US embassy cable - 05LJUBLJANA509

C O N F I D E N T I A L  LJUBLJANA 000509 
 
SIPDIS 
 
 
DEPT FOR EUR/NCE 
 
E.O. 12958: DECL: 07/18/2015 
TAGS: PREL, PGOV, ECON, SI 
SUBJECT: LUNCH WITH SLOVENE PRESIDENT JANEZ DRNOVSEK: 
JANSA'S MISTAKES AND STRUGGLE WITH HIS COALITION 
 
 
Classified By: COM Thomas B. Robertson for Reasons 1.4 (b) and (d) 
 
1.  (SBU) Summary:   At Lunch with COM July 18, President 
Drnovsek focused largely on domestic issues including the 
Government of Prime Minister Janez Jansa and what seems to be 
the biggest obstacle (his coalition partners) to needed 
economic reform and potential foreign investment; the current 
disarray within the leading opposition party, Liberal 
Democracy (LDS); the expected referendum on RTV Slovenija; 
the painful path to WWII reconciliation; and the potential 
fallout from proposed legislation that would abolish the 
Corruption Prevention Commission.  He was also very much 
looking forward to his upcoming vacation in the Carinthian 
Alps (Austria).  Drnovsek seemed to think his foreign affairs 
advisor and former Foreign Minister Ivo Vajgl would be a good 
candidate to lead his former party, the LDS, back to its 
rightful place on the political scene, and Vajgl did not 
appear averse to moving in that direction if the political 
support is there.  End Summary. 
 
2.(SBU) President Janez Drnovsek hosted COM at Vila Podroznik 
for lunch, July 18, 2005.  Drnovsek was accompanied by 
foreign affairs advisor and former Foreign Minister, Ivo 
Vajgl, and his chief of staff Valentina Hajdinak.  COM was 
accompanied by PolEcon Chief.  Drnovsek welcomed the 
Ambassador at the ceremonial residence of Vila Podroznik, 
next door to the EMR.  Drnovsek was his usual low-key self, 
and he seemed in a good mood as he opened the lunch with a 
joke about the Montenegrins, showing the years as part of 
Yugoslavia are still integral to his world view today. 
 
 
------------------- 
Jansa's Performance 
------------------- 
3. (C)  Drnovsek meets weekly with the prime minister and 
says one of Jansa's greatest obstacles to reform is his own 
coalition.  Specifically, the Slovene People's Party (SLS) 
disagrees with many SDS policies including privatization, 
relations with Croatia, and foreign direct investment. 
Drnovsek is very familiar with the challenges facing Jansa on 
this score as he, too, headed a government coalition with SLS 
as a partner.  Having the pensioner's party as another 
coalition member does not promote the case for 
"revolutionary" change either. Drnovsek said he knew how hard 
Jansa was working and suggested he might be tying to do too 
much himself.  This was in part a reflection of the 
weaknesses in his coalition especially on the economic front. 
 
4. (C) COM asked Drnovsek what he thought about the current 
legislation working its way through parliament that would 
abolish the Corruption Prevention Commission (CPC).  Drnovsek 
agreed that the CPC was doing good work and he said he was 
surprised that Jansa was cooperating with the right-wing 
Slovene National Party (SNS) in proposing the CPC's 
abolishment.  Drnovsek said that when originally created, the 
CPC was meant to be an independent office, but within the 
Ministry of Interior.  Now that it had been made an entirely 
independent agency, it would be very difficult to put it back 
under government or parliamentary (as is being suggested) 
control.  Aware of Jansa's problems with CPC Director Kos 
personally, Drnovsek suggested, it might be more effective to 
try to get rid of Kos.  That approach is filled with a 
different set of legal obstacles as well. 
 
------------------------------------- 
Referendum: a Losing Prospect for All 
------------------------------------- 
5. (C)  As Drnovsek described it, Jansa is making mistakes 
one might expect from a new government, but that he had hoped 
would be avoided.  He worries that the new GOS has decided 
that with its new-found power, it will do what the LDS did 
well for so long - propose legislation, institute structural 
changes and not bother to consult the opposition.  As an 
example, he remarked that the RTV legislation recently 
debated in Parliament and which will now be the subject of a 
referendum, could have been easily negotiated with the 
opposition.  The referendum, Drnovsek said, is regrettable 
and will only deepen the discord between the parties and make 
bipartisan cooperation even more difficult in the future.  In 
his time as prime minister, Drnovsek said he had always made 
a point of listening to the opposition and accepting some of 
its proposals, however, Jansa seems to be making a point of 
rejecting all overtures of the opposition.  Vajgl, reminding 
us he had once been a journalist for RTL, suggested the LDS 
did not have a history of influencing the press, which 
 
 
Drnovsek quickly contradicted, noting how involved Kucan had 
been in manipulating the press. He added, since he (Drnovsek) 
had often been the target of sharp press criticism, how 
envious he was of Kucan's Teflon image with the press 
 
-------------------- 
Managing the Economy 
-------------------- 
6. (C)  On the economic front, Drnovsek commented that he had 
seen no evidence of progress from the Government on reform. 
He noted that Jansa's talent pool was very shallow, and that 
he was not impressed by the abilities or performances of 
either the Minister of Economy or Finance.  Having counseled 
Jansa to move in the first part of his mandate to do the 
difficult job of privatization, Drnovsek remarked it would be 
a tough sell.  His own experience partially privatizing 
leading bank Nova Ljubljanska Banka was a very rocky time. 
Drnovsek claimed that LDS and SDS really were not far apart 
on the privatization issue, but under former PM Rop's 
leadership, LDS had really lost its liberal (in the European, 
economic sense) ways.  Drnovsek thinks the state can divest 
itself of its position in the banks in other ways, including 
through the pension and restitution funds it manages.  Beyond 
that, and betraying his "go slow" inclination, Drnovsek 
thought privatization needed to be done on a case-by-case 
basis. 
 
7. (C)  Lamenting that Slovenes are very conservative on 
foreign investment and worried about loss of Slovene national 
interest, Drnovsek complained that there seemed to be no-one 
willing to speak out publicly and in favor of the benefits of 
foreign direct investment.  He said he was willing to do so, 
but politically, it is considered a no-win position. 
Drnovsek confirmed that he considers Scandinavia (i.e. 
Finland) the best suited model for Slovenia to follow 
economically - an innovative economy with a strong social 
safety net.  He was not enthusiastic about the flat-tax idea 
that has been floated by the GOS, saying it is unlikely to 
gain much support and there are other ways to improve the 
system that would be effective and more palatable to the 
Slovene public. 
 
---------------------- 
New Leadership for LDS 
---------------------- 
8. (C)  When COM asked Drnovsek what he thought about the 
current state of affairs within the LDS, he suggested maybe 
the solution was sitting at the table - Ivo Vajgl, as 
candidate for the LDS presidency.  Vajgl, clearly flattered, 
didn't brush it off.  He said he was, indeed, talking to 
people but he hadn't been asked to run for the Presidency of 
the LDS.  Drnovsek clearly supports this idea, and had a good 
laugh over it saying sotto voce to the Ambassador that he 
didn't envy Vajgl.  As to who might "ask" Vajgl to run, both 
agreed strongly that it would not, and should not be Rop. 
That link would surely undermine Vajgl's chances.   Should 
Vajgl choose to run for the leadership spot in LDS, it was 
not clear in this conversation if he would immediately resign 
from the President's staff. 
 
9. (C) Both Vajgl and Drnovsek agreed that Rop had done great 
disservice to the LDS by moving it away from it's traditional 
center position and adopting strongly left-leaning policies. 
Drnovsek seems to believe that with the right leadership, LDS 
can regain the center and that a grand coalition with the SDS 
would be possible - and results would be much better than 
with the current coalition.  Vajgl said that in fact, at the 
time of last year's elections, at least half of LDS was 
willing to seriously consider going into government with SDS 
- something Jansa had publicly been willing to explore. 
 
 
--------------------------------------------- --- 
Reconciliation - Still Sensitive 60 Years Later 
--------------------------------------------- --- 
 
10. (C)  The Ambassador thanked Drnovsek for the very 
thoughtful letter he had written to President Bush after the 
Moscow WWII commemoration events.  He noted that since their 
last meeting, both the President and PM Jansa had made strong 
speeches about the need for reconciliation between the 
supporters of the opposing factions during the war in 
Slovenia - Domobranci (seen as collaborators) and Partisans 
(reviled as Communists).  Drnovsek said it was important to 
continue the process of reconciliation in Slovenia and that 
Jansa and he had begun a very public push in two speeches 
 
 
early this summer.  Nonetheless, prejudices, which by now are 
one or two generations removed from the events, die hard. 
Drnovsek noted that Justin Stanovnik, brother of Partisan 
leader Janez Stanovnik and himself a former Domobranec, had 
been critical of Drnovsek's remarks since he had only blamed 
the "revolutionary leadership" for the excesses against the 
domobranci and not all partisans and communists. 
 
------- 
Comment 
------- 
 
11.  (C) Drnovsek, clearly looking forward to his vacation 
when he could "clear his head of politics" was warm and 
congenial in this meeting.  Though Drnovsek often comes 
across as passive and very quiet -- he is almost painfully 
deliberate in his answers -- he was engaged in our 
discussions.  what was striking in this meeting was his 
assessment that Jansa is missing important opportunities to 
make reforms and that he has made mistakes by not being 
willing to work with the opposition.  With former PM and LDS 
president Rop on the ropes, Drnovsek clearly sees an 
opportunity for his former party to revive and return to its 
liberal economic roots -- perhaps under Ivo Vajgl's 
leadership.  More intriguing is the idea that LDS at some 
point in the not-too-distant future might be a more 
productive coalition partner for SDS that the team Jansa has 
now. 
ROBERTSON 
 
 
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 2005LJUBLJ00509 - Classification: CONFIDENTIAL 


 
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