VZCZCXRO4186
PP RUEHPOD
DE RUEHVB #0264 1341034
ZNR UUUUU ZZH
P 141034Z MAY 09
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 9211
INFO RUEHVEN/USMISSION USOSCE 1095
RUEHNO/USMISSION USNATO 3496
RUEHBW/AMEMBASSY BELGRADE 0041
RUEHLJ/AMEMBASSY LJUBLJANA 6450
RUEHPOD/AMEMBASSY PODGORICA
RUEHPS/AMEMBASSY PRISTINA 0607
RUEHVJ/AMEMBASSY SARAJEVO 0320
RUEHTI/AMEMBASSY TIRANA 0851

UNCLAS ZAGREB 000264 
 
SIPDIS 
 
DEPT FOR PRM, EUR/SCE AND EUR/PRM, BELGRADE FOR REFUGEE ASSISTANT 
KURIC 
 
E.O. 12958: N/A 
TAGS: PGOV PREF PREL EUC HR
SUBJECT: GOVERNMENT CONFIRMS COMMITMENT FOR REFUGEE HOUSING IN 
VUKOVAR AREA AMID RUMORS OF BUDGET CUTS 
 
¶1. (U) SUMMARY: Despite expected government-wide budget cuts, the 
GOC has said there will be no interruption of housing construction 
for the Vukovar area during this budget year. Returnees to this 
region comprise the lion's share of beneficiaries in the 
government's housing care program inside the Areas of Special State 
Concern (ASSCs or areas most affected by the war).  All housing seen 
during a Vukovar area field visit was of high quality. END SUMMARY. 
 
¶2. (U) On Friday, May 8, working level representatives from the 
European Commission, UNHCR, U.S. Embassy, and OSCE Office in Croatia 
visited housing care beneficiaries and housing care construction 
sites in the Vukovar area.  Ana-Marija Radic, Head of the 
Directorate for Areas of Special State Concern at the Ministry for 
Regional Development, Foresty and Water Management, led the visit. 
Ms. Radic reported that 450 apartments in the Vukovar area are 
planned for construction during the 2009 fiscal year. Of these, 248 
are scheduled to be completed within three months, and the rest are 
to be completed by September.  Ms. Radic said the Vukovar area has 
840 pending beneficiaries (former OTR holders who have been approved 
for housing assistance), or approximately half the pending 
beneficiaries for all ASSCs within Croatia. 
 
¶3. (U) Due to the global financial slowdown, the GOC is expected to 
implement significant cuts across its budget, though the ministries 
affected and the exact amounts are unconfirmed.  When asked if 
possible budget cuts could affect the provision of housing care in 
the Vukovar area, Ms. Radic said her Ministry would have enough 
money to finish construction planned for 2009. The 450 apartments 
expected to be completed by September are "covered" and any 
construction done after September will be in the 2010 budget.  She 
did note that financing could be a problem the construction firms 
the Ministry contracts.  Many are having financial troubles and the 
banks are unwilling to give loans. She said that this could make 
future construction slower than expected.  However, a representative 
from one of the construction firms working on some of the Vukovar 
projects later said that the problem is not as grave as Ms. Radic 
implied and some of the financial problems could be lessened if they 
received quicker payments from the government. 
 
¶4. (U) The delegation first visited a neighborhood with apartment 
buildings in various stages of reconstruction: some not yet begun, 
some in the middle of reconstruction, and some almost complete. The 
side-by-side comparison of the buildings allowed the group to see 
the extensive damage that existed and compare it with what will be 
the final product.  The almost complete apartment building had 
relatively spacious apartments and appeared to be of a high 
standard. 
 
¶5. (U) The group also visited two ethnic Serb returnee beneficiaries 
of the housing care program in the nearby town of Vinkovci. Both 
returnees had lived in their government purchased apartments for 
approximately one year. The apartments appeared to be spacious, of 
high quality, and were located in a mixed-ethnicity apartment block 
in a nice residential neighborhood. The first returnee visited was a 
recently retired grandmother who was very satisfied with her 
apartment and had no complaints about the accommodations, though she 
did seek the Ministry's help to accelerate her son's application for 
housing care. The second returnee was an elderly gentleman who, 
though nostalgic for the pre-war days, was happy with his apartment. 
 His apartment had the same layout as the first but lacked major 
kitchen appliances. He said he could not afford a stove and instead 
used a hot-plate. 
 
¶6. (U) COMMENT: Though possible budget cuts threaten to slow down 
the newly accelerated pace of housing care provision, 2009 
beneficiaries from the Vukovar area do not appear to be at risk. The 
quality of housing care provided continues to be good. Budget issues 
will be one of the primary issues for discussion at the next 
roundtable meeting between the Deputy Prime Minister for Regional 
Development, Reconstruction and Return and Ambassadorial level 
representatives from the EC, OSCE, U.S. Embassy, and UNHCR, 
currently expected to take place within the first two weeks of June. 
 
 
BRADTKE