This record is a partial extract of the original cable. The full text of the original cable is not available.

131054Z Feb 06

UNCLAS SECTION 01 OF 04 BELGRADE 000210 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KDEM SR MW PNAT
SUBJECT: MONTENEGRO: AFTER THE REFERENDUM 
 
 
 Classified by POLOFF Michael Papp for reasons 1.4 (B&D) 
 
SUMMARY 
------- 
 
¶1.  (SBU) Summary:  It is increasingly likely that Montenegro 
will hold a referendum on independence in the spring of 2006. 
 Whether or not the vote is for independence, Montenegro's 
relationships with Serbia, and, potentially, with the United 
States will change significantly. Regardless of the outcome, 
our goal for a strong partnership between Serbia and 
Montenegro and a single economic space between them will 
remain unchanged.   Either outcome could raise USG resource 
planning issues vis-a-vis Montenegro, although an 
independence path would likely place greater demands on USG 
resources (including facilities and staffing) and assistance. 
 Only a small risk exists of major violence or significant 
electoral fraud.  End summary. 
 
INDEPENDENCE. NOW WHAT? 
----------------------- 
 
¶2.  (SBU) Policy considerations and practical challenges will 
face Montenegro, Serbia, and the U.S. in the period after the 
referendum, should Montenegro's voters choose independence in 
a free and fair vote held according to international 
standards.  The GoM proposal for a Union of Independent 
States (UIS) outlines many of the key questions to be 
answered regarding relations between Montenegro and Serbia 
and provides a useful roadmap, even if Serbian PM Kostunica 
is unwavering in his opposition to the Union as such.  The 
proposal encompasses seven issues: succession; freedom of 
movement; mutuality of rights and responsibilities of 
citizens; defense; diplomatic and consular cooperation; and 
continuity of associations -- the seventh, establishment of 
Union institutions, is applicable only if a Union is agreed, 
which currently seems unlikely, given Belgrade's reluctance 
to consider it. 
 
¶3.  (U) The Constitutional Charter is very clear on some 
points regarding succession in case of independence, and 
vague on others. UNSCR 1244 and final status talks for Kosovo 
would apply only to Serbia.  If Montenegro votes for 
independence, the Charter states it will "not inherit the 
right to international personality;" however, all other 
"disputable issues  shall be separately regulated between the 
successor state and the newly independent state."  The GoM in 
its proposal for a Union of Independent States proposed 
handling "all disputable issues" in a succession procedure 
just as was the case with the former SFRY.   Montenegro 
stands to benefit from an application of the SFRY procedure, 
gaining property and assets situated abroad. Consequently, 
Serbia is likely to resist that approach and will demand 
compensation for Montenegro's significant arrears owed to the 
state budget.  It should be noted that in 2001, Serbia and 
Montenegro succeeded to the signature of the SFRY to the 1983 
Convention on the Succession of States in Respect of State 
Property, Archives and State Debts ("The Vienna Convention of 
1983" - not entered into force).  While many Western states 
do not favor the Convention, its endorsement by the Badinter 
Commission with regard to the dissolution of the SFRY, and 
its central principle of equity, favor its use in the present 
case. 
 
¶4.  (SBU) The GOM has already signaled plans to establish a 
defense ministry in the event of independence.  According 
their initial thinking, they would seek reductions in 
military force levels in Montenegro to about 3300 active 
personnel.  In its Union proposal, the GoM called for a 
"military alliance" of Montenegro and Serbia.  The "alliance" 
would encompass, among other things, military cooperation in 
education, exercises, and international peacekeeping.  The 
proposal would assist in assuring stability.  Additionally, 
however, Montenegro will need to stay focused on defense 
reform, including civilian control of the military, 
affordability, and roles and tasks -- the future of the 
coastal navy will require particular deliberation, with 
Montenegro predisposed to its abolition and replacement by a 
Coast Guard.  There could be an impact on defense reform in 
Serbia as well.  At the very least, constitutional and 
institutional issues related to the establishment of a 
Serbian defense ministry and military would need to be 
addressed.  We have often leveraged Montenegro's pro-reform 
orientation within the SMAF and MoD to push the SMAF to make 
important and necessary reforms and difficult personnel 
decisions.  With Montenegro exiting the scene, we will have 
to remain vigilant to ensure a  Serbian military and MoD 
stays on the path of reform. 
 
¶5.  (SBU) Montenegro's UIS proposal calls for cooperation in 
diplomatic and consular affairs.  While clearly both states 
would have representation in key capitals and occasionally 
divergent interests, cooperation (especially in consular 
matters) would stretch limited foreign affairs budgets, and 
should be encouraged.  Belgrade would likely demand matching 
funding from Podgorica for such a plan, however. 
 
¶6.  (SBU) For the vast majority of the populace in both 
Serbia and Montenegro, guaranteeing freedom of movement of 
people (e.g., a visa-free regime), goods, services and 
capital, and ensuring mutuality of rights (except voting) is 
central.  Ideally, the border--post-independence-- should 
eventually resemble divisions between EU states, with minimal 
hindrances.  Preservation of property rights will be a 
central concern. These guarantees will advance development of 
the common economic space. Additionally, they will preserve 
intact the social relationships that add to regional 
stability, through access to education, health care, 
recreation, and the like, even while the political 
relationship is terminated. 
 
¶7.  (SBU) The GoM is expected to move quickly to seek 
membership in international organizations and to establish 
direct bilateral relationships.  UN membership will be a high 
priority for the GoM.. (Note: Montenegro is larger (in 
population or GDP or both) than approximately 30 of the UN's 
191 member states. End note.) As for relations with the U.S., 
we would recommend that the U.S. recognize an independent 
Montenegro with little delay and establish diplomatic 
relations with it, provided that a referendum was held 
according to internationally-recognized standards.   How we 
propose we handle a U.S. presence is discussed below. We 
expect the EU and other European states would also react 
fairly quickly and along the same lines. 
 
¶8.  (SBU) While the GoS opposes Montenegrin independence, we 
do not expect an aggressive reaction in the event of a 
pro-independence outcome of a democratic referendum.  In 
fact, many senior Serbian leaders (especially the Foreign 
Minister) have indicated that they would push for early 
Serbian recognition of an independent Montenegro.  Polls and 
our own anecdotal evidence strongly suggest that emotions 
about the prospect of Montenegrin independence are far less 
intense than about Kosovo. 
 
¶9.  (SBU) Following U.S. recognition and the establishment of 
diplomatic relations, Consulate Podgorica should be upgraded 
to an Embassy.  There are numerous options that should be 
considered at that point, including whether and when to 
nominate an ambassador.  While we review our options, the 
U.S. ambassador resident in Belgrade should be accredited to 
both Montenegro and Serbia (perhaps elevating the principal 
officer in Podgorica to charge d'affaires ad hoc).  We should 
argue that this interim dual accreditation would underscore 
our strong support for a strong continuing relationship 
between Montenegro and Serbia during the potentially 
difficult early days of statehood.   Dual accreditation would 
also minimize the impact on the already overstretched USG 
facilities in Podgorica.  In any case, administrative support 
should continue to flow from the embassy in Belgrade to 
Podgorica. 
 
¶10.  (SBU) Certain functions currently handled by Embassy 
Belgrade (e.g., regional assistance programs, specialized 
administrative functions) could be transformed into regional 
support programs, still based in Belgrade. Fortunately, the 
present post location in Podgorica is well suited for 
expansion to an NOB.  (The Mayor of Podgorica has told us 
that we could purchase enough property adjacent to our 
current plot to cover over 10 acres of well-situated and 
protected land.) 
 
¶11.  (SBU) An independence scenario would probably require 
additional resources, staffing, and office space early on. 
During the first years of its existence, the staffing pattern 
of an embassy in Montenegro should probably resemble the 
staffing of posts in small transition countries in the region 
(e.g., Skopje, Ljubljana), before assuming the more modest 
scale of a mission such as Luxembourg down the road. 
 
¶12.  (SBU) Montenegrins comprise about 25 percent of 
Belgrade's present NIV workload, and the substantial travel 
distance to Belgrade would probably argue for in-country visa 
issuing.   This would involve the hiring of probably one 
American officer and a few LES employees.   Office space for 
visa functions could be added through the provision of 
temporary facilities on the present consulate grounds.  We 
would have to make decisions regarding communications 
upgrades, including the possibility of handling classified 
information,.  Until facilities and staffing existed to 
support such functions, visa issuance and classified 
information handling would remain an Embassy Belgrade 
function, although such an arrangement would not be efficient 
in the longer-run. 
 
UNITY.  NOW WHAT? 
----------------- 
¶13.  (SBU) The status quo ante referendum, marked by the 
dysfunctional State Union, will no longer be acceptable if 
independence is rejected.  Although Montenegrin pro-State 
Union officials have assured us that the current institutions 
would function normally if they were in power in Montenegro, 
we believe the Union would need an overhaul.  Ultimately, the 
Serbs and Montenegrins would need to sit down at the 
negotiating table, probably for several months, to redefine 
their relationship.  At that juncture, international 
assistance or mediation might again be necessary.  We should 
review ourselves whether or not it makes sense to deal with 
the two republics separately in the area of development 
assistance.  It might seem incongruous to tell Serbia and 
Montenegro to devolve authority to the state union level if 
we continued to deal with the republics as semi-independent 
entities. 
¶14.  (SBU) While the parties themselves would have the lead 
in re-defining their links, we foresee numerous areas that 
should be addressed.  The SaM Council of Ministers has five 
departments: foreign affairs, defense, international economic 
relations, internal economic relations and protection of 
human and minority rights.  The preeminence of the State over 
its constituent republics in these areas should be emphasized 
in case of continued unity.   Additionally, an office or 
ministry should be established in respect to law enforcement. 
In case of continued unity, a greater emphasis on central 
state-level direction of defense matters, and economic 
issues, will aid in accession to PfP and NATO, and the EU, 
respectively.  This could require transferring to the state 
union level many of the ministerial functions now handled at 
the republic level, including (but not limited to) Finance, 
Education, Labor Agriculture, and the like. 
 
¶15.  (SBU) A glaring weakness in the present Constitutional 
Charter is the absence of any right of taxation to be 
exercised by the State Union. Contributions for the conduct 
of State Union affairs are voted by the republic parliaments 
(see Article 18), leading to an inadequacy of both means and 
oversight, by either state level parliament or ministries. 
Rectifying this (intentional) omission would reduce the 
state's dysfunctionality, and minimize the scope for republic 
intrusion into state affairs (e.g., when the Serbian Republic 
Minister of Finance provoked the resignation of the State 
Union Minister of Defense). 
 
¶16.  (SBU) The presence of two currencies in one state is 
also anomalous (dinar in Serbia, Euro in Montenegro). 
Montenegro has benefited from early adoption of the Euro, 
deriving a lower inflation rate and lower costs of 
international trade, including tourism, which outweigh the 
cost of not being able to utilize fiscal policy as a state 
tool.  With both republics focused on eventual EU membership, 
earlier adoption of the Euro by Serbia would help unify the 
common economic space. 
 
¶17.  (U) The central staffing increases envisioned for an 
embassy will likely be needed for a consulate as well -- 
consular and security staffing to support visa issuance, and 
IM staffing to support communications.  These considerations 
will need to be factored into current plans to build an annex 
to the present consulate building. 
 
And if There is Instability 
--------------------------- 
 
¶18.  (SBU) There is a small risk of instability in connection 
with the referendum.  Anti-independence sentiment could fuel 
sporadic violence, either in an attempt to derail the 
referendum in response to a perceived rigged election or to 
impede implementation of a vote in favor of independence. 
Opposition parties have warned of such a possibility, while 
assuring us that they do not condone such tactics.  The GoM 
has already taken steps to control possible sources of 
turbulence, as exemplified by the arrest and continued 
detention of a so-called "Serbian Volunteer Corps," accused 
of spreading hate speech.  At this time, there has been 
little talk of violence among nationalists in Serbia.  We 
think it very unlikely that Serbia would send volunteers or 
arms to stir up or exacerbate small outbreaks of violence. 
With the leadership of both government parties (DPS and SDP) 
repeatedly stating in public and private that they will 
accept whatever decision is made by the voters, we see less 
risk of violence originating among pro-independence factions. 
 
¶19. (SBU) Significant electoral fraud, enough to affect the 
outcome of the referendum, is possible but unlikely. In ten 
elections in Montenegro monitored by the OSCE and 
international community since 1997, all organized with the 
ruling DPS in control, all were judged free and fair, despite 
minor irregularities.  Nonetheless, Serb nationalists in both 
republics will fully exploit even the perception of 
impropriety to negative consequences.  It is incumbent upon 
the international community to ensure that these 
opportunities are few by closely monitoring the process. 
¶20.  (SBU) While the risk of significant violence or fraud is 
slight, either would make the post-referendum period more 
difficult to manage -- or predict.  Widespread fraud leading 
to an independence vote would require a careful USG and 
international response. 
POLT