VZCZCXYZ0245
PP RUEHWEB

DE RUEHSQ #0171/01 0631715
ZNR UUUUU ZZH
P 031715Z MAR 08
FM AMEMBASSY SKOPJE
TO RUEHC/SECSTATE WASHDC PRIORITY 7137
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE 0233
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUESEN/SKOPJE BETA
RUEHSQ/USDAO SKOPJE MK
RUCNDT/USMISSION USUN NEW YORK 2213
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL

UNCLAS SKOPJE 000171 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/SCE 
 
E.O. 12958: N/A 
TAGS: PGOV MK NATO GR
SUBJECT: MACEDONIA: HDAC CODEL SCENESETTER (CODEL PRICE) 
 
 
OVERVIEW: MULTI-ETHNIC DEMOCRACY, NATO CONTENDER 
--------------------------------------------- ---- 
 
¶1. (SBU) Ambassador Gillian Milovanovic and the embassy team 
warmly welcome you to the Republic of Macedonia, a strong 
NATO membership contender and the only multi-ethnic democracy 
in the region.  Macedonia has made tremendous strides from 
2001, when the country teetered on the brink of an 
inter-ethnic civil war. Today, it is at peace, implementing 
reforms, and pursuing an ambitious free-market economic 
growth and prosperity program.  NATO Membership Action Plan 
assessments and separate USG assessments confirm that 
Macedonia has made steady progress and now substantially meet 
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, the Macedonian government's top 
foreign policy goal.  We are urging Skopje to continue 
pursuing the following actions to make it the strongest 
possible contender: 
 
--Constructive and flexible engagement with UN Special 
Negotiator Nimetz toward a solution to the name issue, which 
will benefit Macedonia, Greece, and the region; 
 
--Respect for the 1995 Interim Agreement between Greece and 
Macedonia; 
 
--Anti-corruption efforts, as demonstrated through 
non-partisan arrests and prosecutions; and 
 
--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 
its 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, guaranteeing 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 commitment, per the 
1995 Interim Agreement, not/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; recent discussions between the Macedonian and Greek 
negotiators in New York, with Nimetz mediating, resulted in 
little movement toward a mutually acceptable solution. 
 
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 measures. 
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 foster 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. 
NAVRATIL