VZCZCXRO5010
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSQ #0109/01 0421539
ZNR UUUUU ZZH
P 111539Z FEB 08
FM AMEMBASSY SKOPJE
TO RUEHC/SECSTATE WASHDC PRIORITY 7023
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE 0200
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUESEN/SKOPJE BETA
RUEHSQ/USDAO SKOPJE MK
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL

UNCLAS SECTION 01 OF 02 SKOPJE 000109 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/SCE 
 
E.O. 12958: N/A 
TAGS: PREL PGOV OVIP MK
SUBJECT: MACEDONIA: CODEL TANNER SCENESETTER 
 
 
OVERVIEW: MULTI-ETHNIC DEMOCRACY, NATO CONTENDER 
--------------------------------------------- ---- 
 
¶1. (SBU) Welcome to Macedonia, a strong NATO membership 
contender and a multi-ethnic democracy, the only one in the 
region.  From 2001, when the country teetered on the brink of 
an inter-ethnic civil war, to today, when it is at peace, 
implementing reforms, and pursuing an ambitious free-market 
economic growth and prosperity program, Macedonia has made 
tremendous strides.  NATO Membership Action Plan assessments 
and separate USG assessments confirm that Macedonia has made 
steady progress on meeting NATO standards.  The country looks 
to the United States for leadership and support, and has 
demonstrated that it is a supportive ally and reliable 
international partner. 
 
KEY MESSAGES 
------------ 
 
¶2. (SBU) Your visit to Skopje comes as PM Gruevski's 
multi-ethnic governing coalition heads down the home stretch 
to the NATO Summit at Bucharest, where it hopes to receive a 
membership invitation.  We are urging Skopje to continue 
pursuing the following actions to make it the strongest 
possible contender for a NATO invitation, the Macedonian 
government's top foreign policy goal: 
 
--Continuing constructive and flexible engagement with UN 
Special Negotiator Nimetz toward a solution to the name 
issue, which will benefit Macedonia, Greece, and the region; 
 
--Continuing respect for  the 1995 Interim Agreement between 
Greece and Macedonia on the name issue; 
 
--Continuing anti-corruption efforts, as demonstrated through 
non-partisan arrests and prosecutions; and 
 
--Continuing work with the opposition on implementation of 
the Framework Agreement (FWA) and the May 29 agreement. 
 
NATO MEMBERSHIP: A COMPETITIVE CANDIDATE 
---------------------------------------- 
 
¶3. (SBU) Macedonia is a competitive candidate for membership 
given its strong performance on defense reforms, its 
increased contributions to NATO operations in Afghanistan and 
it years of contributing special forces troops to coalition 
efforts in Iraq.  It has made solid progress on economic 
growth (just over 5 percent GDP growth in 2007), has 
intensified efforts to combat trafficking in persons, and 
passed a religious freedom law in 2007 that is arguably the 
most liberal in the region and guarantees all religious 
communities and groups the right to register and worship 
freely.  Public support for NATO membership is consistently 
high (90 percent), with strong parliamentary consensus in 
support of that goal.  The government has accelerated 
anti-corruption efforts, and Macedonia jumped 21 points on 
the Transparency International corruption perceptions index 
last year. 
 
NAME ISSUE: WORKING TOWARD A COMPROMISE 
--------------------------------------- 
 
¶4. (SBU) A bilateral name dispute with neighboring Greece -- 
though not a NATO membership criterion -- remains the single 
largest obstacle to Macedonia's NATO membership prospects. 
Greece has threatened to veto Macedonia's NATO membership 
invitation unless Skopje agrees to a compromise on the name 
on Greece's terms (changing its constitutional name). 
Greece's position is at odds with its undertaking, per the 
1995 Interim Agreement, not to prevent Skopje's entry into 
international institutions so long as Skopje agreed to do so 
under the provisional "former Yugoslav Republic of 
Macedonia."  Skopje's counter-offer is a "dual name" 
proposal, under which it would keep its constitutional name 
for bilateral and international use, while offering a 
mutually-acceptable name for use with Athens.  We have 
encouraged both sides to show greater flexibility in working 
with UN Special Negotiator Nimetz to find a compromise 
solution; the Macedonian government has indicated it will 
give serious consideration to any proposal from Nimetz. 
 
 
SKOPJE 00000109  002 OF 002 
 
 
FWA IMPLEMENTATION AND MAY 29 AGREEMENT: STEADY PROGRESS 
--------------------------------------------- ----------- 
 
¶5. (U) The government has stated its commitment to full 
implementation of the 2001 Framework Agreement (FWA) that 
ended the inter-ethnic conflict in Macedonia that same year. 
In fact, all FWA-required legislative requirements have been 
met since 2006 and inter-ethnic relations are good. 
Implementation of decentralization (the devolution of power 
from the central government to local governments) was 
launched in 2005, and equitable representation of ethnic 
minorities in public administration has progressed steadily. 
The challenge for this government is to build on what was 
achieved by its predecessor and to fully implement 
decentralization and equitable representation in a 
non-partisan manner. 
 
¶6. (SBU) PM Gruevski's VMRO party and the ethnic Albanian 
opposition DUI party (the largest ethnic Albanian party in 
Macedonia) reached an agreement on May 29, 2007, that 
returned DUI to parliament following a boycott and committed 
PM Gruevski to more specific FWA implementation.  Three of 
the five key requirements of that agreement have been 
implemented.  The remaining two requirements -- a package of 
social benefits for victims of the 2001 conflict and a draft 
law on the use of languages -- are being addressed in working 
groups.  We are urging the government to set a start date for 
implementing the social benefits package, and are working 
with both sides to reach agreement on a draft language law. 
 
KOSOVO: CONSTRUCTIVE PARTNER 
---------------------------- 
 
¶7. (SBU) Macedonia's position on Kosovo final status is 
closely aligned with ours -- support for UN Special Envoy 
Ahtisaari's plan for Kosovo status, which adequately resolves 
the question of demarcation of the Macedonia-Kosovo border. 
(NOTE: The border was delineated, but not demarcated, in a 
2001 agreement between Belgrade and Skopje, which Pristina 
rejected due to the fact that a sliver of Kosovo's territory 
was ceded to Macedonia in that agreement.)  Relations overall 
are excellent, and Skopje has worked closely with Pristina to 
offset a potential Serb blockade after Kosovo declares 
independence.  The GOM has indicated it does not want to rush 
a decision on recognition of an independent Kosovo, as it 
tries to balance relations with Belgrade and Pristina.  At 
the same time, it is determined not to be among the last 
countries to do so, given the importance of gaining 
Pristina's confidence prior to beginning the process of 
border demarcation. 
 
ECONOMIC REFORM AND GROWTH PROGRESS 
----------------------------------- 
 
¶8. (U) Macedonia is showing positive economic performance, 
with the country recently ranked by the World Bank as one of 
the top 10 "most improved" countries in carrying out business 
environment reforms.  PM Gruevski has raised public sector 
wages and cut VAT rates on some key consumer items, which has 
helped keep his poll numbers strong.  Starting in 2008, 
personal and corporate tax rates fell from 12 percent to 10 
percent (flat tax), one of the lowest tax rates in Europe. 
The government hopes to succeed in attracting additional 
foreign direct investment to support its efforts to tackle 
unemployment, officially at over 37 percent. 
MILOVANOVIC