VZCZCXRO3149
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHPOD #0137/01 1591325
ZNR UUUUU ZZH
P 081325Z JUN 09
FM AMEMBASSY PODGORICA
TO RUEHC/SECSTATE WASHDC PRIORITY 1339
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHPOD/AMEMBASSY PODGORICA 1428

UNCLAS SECTION 01 OF 03 PODGORICA 000137 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL MW
SUBJECT: DELAY IN GOVERNMENT FORMATION HIGHLIGHTS TENSION WITHIN 
RULING PARTY 
 
PODGORICA 00000137  001.2 OF 003 
 
 
¶1. (SBU) SUMMARY:  Montenegro's long-running government 
formation saga appears to be in its final stages, with a new GoM 
likely to be appointed this week.  The delay - after March 29 
parliamentary elections resulted in a landslide victory for the 
ruling coalition - appears to be linked to the desire of ruling 
Democratic Party of Socialists (DPS) heavyweight Svetozar 
Marovic to return to the GoM as PM Milo Djukanovic's principal 
DPM, a move that would demote Finance Minister and Djukanovic 
favorite (and anointed successor) Igor Luksic.  Djukanovic 
reportedly has compromised by proposing both Marovic and Luksic 
as DPMs on equal footing, but this debate highlights internal 
tensions within the DPS which are likely to continue.  END 
SUMMARY. 
 
 
 
New GoM? 
 
-------- 
 
 
 
¶2.  (SBU) Montenegrin press and a number of our high-level 
contacts are reporting that PM-designate Djukanovic will present 
his program and Cabinet to Parliament for approval on June 9. 
This follows a June 4 meeting of the Presidency of the ruling 
Democratic Party of Socialists (DPS), which blessed Djukanovic's 
proposals (the party's Main Board is supposed to provide the 
final stamp of approval on June 8).  The DPS will now divvy up 
GoM and parliamentary positions with its coalition partners - 
the Social Democratic Party (SDP), the Bosniak Party (BS), and 
the small Croatian Civic Initiative (HGI) - in advance of the 
parliamentary vote.  (Note:  The new GoM and its program must be 
supported by a majority of MPs; the coalition controls 48 seats 
in the 81-MP Parliament, assuring easy approval.) 
 
 
 
Delay Breeds Frustration 
 
------------------------ 
 
 
 
¶3. (U) Parliamentary elections were held on March 29.  The 
victorious coalition curtailed the initial April 23 Parliament 
session due a disagreement over Deputy Speaker positions, but 
regrouped on May 6 to re-elect SDP leader Ranko Krivokapic as 
Speaker (the coalition decided to resolve the Deputy Speaker 
issue a part of a package with the new GoM).  The following day 
President Vujanovic nominated then-PM Djukanovic for a sixth 
term as GoM head. 
 
 
 
¶4. (SBU) At that point, however, the government formation 
process ground to a halt.  While coalition and DPS loyalists 
have assured us that it is "business as usual" at various 
ministries and the GoM is meeting (in an acting capacity) 
regularly, we sense a palpable frustration with the delay. 
Ministry contacts complain that decisions are not being taken 
because of uncertainty over their organization's leadership, for 
example, and even contacts in the SDP and BS have grumbled to us 
about the wait, the responsibility for which they place squarely 
with the DPS. 
 
 
 
Behind the Scenes at DPS 
 
------------------------ 
 
 
 
¶5. (SBU) The press has speculated that the leading cause for the 
delay has been internal DPS wrangling over the possible return 
of party VP and former Serbia/Montenegro State Union president 
Svetozar Marovic to the GoM.  Specifically, Marovic, who has 
been engaged in lucrative private business ventures in his 
native Budva since 2006, reportedly wanted to come back as the 
only Deputy Prime Minister (or First Deputy Prime Minister), 
responsible for political affairs.  Also, according to the 
rumors, Marovic would bring several loyalists with him into key 
GoM positions. 
 
 
 
¶6. (SBU) Marovic's proposal would, however, mean a demotion of 
current DPM and Minister of Finance - and Djukanovic favorite - 
Igor Luksic.  (Note: the previous GoM had three DPMs - Luksic, 
DPM for Economic Policy Vujica Lazovic, and DPM for European 
 
PODGORICA 00000137  002.2 OF 003 
 
 
Integration Gordana Djurovic.)  According to the rumors, 
Djukanovic, who has tabbed Luksic as his likely successor, 
resisted, while Marovic gained the support of President 
Vujanovic and some other senior DPS leaders.  (Note:  It was 
widely reported that Vujanovic, Marovic, and others opposed 
Djukanovic's attempt to install Luksic as PM when Djukanovic 
resigned in September 2006.  Luksic's opponents argued that the 
Finance Minister, then only 30, was unseasoned; Zeljko 
Sturanovic was then elected to replace Djukanovic.) 
 
 
 
Something to the Rumors? 
 
------------------------ 
 
 
 
¶7. (SBU) A well-placed DPS official confirmed to us June 2 that 
the media speculation regarding Marovic and Luksic was correct 
in basic details, although exaggerated in its description of the 
tension within the party.  The DPS' public line was that 
Djukanovic's "busy schedule" was the primary reason for the 
delay in forming the government.  Our interlocutor confided 
that, immediately following the election, Djukanovic told a 
small group of DPS leaders that he intended to step down in 
favour of Luksic.  Over the course of a week, the group 
persuaded him to stay on, arguing that while Luksic could be PM 
in a future government, Montenegro needed stability and 
Djukanovic's "charisma" in the face of the global economic 
crisis.  Moreover, they asserted, the voters expected Djukanovic 
to stay at the helm. 
 
 
 
¶8. (SBU) Our contact said that Djukanovic initially did not want 
to make major changes in the government.  The PM told the press 
on May 21 that there would be "no significant personnel 
changes," but later backtracked to deal with the thorny question 
of Marovic's influence in the party.  According to our source, 
there was some resistance to Marovic's return because of his 
"involvement and success in private business," but in general 
party faithful agreed that it was "a waste" not to utilize the 
talents of the powerful party Vice President. 
 
 
 
¶9. (SBU) Our contact also confirmed press reports that the DPS's 
2011 congress could result in a makeover of the party hierarchy. 
 It was "very possible" that Djukanovic would step down if the 
financial situation had stabilized, he said, making way for "new 
leaders and the renewal of the party." 
 
 
 
DPS Presidency:  Marovic and Luksic as DPMs? 
 
-------------------------------------------- 
 
 
 
¶10. (U) Media reported on June 5 that the DPS Presidency had the 
previous evening approved Djukanovic's proposal to appoint both 
Marovic and Luksic as Deputy Prime Ministers.  The two would be 
on equal footing, with Marovic responsible for political affairs 
and Luksic for finance.  (Note:  Vujica Lazovic also will 
presumably remain a DPM, since his position belongs to the SDP. 
SDP contacts have told us that they expect to retain the same 
ministries in the new GoM.)  Final allocation of other 
ministries will reportedly be approved by the DPS Main Board on 
June 8.  (Note:  The press has reported that some ministries - 
such as the Ministry of Health and Labor, the Ministry of 
Tourism and Environment, and the Ministry of Economic 
Development - could be divided, although our DPS contact told us 
June 2 that this was unlikely, and a number of new names have 
been bandied about to head various ministries.) 
 
 
 
Comment 
 
------- 
 
 
 
¶11. (SBU) The delay in the GoM's formation suggests that while 
Djukanovic is the preeminent authority in the DPS, he must take 
into account Marovic's influence within the party and strong 
base of support in the coastal boomtown of Budva.  Djukanovic 
has made clear his desire to hand the reins of power to Luksic, 
but it remains to be seen whether Luksic (who recently 
 
PODGORICA 00000137  003.2 OF 003 
 
 
criticized Budva municipality finances) will face continued 
resistance from Marovic and other senior DPS officials in the 
run-up to the DPS's 2011 congress. 
 
 
 
¶12. (SBU) Marovic is a public advocate of Montenegro's 
Euro-Atlantic integration and there is no real daylight between 
him and PM Djukanovic in terms of the country's foreign policy 
goals.  Although Marovic will reportedly be responsible for 
political affairs, several of our non-DPS interlocutors predict 
he will attempt to influence the economic ministries, 
particularly the Ministry of Economic Development, in support of 
his business interests in Budva.  (Note:  Marovic has been 
linked to Russian and other investors in Budva, and in fact was 
partnered with the controversial Moscow-based Mirax Group, which 
is building a large apartment complex on the coast.)  Over time, 
the appearance of such conflicts of interests could detract from 
Montenegro's broader foreign policy goals.  End Comment. 
MOORE