VZCZCXRO7436
OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK
RUEHYG
DE RUEHVB #0488 2191243
ZNR UUUUU ZZH
O 071243Z AUG 09
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9455
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS ZAGREB 000488 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD EAID PGOV HR
SUBJECT: ZAGREB WEEKLY ACTIVITY REPORT - AUGUST 7 
 
¶1.  (U) SIX SHIPYARDS OFFERED FOR SALE: 
On August 1, the government issued long-awaited tenders for 
six Croatian shipyards.  Among the shipyards up for sale is 
Brodosplit, the largest Croatian shipyard with 4000 
employees.  The contentious process, which has dragged on for 
years, has pitted unions against government efforts to 
satisfy EU demands for privatization of the loss making 
enterprises.  Most of the widely publicized tenders call for 
each shipyard to be sold for one kuna (about 20 cents), with 
the winning bid to be determined by how much debt the bidder 
is willing to assume, and how much they are willing to invest 
in the shipyards' continued operation.  The press has so far 
speculated on only one potential bidder, a relatively unknown 
Croatian mining tycoon who has expressed only nominal 
interest in expanding his investments into shipyards. 
Comment: Long accused of dragging their heels on the 
privatization process due to the sensitive politics of the 
shipbuilding industry, the government is now moving forward 
under the worst possible circumstances.  It is hard to see 
large numbers of potential buyers emerging in the current 
economic climate.  End comment. (DWestfall) 
 
¶2.  (SBU) HDZ,S HEBRANG LAUNCHES PRESIDENTIAL BID: 
A founding member of the Croatian Democratic Union (HDZ), 
Andrija Hebrang formally accepted the HDZ,s nomination to be 
the party's candidate for the Croatian Presidency.  As a 
cancer survivor, Hebrang waited several weeks, pending 
medical tests, before declaring himself fit to accept the 
party's offer made in early July.  Hebrang, long-considered 
by many as the de-facto leader of the nationalist, right-wing 
segment of the HDZ, indicated that his campaign would 
revitalize the role of Homeland War veterans in society and 
the reenergize the memory of the founder of the Croatian 
State and the HDZ party the late Franjo Tudjman.  However, in 
a tacit acknowledgment that to win he would need support from 
more centrist voters, his campaign slogan, "for a European 
and proud Croatia", is a nod toward EU membership and 
compliance with European standards.  This balance of strident 
nationalism and more centrist ideas was highlighted in his 
first major interview for the Rijeka-based Novi List where he 
mentioned his overt support for Bosnian Croat rights but also 
strongly condemned the controversial hyper-nationalistic 
singer Marko Perkovic aka Thompson for shouting fascist 
Ustasha greetings at a recent concert.  (DMeges) 
 
¶3.  (U) JOINT U.S.- CROATIAN GOVERNMENT REGULATORY REFORM 
PROJECT SHUT DOWN: 
The Croatian government project known as HITROREZ (Office for 
Regulatory Impact Assessment), which was established with the 
help of a USAID program in 2006, was shut down by the 
government on July 30.  The project aimed to review and 
potentially eliminate 1451 laws and regulations affecting 
business operations.  The media has called the decision 
evidence of the failure of the HITROREZ program, but HITROREZ 
representatives told post the reason was simply ongoing 
budget cuts.  They added that state administrative offices 
have accepted 501 of the office's recommendations for 
regulatory changes and have implemented 368, or 70 percent of 
them.  (DMatijas) 
WALKER