a 
"disjuncture" between the messages being sent to the Serbs by 
ICTY ("give us everything") and the U.S. ("only Mladic 
matters").  Lehne said he always thought the Croatian model 
provided a better approach.  English said that would depend 
entirely on what one thought the "Croatian model" was.  If it 
was improve your cooperation with ICTY, and then look for 
some flexibility, then OK; but if it was cooperate on the 
little things, but refuse to deliver the big fish, then we 
could not accept it.  Lehne did not respond directly, but 
said Solana remained frustrated that ICTY conditionality was 
blocking Serbia's progress toward an SAA with the EU and PfP 
with NATO.  And without Serbia on a positive track toward 
Europe, then the Kosovo status problem was much more 
difficult. 
 
BOSNIA-HERZEGOVINA 
------------------ 
 
11. (C) John Dunne, of the Commission's Bosnia unit, reported 
that the GoBH was making progress on meeting the EU's 
conditions for starting of SAA negotiations, although 
Commissioner Patten was insisting on the need for more 
implementation of laws passed.  Helene Holm-Pederson of the 
Council Secretariat commented that the EU-Bosnia ministerial 
troika during the UNGA had demonstrated yet again FM Ivanic's 
eloquent optimism and his lack of substance.  Ivanic's one 
substantive point had been to repeat his call for a 
re-examination of the OHR mandate prior to elections in 2006. 
 
 
12. (SBU) Holm-Pedersen also noted that neither the HDZ nor 
SDA had been helpful during parliamentary debate on 
legislation for a War Crimes Chamber in Bosnia.  She observed 
that the fact that "feelings are running high" on the issue 
might be a "good sign it will have some bite."  English 
responded that the U.S. sees the War Crimes Chamber as an 
important part of ICTY's completion strategy, and we remained 
disappointed at the EU's meager contribution.  Dunne said the 
Commission had funded 1.5 million euro, and would "keep under 
review" the possibility of further funding, but made no 
promises. 
 
13. (C) Lehne, in his meeting, said that the OHR transition 
remained a "touchy question", particularly what should be 
done with OHR's "Bonn Powers."  But there seemed to be a 
growing appetite for moving ahead with a change, perhaps by 
"parking" the Bonn Powers with the PIC.  Lehne cautioned, 
however, that he was concerned about ideas floating that the 
EU could somehow take over full responsibility on behalf of 
the international community in Bosnia, or even in Kosovo. 
"The EU is ready to engage more," he said, "but we can't do 
too much too quickly." 
 
MACEDONIA 
--------- 
 
14. (C) Ambassador Jean Louis Wolzfeld, representing the 
upcoming Luxembourg Presidency, said the November 7 
referendum on the decentralization was a discouraging 
development, whatever the result.  In the best of 
circumstances it has slowed implementation of the law, and it 
will likely undermine the confidence of ethnic Albanians in 
the Ohrid Framework Agreement.  Nonetheless, the EU would 
continue to speak out in favor of the decentralization law as 
a necessary element of the Framework Agreement, which is, in 
turn, a necessary step on Macedonia's path toward the EU. 
Wolzfeld also recalled that the European Commission was due 
to issue its opinion ("avis") on Macedonia's EU membership 
application by mid-2005. 
 
15. (C) Lehne, for his part, saw the US and EU messages to 
Macedonia (REF B) as well coordinated.  He argued the EU 
line, as elaborated by Wolzfeld, was "clear to anyone who can 
read."  There was no need for the EU or US to suggest a 
boycott strategy.  He predicted the GoM would probably appeal 
for voters to abstain, and at that point the EU and US could 
make supportive statements.  (The Dutch Presidency had 
earlier half-jokingly suggested the campaign slogan, "If you 
want to travel (i.e., get a looser EU visa regime), then stay 
home.") 
 
ALBANIA 
------- 
 
16. (C) The Dutch Presidency expressed its appreciation for 
U.S. support in its recent demarche to Albania on the need 
for accelerated reforms (REF C).  But the EU was concerned by 
PM Nano's reaction.  It appears Nano has not gotten the 
message about how serious the problems are.  (NOTE: At a 
Sept. 30 dinner for English and Nelson-Douvelis, Albanian 
Ambassador to the EU Artur Kuko (protect) said he shared the 
EU's concern that the PM did not understand the seriousness 
of the situation. END NOTE.)  Nano's response has been to 
cite the GoA's responsible behavior on Kosovo and the 
"Greater Albania" question, and assume that trumps 
everything.  The European Commission, meanwhile, has 
cancelled, for technical reasons, the next round of SAA 
negotiations planned for early October. 
 
SCHNABEL