VZCZCXRO4631
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHVJ #1464/01 1801308
ZNY CCCCC ZZH
P 291308Z JUN 06
FM AMEMBASSY SARAJEVO
TO RUEHC/SECSTATE WASHDC PRIORITY 3861
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEKJCS/JCS WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/OSD WASHDC
RUFOAOA/USNIC SARAJEVO

C O N F I D E N T I A L SECTION 01 OF 02 SARAJEVO 001464 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR (DICARLO), D (SMITH), P (BAME), EUR/SCE 
(ENGLISH, SAINZ, FOOKS), NSC FOR BRAUN, USNIC FOR WEBER, 
GREGORIAN, OSD FOR FLORY 
 
E.O. 12958: DECL: 06/25/2016 
TAGS: PGOV PREL BK
SUBJECT: BOSNIA:  JUNE PIC AGREES ON OHR CLOSURE TIMELINE, 
JUNE 2007 
 
 
Classified By: AMBASSADOR DOUGLAS MCELHANEY, REASONS 1.4 (B) AND (D). 
 
¶1.  (C) SUMMARY:  At the June 22-23 meeting of Peace 
Implementation Council (PIC) Steering Board Political 
Directors in Sarajevo, the Steering Board agreed to begin 
preparations for the closure of OHR in June, 2007.  The 
Steering Board agreed to "review and confirm" this decision 
at the Feb/March 2007 PIC Steering Board Meeting, and 
endorsed an enhanced EU Special Representative (EUSR) to 
succeed OHR to coordinate meetings of the international 
community and to engage with BiH counterparts on a range of 
issues.  (Note: HighRep Schwarz-Schilling was less nuanced at 
his post-PIC press conference, stating very simply that the 
PIC had "decided to close the Office of the High 
Representative," although he did make clear that the decision 
would be reviewed in early 2007.  He further asserted that he 
would be the new post-OHR EUSR, although we understand the 
EU/EC has not made such a decision.  End Note.)  Both 
President Tihic and PM Terzic pleaded with the PIC not to 
announce the closure of OHR at this time, citing the upcoming 
October BiH elections and the potential for regional 
instability resulting from a Kosovo status decision.  Terzic 
went so far as to say he believed the international community 
(IC) was "making a terrible mistake," and that the last time 
the IC made such a mistake, 300,000 Bosnians paid with their 
lives.  EUR/SCE Director Charles English headed the U.S. del. 
 END SUMMARY. 
 
¶2.  (C) In a June 22 meeting that included an appearance by 
BiH President Tihic, the HighRep gave an assessment of the 
status of BiH's reform process in an effort to inform the 
debate over the proposed closure of OHR in June 2007 and 
whether to retain the Bonn Powers beyond the end of the OHR 
mandate.  The HighRep noted that the process of reform had 
slowed significantly in the last few months, precisely when 
it should be accelerating if a Stabilization and Association 
Agreement (SAA) is to be signed with the European Commission 
by the end of the year.  He also listed increased ethnic 
tensions in Mostar, the talk of a referendum in the Republika 
Srpska following the Montenegrin independence vote and an 
upcoming decision on Kosovo as potential flashpoints. 
However, the HighRep argued that none of these issues, in his 
view, should prevent the transition from OHR to an EUSR in 
June 2007 from proceeding. 
 
¶3.  (C) Tihic addressed the PIC Steering Board specifically 
to argue against the Steering Board announcing a plan to end 
OHR.  He provided six reasons why the closure of OHR should 
not be announced now:  1. the Montenegrin independence 
referendum (and the rhetoric of referendum, as a result, in 
the RS); 2.  an impending decision on Kosovo's status; 3. 
the failure of constitutional reform and (in his opinion) the 
opportunistic radicalization of Bosnian politics that has 
resulted; 4.  October's national elections; 5. war criminals 
who remain at large; and 6.  a (perceived) need to link 
signing an EU SAA and closure of OHR.  In a follow-on session 
with BiH authorities June 23, PM Terzic echoed Tihic,s 
concerns, going so far as to say he believed the IC was 
"making a terrible mistake," and that the last time the IC 
had made such a mistake, Bosnia had "paid with 300,000 
lives." 
 
¶4.  (C) Later in the June 23 open session, the Steering Board 
called on BiH officials to continue progress on reforms 
necessary to conclude a Stabilization and Association 
Agreement (SAA) with the EU, particularly police reform, a 
public broadcasting law and resolution of the dispute on 
revenue allocation.  PIC members further underlined that 
despite BiH leaders' statements to the contrary, the PIC 
would make no direct link between concluding SAA negotiations 
and the end of the OHR mandate. 
 
¶5.  (C) The prevailing opinion among PIC Political Directors 
at the closed session was that a June 2007 closure, and the 
announcement of it now, was both reasonable and necessary if 
BiH leaders are to assume full responsibility for governing 
and meeting the demands of the SAA process.  A final decision 
to review and confirm the end of OHR would be made at the 
Feb/March 2007 PIC Steering Board meeting.  A decision on any 
possible continued use of Bonn Powers post-OHR also would be 
taken at the Feb/March 2007 meeting. 
 
¶6.  (C) The Steering Board welcomed the EU/EC proposal for an 
enhanced EUSR to coincide with the end of OHR.  This enhanced 
 
SARAJEVO 00001464  002 OF 002 
 
 
EUSR would coordinate coordinate meetings of the IC in BiH 
and engage with BiH counterparts on a range of issues related 
to EU integration, including constitutional reform.  USDel 
expressed support for an enhanced EU role in BiH post-OHR, 
but also made clear that the new EUSR would not have the 
authority to coordinate or speak on behalf of the 
international community as had OHR. 
 
¶7.  (C) In its communique, the PIC Steering Board announced 
it had agreed to begin preparations to close OHR in June 
¶2007.  HighRep Schwarz-Schilling was more direct in his 
post-PIC press conference, stating that the PIC had "decided 
to close the Office of the High Representative", although he 
made clear the plan to review the decision in early 2007 (a 
fact that was reflected in the media).  He further asserted 
that he would be the new EU Special Representative (EUSR), 
although we understand the EU/EC has not decided on such an 
appointment. 
 
¶8.  (C)  COMMENT:  The PIC Steering Board,s decision to move 
ahead with OHR,s phase out is an important one for BiH to 
truly move beyond Dayton and take on full responsibility for 
its own affairs.  Tihic,s and Terzic,s dire predictions 
notwithstanding, the February/March 2007 &review date8 will 
provide an opportunity to reassess this decision based on the 
prevailing conditions on the ground and in the region.   In 
the meantime, we will continue to work to buck up worried 
Bosniaks and reassure them that the closure of OHR is merely 
another step forward on the road to Bosnia's transition to 
becoming a modern European state.  The backdrop of a 
disengaged and ineffective HighRep should only serve to 
strengthen the argument that it is time to move on.  The 
internal EU/EC discussion over the mandate of the new EUSR 
has only begun and will bear careful watching. 
Schwarz-Schilling's obdurate insistence on spelling out "his" 
future mandate may only harden EC resolve to water it down. 
END COMMENT. 
 
¶9.  (U)  This cable was cleared by Charles English, EUR/SCE 
Director. 
MCELHANEY