VZCZCXRO9938
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHPOD #0195 1591414
ZNR UUUUU ZZH
R 081414Z JUN 07
FM AMEMBASSY PODGORICA
TO RUEHC/SECSTATE WASHDC 0262
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RUEHPOD/AMEMBASSY PODGORICA 0280

UNCLAS PODGORICA 000195 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ENRG MW
SUBJECT: RIFT IN MONTENEGRO'S RULING COALITION (C-RE7-00522) 
 
REF: PODGORICA 94 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE HANDLE ACCORDINGLY 
 
 
 
¶1. (SBU)  A "principled" disagreement over privatization of the 
large thermo-electric plant in Pljevlja (TE Pljevlja) has led to 
a rift in Montenegro's ruling coalition.  The larger Democratic 
Party of Socialists (DPS) is seeking to finalize the sale of TE 
Pljevlja to En+ Group, owned by Russian tycoon Oleg Deripaska. 
Deripaska is seeking a steady power supply for Kombinat Alumina 
Podgorica (KAP), which he bought in December 2004. The smaller 
Socialist Democratic Party (SDP) opposes privatization of TE 
Pljevlja, stating that monopoly public utilities should remain 
in state hands. 
 
 
 
¶2. (SBU) PM Zeljko Sturanovic (DPS), and Parliamentary Speaker 
Ranko Krivokapic (SDP) are trying to patch the split between the 
parties. The difference of views, apparent for months (ref), 
grew pronounced in the past week after the opposition Socialist 
People's Party (SNP) proposed a parliamentary motion to advise 
the GoM that Parliament opposes privatizing TE Pljevlja.  While 
the motion would not be binding on the GoM, the SDP was disposed 
to vote for it, against the wishes of its senior partner in 
government.  Such a vote would further widen the GoM split, and 
affect its stability. Krivokapic told Charge June 7 that the SDP 
would withdraw from government, even at the cost of new 
elections, rather than support privatization of TE Pljevlja, but 
added that a coalition collapse before the new Constitution is 
agreed, probably in September or October, would be a 
catastrophe.  He therefore plans to ask DPS to postpone the vote 
on the government's energy (and energy privatization) policy, 
now delayed until June 12, until after the Constitution is 
adopted.  Note: Krivokapic is looking to strengthen his hold on 
the leadership of the SDP, in advance of the party's July 28 
Conference, and may be trying to refute claims that he has 
become too close to the DPS and Djukanovic. End note. 
 
 
 
¶3. (SBU) Comment: If the vote is postponed the opposition will 
rail against the maneuver, which does bend if not break 
parliamentary rules. But without an SDP vote against its 
governing partner (the DPS) on the books, the opposition would 
be unable to realistically seek a vote of no confidence in the 
GoM.  However, winning support from centrist elements of the 
opposition is required if the constitution is to be adopted by a 
2/3 vote in parliament. It is those same centrist elements that 
have introduced and most strongly support the motion objecting 
to the sale of TE Pljevlja. 
 
 
 
¶4. (SBU) A central question is whether the DPS, particularly 
elements of its leadership (including former PM Milo 
Djukanovic), is willing to forego or postpone the sale of TE 
Pljevlja.  New elections are unlikely to strengthen either 
party. New independent polling data is not expected for another 
ten days or so, but DPS and SDP are both assumed to have lost 
support since last September's election, when their coalition 
just managed to gain 41 of 81 parliamentary seats.  It also 
assumed by many observers that if the SDP left the coalition, it 
would not clear the 3 percent vote threshold needed to stay in 
parliament.  End comment. 
 
FERRILL