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UNCLAS SECTION 01 OF 02 ZAGREB 000645 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PREF HR
SUBJECT: ZAGREB WEEKLY REPORT - OCTOBER 31, 2009 
 
ZAGREB 00000645  001.2 OF 002 
 
 
¶1. (U) GOVERNMENT SETS DATE FOR PRESIDENTIAL ELECTIONS: 
The Government announced on October 30 that it has set the 
date for Croatia's upcoming Presidential election.  The first 
round will be held on December 27, 2009.  A second round, if 
necessary which is likely) will be held on January 10, 2010. 
(RHoltzapple) 
 
¶2. (U) PODRAVKA SCANDAL SINKS DIRECTORS AND SNARES ECON 
MINISTER: 
Six people, including former and current executives of top 
Croatian food group Podravka, were arrested October 21 on 
suspicion of illegal share purchasing, according to Croatian 
media.  The suspects are believed to have planned to purchase 
Podravka shares through the Fima Grupa, a Croatian brokerage, 
and through Split-based food processor SMS.  In the wake of 
the scandal, on October 30, Deputy PM and Minister of the 
Economy Damir Polancec -- a former executive at Podravka -- 
resigned.  Local media speculate that he will be implicated 
in the alleged malfeasance.  The Zagreb Stock Exchange did 
not suspend trading of Podravka shares following the news of 
the arrests last week but placed the company on a monitoring 
list and reported a 1.5 percent decline in stock price after 
the news of the arrests.  Podravka is 26.5 percent owned by 
the Croatian government, and Prime Minister Jadranka Kosor 
recently appointed opposition SDP MP Ljubo Jurcic as chairman 
of Podravka,s supervisory board following the news of 
suspected fraud.  (TBullock) 
 
¶3. (U) DEPUTY PM ADLESIC APOLOGIZES FOR HOOLIGAN INCIDENT IN 
VARAZDIN: 
The Croatian press reported that Deputy Prime Minister 
Djurdja Adlesic in Belgrade on Oct. 19, apologized for racist 
chants against the Serbian side made by the crowd in Varazdin 
during a youth tournament football game on October 13.  PM 
Kosor and other leading politicians in Croatia also condemned 
the incident shortly after it occurred. Adlesic noted that 
the government was working on ideas to better prevent 
violence and other forms of racial intolerance at sporting 
events. Deputy PM Slobodan Uzelac raised the issue in a 
courtesy call meeting with Ambassador Foley on October 26 as 
evidence that Serbs still face challenges reintegrating into 
society in Croatia.  However, he praised PM Kosor for her 
quick condemnation of the incident and said the high-level 
government response was very positive.  (PD'Amico) 
 
¶4. (U) MFA SEEKS TO BOOST CROATIAN INVESTMENT IN IRAQ: 
The Ministry of Foreign Affairs, led by the chief of the 
Croatian Mission in Iraq, Jerko Vukas, announced plans in 
late October to organize a meeting for Croatian construction 
companies interested in working in Iraq, though no date was 
specified.  Vukas reported that Croatian companies were 
missing an opportunity and should take advantage of old 
contacts established when Croatia was part of Yugoslavia. 
The meeting will inform companies about the political and 
security situation, legal regulations, the banking system, 
licensing, etc.  The MFA also plans to organize an economic 
forum next spring and will invite approximately 100 Iraqi 
companies to participate. (NCallahan) 
 
¶5. (U) GERMAN FIRM PULLS OUT OF CROATIAN LNG PROJECT: 
RWE, Europe's fifth largest utility, announced on October 20 
that it would withdraw from the Adria LNG consortium's 
project to build a facility for liquefied natural gas (LNG) 
conversion on the Croatian island of Krk.  RWE said it 
withdrew from the consortium in order to pursue LNG 
exploration in Northern Europe, and planned to offer its 17 
percent share of Adria LNG to the other shareholders. The 
consortium expects to obtain the necessary permits from 
Croatian authorities during the first quarter of 2010, the 
Adria LNG consortium said in a 20 October press statement, 
and claimed RWE's withdrawal will not endanger the project. 
According to Croatian media, three Croatian utility companies 
(INA, INA.ZA, and HEP) and gas pipeline operator Plinacro are 
expected to join the $1.2 billion project soon.  Should these 
firms take over RWE,s shares, Croatian firms would have 
approximately a 25 percent stake in the Adria LNG consortium. 
(DMatijas) 
 
¶6. (U) FINMIN SEARCHING FOR BOND BUYERS IN US AND EUROPE: 
Finance Minister Ivan Suker this week led a Croatian 
delegation seeking buyers for approximately $750 million in 
GoC bonds, according to the Ministry of Finance.  Suker 
presented the GoC bonds to investors in London, Luxembourg, 
Boston, New York, and San Francisco, and hoped to attract 
buyers with an interest rate of 6 percent.  Local media 
reported on October 30 that Suker had found strong demand for 
Croatian bonds.  He was reported to have placed nearly $1.5 
billion worth of Croatian bonds in America, but he did so at 
an interest rate of 6.75%. (septel) (TBullock) 
 
¶7. (U) AMB. FOLEY VISITS KNIN, MEETS MAYOR AND SERB RETURNEES: 
 
ZAGREB 00000645  002.2 OF 002 
 
 
Ambassador Foley attended a ceremony at the Knin Hospital on 
29 October recognizing the several hundred thousand dollar 
renovation project completed earlier in the year by US 
Airmen.  During the ceremony, the Ambassador announced that 
US European Command would donate an additional $50,000 for 
the purchase of two new incubators for the pediatric wing of 
the hospital.  The Ambassador also met with Mayor of Knin 
Josipa Rimac for a discussion that focused on improving 
inter-ethnic relations and ongoing efforts to bolster the 
area's economy.  Finally, Ambassador Foley met with Serb 
returnees who are having their damaged home rebuilt under 
Croatia's housing care program for returnees.  The Serb 
returnees' story attests to the efforts of the GoC to 
implement its housing program, but also highlighted the 
significant gap between the GoC's "approval" of a returnee's 
application for housing assistance and the actual completion 
of construction.  The house will likely not be finished 
before the winter, and thus will not be ready for the family 
to move in until the spring of 2010.  (DMeges) 
 
¶8. (U) TED TALKS AT AMERICAN CORNER DRAWS LARGE AUDIENCE: 
The monthly U.S. embassy "TED Talk" attracted an audience of 
70 young and innovative Croatians to the American Corner in 
Zagreb on October 27. Croatian psychologist and author Dr. 
Mirjana Krizmanic and moderator Ms Nevena Crljenko from the 
Academy for Political Development discussed Alain de Botton's 
notions of success, failure, snobbery and meritocracy.  De 
Botton's questioning of whether success and failure are 
always earned spurred a lively discussion among young 
professionals in the audience about Croatian society, 
government accountability and true happiness. TED 
(Technology, Entertainment, Design) is an annual conference 
in the United States that defines its mission as "ideas worth 
spreading". These lectures ("TED Talks") are available 
on-line at www.ted.com.   This exciting and dynamic new tool 
in our outreach program engages Croatians from different 
fields, helps connect them to other embassy programs, and 
establishes a positive connection with the United States. It 
also spreads the ideas from the TED videos we select, in this 
case spreading the idea that a government's success should be 
measured by merit. (MCrnjakovic/BPost) 
 
¶9. (U) LIBRARY OUTREACH IN SLAVONIA: 
The APAO and IRC Director traveled to eastern Slavonia, 
visiting three public libraries in Drenovci, Zupanja, and 
Vinkovci, small cities with which we have had little previous 
contact. In each library, we presented a collection of 
children's books from the Sabre Foundation, International 
Information Program (IIP) products, and books donated by the 
Embassy community through the CLO office.  Children's books 
in English are prized in small communities. At each location 
we received a tour and discussed Embassy programs and ways to 
collaborate.  While in Drenovci, the APAO also met with the 
Deputy Mayor. This program is part of an ongoing library 
outreach program in which the public affairs office has 
visited 30 libraries, mainly in economically challenged areas 
of the country. The visits have extended the reach of the 
embassy into smaller communities, generating speaker requests 
and embassy visits. (KWetzel) 
 
¶10. (U) PRESENTATION ON PRESIDENT OBAMA IN NORTHERN CROATIA: 
The APAO spoke about President Obama to 50 high school 
students at the public library in Koprivnica, a city of 
30,000 located near the Hungarian border, in late October. 
Students from both the comprehensive and vocational high 
school attended.  Using a power point presentation and a film 
clip from the President's historic speech at the 2004 
Democratic National Convention, the APAO emphasized elements 
of the President's extraordinary life story, discussing 
democracy, race and the American dream.  The APAO also 
presented the Director of the Library with a projector which 
could be used for future lectures.  Local television and 
newspapers covered the presentation.  The speech engaged high 
school students in a discussion of U.S. society, drawing upon 
the President's broad popularity among young people and 
strengthened the Mission's presence in northern Croatia. 
(KWetzel) 
FOLEY