VZCZCXRO5921
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVB #0661/01 2621302
ZNR UUUUU ZZH
P 181302Z SEP 08
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 8629
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 ZAGREB 000661 
 
SENSITIVE 
SIPDIS 
 
FOR EUR/SCE, EUR/PPD, EUR/RPM AND EUR/ERA 
OSD FOR POPOVICH 
 
E.O. 12958: N/A 
TAGS: PREL PGOV HR
SUBJECT: ZAGREB WEEKLY ACTIVITY REPORT - SEPTEMBER 17, 2008 
 
¶1.  (U) HUNGARY IS FIRST NATO MEMBER TO RATIFY CROATIAN AND 
ALBANIAN ACCESSION: 
The Hungarian Parliament on September 15 voted overwhelmingly 
in favor of Croatia's and Albania's Accession Protocol, 
making Hungary the first NATO member state to approve this 
round of NATO enlargement.  having served as Croatia's 
"Contact Point" country during the MAP process, Hungary was 
keen to be the first country to approve its neighbor's 
accession.  To celebrate the event, the President of the 
Croatian Parliament is hosting a reception for NATO country 
ambassadors on September 18.  (RHoltzapple) 
 
¶2. (SBU) CROATIAN PARLIAMENTARIANS ON NATO TOUR: 
From September 3 to 10, a multi-party delegation of the 
Croatian Parliament (Sabor) traveled to Brussels, Brunssum, 
Washington and Norfolk on a USG-sponsored tour to learn more 
about NATO.  The group included six members of the Sabor's 
new Defense Committee.  During meetings at ANTO headquarters 
and with staff from the US missions to NATO and EU, the 
parliamentarians had lengthy discussions about NATO's future 
role in Southeast Europe and NATO's relations with Russia and 
Georgia.  During a visit to the Croatian Mission to NATO, the 
delegation was also able to speak by video-link with Croatian 
troops deployed in Afghanistan.  At the Operations Command in 
Brunssum, parliamentarians were pleased to hear very positive 
evaluations of Croatia's performance in ISAF.  The visit to 
the Allied Command for Transformation (ACT) in Norfolk 
informed the visitors of the ATC's potential to help members 
in defense planning.  A  highlight of the trip was the chance 
the parliamentarians had to attend the September 10 Senate 
Foreign Relations Committee hearing on Croatia and Albania's 
accession to NATO.  In remarks to Croatian media after the 
hearing, the Chairman of the Defense Committee noted that 
support for accession by Croatia and Albania to NATO was so 
strong that Senators' comments and questions focused on the 
Georgia crisis instead. (PD'AmicoZTomic) 
 
¶3.  (U) OPPOSITION LEADER PAYS CONTROVERSIAL VISIT TO 
BLEIBURG: 
A delegation of the Social Democratic Party (SDP), led by 
party president Zoran Milanovic, paid a controversial visit 
to Bleiburg, Austria, and Tezno, Slovenia, on September 11. 
Bleiburg was where fleeing Ustasa (pro-fascist/pro-Nazi) 
sympathizers and other civilian refugees were handed over by 
British allied forces to Yugoslav Communist Partisans at the 
end of WWII.  A large, though disputed, number were executed 
or died during a forced march back to Yugoslavia, with one of 
the largest mass grave sites in Tezno.  Milanovic denied 
accusations the trip was politically motivated or timed to 
appeal to nationalist voters in upcoming local elections.  He 
said his trip was to show a balanced SDP approach to crimes 
committed during WWII regardless of the victim, and to open a 
dialogue within Croatia regarding the events that took place 
at these sites.  Prominent leaders and historians from the 
Croatian Jewish community dropped earlier plans to accompany 
Milanovic after protests were raised within the community. 
(JNCallahan) 
 
¶4. (U) EU WARNS CROATIA TO PICK UP THE PACE IN ACCESSION 
NEGOTIATIONS: 
Following meetings with PM Sanader on September 16, European 
Commission (EC) President Barroso told the press Croatia will 
need to speed up the pace of reforms if it is going to meet 
the necessary benchmarks by November in order to stay on 
course for completing negotiations in late 2009.  Barroso 
specifically noted two chapters: Judiciary and Fundamental 
Rights, where Croatia must increase its effectiveness in 
fighting corruption and conducting war crimes trials, and 
Competition Policy, where Croatia must make more progress in 
privatizing its shipyards and complying with EU rules on 
state subsidies.  Sanader said Croatia was aware of the task 
ahead wand would do what was needed to complete negotiations 
next year.  COMMENT: Despite the optimism Sanader continues 
to project, this warning from the EC may be a first step in 
easing back from the ambitious timeline of completing 
negotiations in 2009. (SLLitke) 
 
¶5. (U) PRESIDENT AND GOVERNMENT TRADE BARBS OVER ECONOMIC 
PERFORMANCE: 
On September 16, President Mesic used his opening address at 
the Zagreb Autumn Trade Fair to blame PM Sanader and his 
government for Croatia's high inflation and other economic 
problems.  He said high inflation is the result of "policy 
that spends but does not earn," with a growing bureaucracy 
and a failure to increase economic production.  In response, 
DPM and Minister of Economy Polancec implied Mesic's 
understanding of the economic situation was insufficient and 
 
ZAGREB 00000661  002 OF 002 
 
 
countered that "inflation in Croatia is completely imported" 
and the result primarily of fuel and food prices.  Speaking 
from Brussels, PM Sanader said Croatia's economic indicators 
are good and everyone has welcomed the steps the GOC has 
taken to curb inflation.  He added, "the speech must have 
been written by (Mesic's) advisors, but we will put up with 
them for one more year." (NOTE: Mesic's presidential term is 
due to end in early 2010.) (SLLitke) 
 
¶6. (U) INA SAYS MOL SHARE PRICE OFFER OF 2800 HRK IS 
"ACCEPTABLE": 
Mesic also used his Trade Fair speech to challenge current 
efforts to further privatize Croatia's largest oil and gas 
company INA, questioning why the government would sell such 
strategic assets in turbulent economic times during which 
everyone else was grasping to secure energy supplies.  PM 
Sanader, answering questions in Brussels on the Mesic speech, 
said the government was simply implementing a privatization 
law passed during the SDP government of Ivica Racun.   Dep PM 
Polancec also noted that a share swap with MOL, while 
reducing the GOC's shares in INA to 25 percent, would also 
give the GoC an ownership stake in MOL, and extend current 
restrictions on MOL's holdings within INA, meaning such 
shares could not be sold on to other buyers for an extended 
period.  On September 15, INA's board announced that the 
offer from Hungary's MOL was of 2800 HRK (approx. $560) per 
share was acceptable, citing the current business climate and 
INA profit margins.  The company's union, however, continues 
to claim the offer is inadequate and argues the offered price 
should be as high as 5000 HRK, despite a Price Waterhouse 
Coopers study that valued INA shares at only 1300 HRK. 
(DHWestfall) 
 
¶7.  MINNESOTA NATIONAL GUARD COMMANDER VISITS CROATIA: 
Minnesota National Guard's Adjutant General Shellito wrapped 
up his visit to Croatia on September 16.  TAG Shellito met 
with Ambassador Bradtke, Croatia's Chief of the General Staff 
(CHOD), and the Chief of the Croatian Army to further 
development of the State Partnership between the Croatian 
Armed Forces and the Minnesota NG.  Briefings and discussions 
included plans for a joint Operational Mentoring and Liaison 
Team (OMLT) for ISAF intended to deploy to Afghanistan in 
¶2009.  One result of the trip is that the Minnesota NG 
sending a team in October to go through the Military Decision 
Making Procedure with the Croatian military to better sculpt 
each sides' respective contributions to the joint OMLT. 
(CDavis) 
 
¶8.  (U) TRAINING ON COMBATING TERRORISM: 
The US Embassy's Office of Defense Cooperation coordinated an 
intense, one-week mobile training team course entitled 
"Intelligence in Combating Terrorism" from 8 to 12 September 
¶2008.  The purpose of the week-long seminar was to train 
Croatian, US. and other allied military and civilian 
personnel to analyze terrorist and other sub-national threats 
in the contemporary operating environment.  The instructors 
from the US Intelligence School at Ft. Huachuca, Arizona 
helped the students to examine terrorist organization 
structures; state support to terrorist groups; terrorist 
strategy and tactics; terrorist threat assessment for 
military installations and deploying units; and terrorist use 
of weapons of mass destruction.  The center piece of the 
course was the analytical methods for examining terrorist 
groups, giving the students the tools they need to comb 
through large amounts of information, find the key elements 
and assemble the underlying picture so that commanders can 
take appropriate action. (CDavis) 
Bradtke