VZCZCXRO5948
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBW #0418/01 1141557
ZNR UUUUU ZZH
P R 231557Z APR 08
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC PRIORITY 0224
INFO RHEFDIA/DIA WASHINGTON DC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEKJCS/JOINT STAFF WASHDC
RHEHAAA/NSC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHBW/AMEMBASSY BELGRADE 0323

UNCLAS SECTION 01 OF 03 BELGRADE 000418 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EUR FOR DAS BRYZA 
USDOC FOR 4232/ITA/MAC/EUR/OEERIS/SSAVICH 
 
E.O. 12958: N/A 
TAGS: KPAO PBTS PGOV PHUM PINR PREL ECON ENRG SR
SUBJECT: SERBIA: TO BRUSSELS OR MOSCOW? SAA AND GAZPROM DEAL 
SPOTLIGHT DIVISIONS 
 
REF: BELGRADE 336 
 
BELGRADE 00000418  001.2 OF 003 
 
 
SUMMARY 
------- 
 
 
 
¶1. (SBU) Serbia's leaders and media have seized on two pending 
agreements, the EU Stabilization and Association Agreement (SAA) 
and a bilateral energy deal with Russia, as symbols of the 
struggle between political allies turned adversaries to chart 
the country's direction.  President Boris Tadic leads the march 
toward an SAA signing and onward to Europe, and Prime Minister 
Vojislav Kostunica heads the camp facing east.  Both have made 
immediate signing of the agreement they champion (and deferral 
of the other) top campaign issues in the run-up to parliamentary 
and municipal elections.  As a result, May 11 may decide whether 
Serbia will make cooperation with the EU or with Russia, a 
national priority.  End Summary. 
 
 
 
SAA Battle Continues 
 
-------------------- 
 
 
 
¶2. (SBU) The governing coalition between Prime Minister 
Kostunica's Democratic Party of Serbia (DSS) and President 
Tadic's Democratic Party (DS) collapsed in March due to 
differences over EU integration.  While Tadic's party had 
advocated signing a Stabilization and Accession Agreement (SAA) 
with the EU as soon as possible, Kostunica and the DSS said that 
signing would be tantamount to approving the EU deployment of 
its rule of law mission (EULEX) to Kosovo. 
 
 
 
¶3. (U) The parties' differences on an SAA have grown into a 
major campaign issue for Serbia's May 11 parliamentary and local 
elections.  The DSS has accused the DS of weakness on Kosovo, 
and alleged that Tadic's party cares more about joining the EU 
than keeping Kosovo.  Kostunica and his allies have said that 
Serbia must not sign an SAA unless the EU clearly recognized 
Serbia's borders to include Kosovo.  On April 21, Kostunica said 
that signing the SAA was "not in Serbia's state interest." 
Velimir Ilic, leader of DSS coalition partner New Serbia (NS), 
threatened to recall Tadic from office if he signed an SAA. 
Kostunica advisor Branislav Ristivojevic questioned the legality 
of an SAA signed by Tadic, telling the media on April 18 that 
the signature would be valid only in the eyes of the DS-led 
coalition and "their friend" EU High Representative Javier 
Solana.  The Radicals and Socialists also oppose signing an SAA 
on the grounds that signing meant de facto approval of the EU's 
intention to deploy EULEX to replace the UN Mission in Kosovo 
(UNMIK) authorized by UNSC Resolution 1244.  (Note:  Kosovo has 
been under UN supervision since the NATO bombardment in 1999. 
End Note.) 
 
 
 
Toward Europe - as Soon as Possible 
 
----------------------------------- 
 
 
 
¶4. (U) Conversely, the heart of the DS election campaign is EU 
integration.  Its motto is "For a European Serbia," and campaign 
ads highlight the benefits of EU integration, i.e. jobs, 
development, and better education -- the electorate's top 
concerns, according to most recent polling.  IRI polling data 
suggests that the DS has successfully made the link between EU 
membership and improved standard of living and that a DS-led 
coalition has the best chance of taking Serbia to Europe. 
 
 
 
¶5. (U) DS officials, most notably Tadic and Foreign Minister Vuk 
Jeremic, have campaigned on the need to sign the SAA 
immediately.  In an April 18 speech to students and diplomats, 
 
BELGRADE 00000418  002.2 OF 003 
 
 
Jeremic said that Serbia must not miss the chance to become part 
of the EU or it would risk isolation -- "there is no middle 
ground."  Tadic has tried to dismiss Kostunica and his allies' 
campaign and accused them of hypocrisy, noting that the DSS had, 
in fact, supported signing an SAA while they were in government. 
 Uncoupling the SAA from Kosovo independence, Tadic reminded the 
media on April 20 that Article 135 of the SAA "confirms UN 
Resolution 1244" and therefore does not legitimize Kosovo's 
independence. 
 
 
 
DSS Pushes Energy Deal (the anti-SAA) 
 
------------------------------------ 
 
 
 
¶6.  (U) The DSS counterpoint to DS talk about signing the SAA 
and pursuing a course toward the EU is Kostunica's focus on 
pushing ahead with parliament's ratification of the Energy 
Framework Agreement signed in Moscow on January 25 (reftel). 
Following an April 19 meeting with Russian Emergency Situations 
and Disaster Relief Minister Sergei Shoigu, Kostunica's office 
released a statement that "Shoigu expressed concern over the 
fact that Serbia has not ratified the energy agreement...and 
underlined that it would be important that the Serbian 
government and Serbian parliament ratify this agreement by May 
11."  Deputy Prime Minister Djelic (DS) released a statement to 
news agency BETA following Tadic's meeting with Shoigu that 
said, "Tadic and Shoigu agreed that a technical government, 
immediately after the vote, will forward that bill to the 
Parliament for ratification, which is logical, because it is now 
senseless to forward any bill to a non-existing parliament." 
Tadic said Serbia needs "concrete agreements [with Russia] which 
cannot be questioned in the future." 
 
 
 
Showdown? 
 
--------- 
 
 
 
¶7. (U) The DSS hopes to push the ratification issue to a 
showdown in Parliament.  DSS spokesperson Mladenovic said on 
April 18 that Kostunica would again call a meeting of the 
caretaker GOS cabinet on April 24 to let "officials who want to 
destroy Serbia...correct their mistake" and agree to send the 
deal to Parliament for ratification.  Serbian Radical Party 
(SRS) official Tomislav Nikolic supported on April 19 the DSS 
view that Parliament should convene to ratify the deal as an 
"urgent" session.  (The DSS and Radicals combined have a 
majority in Parliament.)  In a party statement, the DS accused 
the DSS and SRS of plotting a "coup" by calling an "illegal" 
parliamentary session.  Parliament Speaker Oliver Dulic has been 
silent on whether he would convene an emergency session, if 
directed to do so by the cabinet. 
 
 
 
Jeremic: Man in the Middle Sees Serbia in Same Position 
 
--------------------------------------------- ---------- 
 
 
 
¶8. (SBU) Foreign Minister Vuk Jeremic has publicly tried to 
straddle the politics of the DSS and DS blocs.  In an April 18 
speech, he argued that EU integration would not mean choosing 
the West over Russia.  Rather, it would institutionalize 
Serbia's special role, as a bridge between Europe and Russia, 
and friend of both.  Serbia could then provide Russia 
unprecedented access to Brussels and enhance EU understanding of 
Russian thinking. 
 
 
 
COMMENT 
 
 
BELGRADE 00000418  003.2 OF 003 
 
 
------- 
 
 
 
¶9. (SBU) The stuggle over the agreements defines the differences 
between DS and DSS.  Both agreements remain largely theoretical. 
 In the first place, it is unlikely the EU even will offer 
Serbia an SAA any time soon, because of Serbia's lack of 
progress in cooperating with the International Criminal Tribunal 
in The Hague.  In the second place, the Russian energy agreement 
remains theoretical because it is linked to possible 
construction of a new South Stream gas pipeline, which remains 
in early planning stages.  Without the pipeline, Serbia will 
have sold its "NIS" oil industry refinery for a fraction of its 
market price, confirming most analysts' suspicions that the sale 
was political in appreciation for Russian support for Kosovo. 
Discussion of both agreements helps their relevant Serbian 
supporting parties avoid the real campaign issues -- 
establishing rule of law and developing an attractive foreign 
investment climate.  End Comment. 
BRUSH