UNCLAS        ZAGREB 00095

SIPDIS
P 081547Z FEB 08

FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 8564
INFO RUEHBS/AMEMBASSY BRUSSELS 1014
RUEHFR/AMEMBASSY PARIS 0107
RUEHSQ/AMEMBASSY SKOPJE 2609
RUEHTI/AMEMBASSY TIRANA 0834
RUEHNO/USMISSION USNATO 3474

UNCLAS SECTION 01 OF 02 ZAGREB 000095 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: OREP AMGT ASEC AFIN AORC PREL PGOV NATO HR
SUBJECT: CROATIA: SCENESETTER FOR CODEL TANNER 
 
¶1. You are coming to Croatia just six weeks after the formation of 
Prime Minister Ivo Sanader's second government, as he and other 
leaders look ahead to NATO's Bucharest Summit.  After encouraging 
feedback from NATO allies during the January review of Croatia's 
progress under the Membership Action Plan, the PM is confidently 
anticipating a membership invitation in April.  Accession to NATO 
represents a tremendous step forward for this young nation as it 
takes its place among the democratic, free-market countries of 
Europe with a level of freedom, security, and prosperity that were 
unimaginable fifteen years ago.  Just beginning a two-year term on 
the United Nations Security Council and hoping to conclude accession 
negotiations with the European Union in 2009, the Croatian 
Government sees itself as a leader in southeastern Europe, ready to 
promote regional stability and to help integrate its neighbors into 
the Euro-Atlantic community. 
 
GLOBAL CONTRIBUTOR TO STABILITY AND SECURITY 
-------------------------------------------- 
 
¶2. Just a decade ago, Croatia was a consumer of international 
security resources, with U.N. forces ensuring the peaceful 
reintegration of the eastern Slavonian region after the 
disintegration of the former Yugoslavia.  Today, Croatia is an 
exporter of stability, both in the region and globally: 
- as a strong, active partner in the Adriatic Charter with Albania 
and Macedonia, promoting democratic and defense reforms on the road 
to NATO integration; 
- as a provider of soldiers and police to 11 UN peacekeeping 
missions from Kosovo to East Timor; 
- as a solid contributor to NATO operations, with a 200-troop ISAF 
contingent in Afghanistan (set to grow to 300 by the end of 2008), 
and liaison officers involved in Operation Active Endeavor, NATO's 
counterterrorism mission in the Mediterranean; 
- as a host of NATO exercises, including NATO amphibious landing and 
civilian disaster response exercises in 2007 that were the largest 
ever held in a non-member state. 
 
¶3. Croatia's constructive engagement within the region continues to 
be one of its greatest contributions to stability.  During its 
chairmanship of the South East European Cooperation Process in the 
first half of 2007, 
Croatia led the formation of a permanent Regional Cooperation 
Council based in Sarajevo.  We have also had an increasingly 
productive dialogue with Croatian leaders on southeastern Europe's 
"unfinished business" in Bosnia and Herzegovina and Kosovo. 
Relations with Serbia remain sensitive, but President Stjepan Mesic 
and Prime Minister Sanader both have good relations with their 
counterparts in Belgrade and firmly support Serbia's future in 
Europe and NATO. 
 
PROMOTING PUBLIC SUPPORT FOR NATO MEMBERSHIP 
-------------------------------------------- 
 
¶4. Local public support for NATO accession has been a key concern 
among allies during Croatia's candidacy, but poll numbers show 
steady growth in favor of membership and the Sanader government is 
re-doubling its efforts to educate the public prior to Bucharest. 
Thanks to previous government outreach and U.S. Embassy-support NGO 
programs, all recent surveys show support ranging from 51 to 54 
percent, with opposition fluctuating around 30 percent. 
 
¶5. Over the past year, the government has succeeded in countering 
several misconceptions about Alliance membership (i.e. the myth that 
NATO wants to build naval bases on the Croatian coast or force 
Croatia to send troops wherever the U.S. directs).  In fact, the 
government plans nationwide outreach activities during the coming 
weeks to solidify support to help ensure an invitation in April. 
The Embassy has provided support to a number of key NGOs which are 
also engaged in educating the Croatian public about what it means to 
be a member of NATO.  This effort has contributed to our goal of 
ensuring that Croatia will become an active and capable member of 
the Alliance. 
 
COMMITMENT TO DEMOCRATIC VALUES 
------------------------------- 
 
¶6. Croatia's democratic reforms have been another focus of its NATO 
accession process.  In all key areas, including judicial reform, 
fighting crime and corruption, and the return of refugees, the 
Government has achieved concrete progress which paved the way for 
the closure of the OSCE mission at the end of 2007. 
 
¶7. While the judiciary remains an area for further reforms and the 
public still perceives it as one of the country's main sources of 
corruption, we have nevertheless witnessed steady progress.  Court 
backlogs have shrunk 30 percent in the past two years, and 
improvements in court administration are expected to speed up the 
process.  The Ministry of Justice is actively improving the training 
of judges and supervision of judicial administration, and Croatian 
courts are trying war crimes cases involving defendants of all 
ethnicities in a fair manner, including high-profile cases 
transferred from The Hague Tribunal. 
 
¶8. Croatia's steady implementation of its National Strategy to 
Combat Organized Crime and Corruption is yielding results.  The 
government has established police and prosecutor task forces to 
combat organized crime and has begun freezing assets in narcotics 
cases.  The Office for the Suppression of Corruption and Organized 
Crime conducted three high-profile stings in the past six months, 
leading to 36 arrests of government officials and private citizens 
for corruption related to privatization, land registry, and the 
issuance of building permits. 
 
¶9. On refugee returns, Croatia has welcomed back more than 125,000 
refugees of Serb ethnicity, and the Government has largely completed 
its programs of home repossession and reconstruction, infrastructure 
development.  It has also begun housing programs for former tenants 
of socialized apartments. However, assisting this category of 
returnees and addressing issues related to pensions of those who 
worked in former Serb-held territories during the war will remain a 
long political and budgetary challenge. 
 
DEFENSE MODERNIZATION: BECOMING A CAPABLE ALLY 
--------------------------------------------- - 
 
¶10. The Croatian military has nearly completed its restructuring in 
line with NATO standards, and is now focused on modernization and 
deployability as outlined in the Ministry of Defense's Long Term 
Development Plan (LTDP) for the Croatian Armed Forces.  Defense 
spending is set to rise to two percent of GDP by 2010, and 
reductions in personnel costs are beginning to make room in the 
budget for major equipment modernization.  The military completed a 
tender for armored personnel carriers in 2007 and plans to pursue 
purchase of advanced fighter aircraft and coastal patrol vessels in 
the coming years. 
 
STEADY GROWTH, BRIGHT FUTURE 
---------------------------- 
 
¶11. Croatia's economy has enjoyed steady growth since 2000, led by 
strong tourism receipts (tourism makes up 20% of GDP), a buoyant 
construction industry and growing mortgage and consumer lending. 
Although Croatia has grown at a slower rate than other economies in 
Central and Eastern Europe, early 2007 figures showed the economy 
growing at a brisk 6.9 percent.  Although Croatia's per capita GDP 
of $9,000 is high by regional standards and is reflected in a 
relatively high standard of living, fast growth rates will be 
essential to closing the gap between Croatia and its wealthier 
western European neighbors. 
 
¶12. EU accession talks, opened in 2005, brought new confidence in 
Croatia's economic future, particularly as the Government was forced 
to implement long-overdue reforms.  While more remains to be done to 
improve transparency, fight corruption, and reduce the overly-large 
state role in the economy, Croatia is emerging as an attractive 
place for foreign investment with its growing economy, low 
inflation, stable exchange rate, and developed infrastructure. 
 
BRADTKE