US embassy cable - 04ZAGREB2153

UNCLAS ZAGREB 002153 
 
SIPDIS 
 
 
SENSITIVE 
 
DEPT FOR EUR/SCE - KABUMOTO, BENEDICT 
 
E.O. 12958: N/A 
TAGS: PREL, PGOV, RS, HR 
SUBJECT: FM VISIT BOOSTS RUSSIA-CROATIA RELATIONS 
 
1. (SBU) SUMMARY AND COMMENT: In an effort to shore up 
Moscow's influence in this Brussels-leaning capital, Russian 
FM Sergei Lavrov met with President Stjepan Mesic, PM Ivo 
Sanader, Speaker of Parliament Vladimir Seks, and FM Miomir 
Zuzul on his December 10 visit to Zagreb.  Significant 
developments included agreement on the settlement of 
Soviet-era debt to Yugoslavia, discussions of promoting 
Russian investment in Croatia's energy and tourism sectors, 
groundwork for future anti-terror and anti-drug trafficking 
agreements, and interest in selling hardware to the Croatian 
military during its modernization to NATO standards.  The two 
FMs agreed on a plan of consultation, but an expected visit 
by Russian President Vladimir Putin has not yet been 
scheduled.  The GOC got what it wanted in Soviet debt 
repayment; the rest of the visit was primarily a scouting 
trip for Russian investment opportunities.  END SUMMARY AND 
COMMENT. 
 
PLANES, TURBINES, AND PIPELINES 
------------------------------- 
2. (SBU) Lavrov's visit represented a potential warming of 
bilateral relations and, the GoC hopes, increased Russian 
interest in economic opportunities in Croatia, according to 
Vesna Klaic, MFA's director of bilateral relations with 
Eurasian countries.  The last Russian FM to visit Croatia was 
Jevgeny Primakov in 1998, when Croatia's situation, both 
politically and economically, was far different.  Lavrov 
expressed complete Russian support for Croatia's EU 
candidacy. 
 
3. (SBU) Agreement on in-kind payments in the form of 
fire-fighting aircraft, power plant turbines, and gas 
pipelines to settle the full value of the $185.7 million due 
Croatia from Soviet-era debt represented a particular 
achievement for the GoC.  According to Klaic, standard 
Russian practice in other countries of the former Yugoslavia 
has been to negotiate a 25 percent reduction. 
 
RUSSIA INTERESTED IN INVESTING IN TOURISM, MILITARY SALES 
--------------------------------------------- ------------ 
4. (U) Lavrov was particularly interested in advancing 
economic relations, and the GoC intends to pursue his offer 
to initiate a joint campaign to promote Russian investment in 
Croatia, particularly in the energy and tourism sectors. 
Discussions focused on the Druzba-Adria pipeline, a 
controversial project to carry oil from Russia to the port of 
Omisalj on the northern Croatian island of Krk.  Moscow is 
extremely interested in this project, according to Lavrov, 
but respects Croatia's ongoing environmental review process 
and consideration of potential damage to Croatian tourism. 
Research is now complete for an environmental impact report, 
but the GoC is still assessing the information and has not 
yet released any findings. 
 
5. (U) Just days after Lavrov's departure, the ruling 
Croatian Democratic Union (HDZ) presidential candidate 
Jadranka Kosor declared her opposition to Druzba-Adria 
(putting her slightly beyond the GoC's official neutrality) 
and environmental protestors organized rallies in Zagreb and 
several coastal cities against the project.  President Mesic, 
on the other hand, remains open to the project and has called 
for an informed public debate, noting that oil tankers are 
already entering the Adriatic bound for Italian and Slovenian 
ports and no one is protesting against them. 
 
6. (SBU) Lavrov also came to Zagreb looking for a piece of 
the military modernization pie.  "Military and technical 
cooperation" discussions centered on Russian-made hardware 
that could serve the Croatian military's needs in upgrading 
to NATO standards. 
 
ANTI-TERROR, COUNTER-DRUG AGREEMENTS ON HORIZON 
--------------------------------------------- -- 
7. (SBU) Lavrov and Zuzul began the groundwork for future 
bilateral agreements on preventing terrorism and drug 
trafficking and responding to civil disasters.  MFA consular 
experts will go to Moscow in January to pursue to pursue 
accelerated visa procedures.  According to Klaic, Russian 
police checks are slowing down visas for Croatian business 
travelers. 
 
8. (U) The FMs also discussed proposals for intercity 
cooperation, including a planned sister city relationship 
between Kaliningrad and Rijeka.  According to Lavrov, the GoR 
will establish Russian cultural center in Croatia and a Forum 
for Slavic Culture that will link all Slavic peoples. 
FRANK 
 
 
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