VZCZCXRO8169
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHBW #0274/01 0501753
ZNR UUUUU ZZH
R 191752Z FEB 10
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC 0817
INFO EUROPEAN POLITICAL COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 03 BELGRADE 000274 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON PREL EINV TSPL SR
SUBJECT: Serbian Deputy Prime Minister Djelic Talks Kosovo to 
Competitiveness in Ambassador's Introductory Call 
 
REF: BELGRADE 172 
 
Summary 
 
------------- 
 
 
 
¶1.  (SBU) Deputy Prime Minister and Minister of Science and 
Technology Djelic told the Ambassador that Serbia sought a more 
"balanced" solution for Kosovo, otherwise Serbia would be isolated 
from the EU and would not advance toward Europe.   Djelic thanked 
the United States for supporting Serbia's progress toward EU 
accession in late 2009 and outlined an ambitious goal of achieving 
EU candidate status in 2010.  With regard to his S&T portfolio, 
Djelic said he hoped to sign a bilateral S&T cooperation agreement 
in the United States in April and would be reinvigorating Serbia's 
scientific research with a forthcoming government approved strategy 
and new financing.  End Summary. 
 
 
 
Kosovo Dominates Initial Discussion 
 
--------------------------------------------- -- 
 
 
 
¶2.   (SBU) In his February 17 introductory meeting with Ambassador 
Warlick, Deputy Prime Minister for EU Integration and Minister of 
Science and Technology Bozidar Djelic opened with a long discussion 
of Kosovo.  Djelic said that he was not a policy maker on Kosovo, 
but rather a policy taker and policy influencer on the issue. 
However, he highlighted the importance of Kosovo to Serbia's EU 
accession process and said the Cyprus example meant that EU members 
would not allow Serbia to join the EU without resolving Kosovo 
issues.  Djelic said that no Serbian politician would recognize 
Kosovo in order to open Serbia's EU path.  Djelic was heartened by 
the fact that there was not a singular European position on Kosovo 
and that even recognizing countries were asking the Serbian 
government about solutions for Kosovo.  He said that during Belgian 
Prime Minister Leterme's visit to Belgrade that day, Leterme had 
asked President Tadic  to describe Serbia's legal outline for a 
status solution.  Djelic said a "more balanced" solution was 
necessary, and that the international community could do better 
than a solution that was "pushed down the throat of Serbia." 
Djelic made a point of saying that he had family ties to Kosovo and 
that he spoke privately at international meetings with Kosovo 
Finance and Economy Minister Ahmet Shala. 
 
 
 
¶3.  (SBU) Djelic repeated the newly deployed core Serbian 
government talking point that Belgrade recognized that Serbia could 
not govern Kosovo Albanians, but Pristina must also recognize that 
it could not govern Kosovo Serbs in the north.  Djelic also 
repeated that Serbia would use only legal and diplomatic means and 
be "predictable" in its actions regarding Kosovo.  He said that the 
government would not manipulate the situation in Kosovo and would 
continue to fight organized crime and remove or isolate extremists. 
He mentioned Bosnia as an example of a balanced compromise, but 
would not be drawn out on this point. 
 
 
 
¶4.   (SBU) The Ambassador responded firmly that the United States 
and several of our European partners had just made clear to the 
government in coordinated messages that Kosovo status was settled 
and that Kosovo's sovereignty and territorial integrity were not up 
for discussion.  She added that we wanted to hear Serbia's 
proposals for improving the lives of those in Kosovo and ideas 
about a way forward following the International Court of Justice 
(ICJ) opinion on Kosovo's independence declaration.  The Ambassador 
pointed to Vice President Biden's statement in Belgrade in May 2009 
that we would agree to disagree on Kosovo, but needed to cooperate 
on practical issues and deepen our bilateral relations in other 
spheres. 
 
 
 
Goal for EU Path: Candidate Status in 2010 
 
--------------------------------------------- ----------- 
 
BELGRADE 00000274  002 OF 003 
 
 
¶5.  (SBU) Djelic's thanked the Ambassador for U.S. support with 
European leaders to advance Serbia's EU accession process at the 
end of 2009.  Djelic said the first review of the Interim Trade 
Agreement by the European Commission would be in Belgrade on March 
¶2.  Djelic outlined Serbia's next steps with the EU following the 
upcoming June report from ICTY prosecutor Brammertz.  Djelic said 
that his recent three hour meeting with new EU Enlargement 
Commissioner Fule had gone well.  He said that Albania and 
Montenegro had given Serbia had copies of their EU application 
questionnaires and Serbia would use them to draft answers in 
advance of receiving their own questionnaire from the Commission. 
Djelic's ambitious scenario was to receive the questionnaire 
officially in June and then return it with answers "before the 
summer," with the goal of candidate status by the end of 2010. 
Djelic said that he had tasked all Serbian ministries to prepare 
draft answers to the questionnaire by the end of April. 
 
 
 
¶6.  (SBU) Djelic acknowledged that Serbia faced challenges with 
Germany, France and the Netherlands to move ahead with ratification 
of Serbia's Stabilization and Association Agreement (SAA) in June. 
He expressed concern that some voices were suggesting that Serbia's 
EU path should be conditioned on Serbian cooperation in Bosnia and 
Kosovo.  Djelic argued this would be counterproductive as it 
empowered radical elements in Bosnia to halt Serbia's EU accession. 
Djelic said that Serbia's goals were to achieve candidate status by 
the end of 2010 and open negotiations on membership in 2012, just 
before the government would have to call new parliamentary 
elections. 
 
 
 
Science and Technology 
 
-------------------------------- 
 
 
 
¶7.  (SBU) Speaking about his science and technology portfolio, 
Djelic said the Ministry would soon respond to the bilateral S&T 
agreement language that the Embassy passed to the Ministry in early 
February.  His goal was to have Serbian government approval for the 
agreement so that he could sign it in the United States during his 
planned visit ahead of the spring World Bank/IMF meetings April 
25-26.  Djelic said the government would approve a science and 
technology strategy soon.  In addition, Djelic planned to sign an 
agreement on March 4 with the European Investment Bank for $275 
million in financing for science infrastructure.  He was also 
interested in supporting technology start up firms with a $135 
million regional technology fund that would include funding from 
the EU, countries in the region, international financial 
institutions and others.  Djelic said he had spoken with George 
Soros and that Soros was willing to contribute $13 million once the 
fund was launched.  The Ambassador noted U.S. Serbian cooperation 
at the Vinca nuclear research facility as an example of our 
positive cooperation.  Djelic responded that Serbia appreciated 
U.S. assistance on nuclear issues and that Serbia would be a 
partner on IAEA issues this year, alluding to past issues of 
support for Iran in return for Iranian support for Serbia on 
Kosovo. 
 
 
 
Economy Woes 
 
--------------------- 
 
 
 
¶8.  (SBU) Djelic moved to a discussion of the economic challenges 
the government faced in recovering from the financial crisis.  He 
said that Serbia had chosen to go to the IMF early, well ahead of 
its neighbors, and had managed to stabilize the dinar, but this had 
come with a cost.  The IMF had mandated pension and wage freezes 
that had eroded average Serbian purchasing power by 30%.   The 
government needed to lift these freezes, Djelic said, in order to 
keep from slipping in the polls.  Striking a similar theme as PM 
Cvetkovic in his introductory meeting with the Ambassador (reftel), 
Djelic said that Serbia's ratings from the international credit 
rating agencies were too low and because of Serbia's history were 
rated on par with much smaller and less developed economies. 
Djelic was optimistic, however, as Serbia's rating with two 
agencies had shifted from negative to neutral even with the 
 
BELGRADE 00000274  003 OF 003 
 
 
financial crisis.  Djelic thanked the United States for assistance 
to Serbia's Competitiveness Council, which he chairs, and for the 
positive role of U.S. investors like U.S. Steel, Ball Packaging and 
Microsoft. 
 
 
 
Regional Partnership Opportunities 
 
--------------------------------------------- ---- 
 
 
 
¶9.  (SBU) Djelic outlined three areas where Serbia hoped to build 
regional cooperation.  He said that Serbia was lobbying to host the 
secretariat for the South East Europe Transport Observatory (SEETO) 
in competition with Tirana.  According to Djelic, Serbia would like 
to become an active participant in a regional Danube strategy to 
build on the transport and tourism potential of the river.  He also 
said that the countries in the region needed to resolve refugee and 
internally displaced persons issues.   Spain, in its EU Presidency 
role, was working on this issue and Djelic hoped that a conference 
on refugees would happen in March. 
 
 
 
Comment 
 
------------- 
 
 
 
¶10.  (SBU) Djelic has rarely discussed Kosovo publicly in the past, 
leaving the issue to others.  In recent press appearances, Djelic 
has begun using language on Kosovo that comes straight from Foreign 
Minister Jeremic's playbook.  Like others in the Serbian 
government, the candid private words from several EU members that 
Serbia will not be able to join the EU without a modus vivendi with 
Kosovo has gotten Djelic's attention.  Djelic spent a significant 
portion of his initial meeting with the Ambassador focusing on an 
issue he admitted was outside of his portfolio, but which he 
clearly recognizes threatens the ambitious EU agenda that is at the 
heart of the government's plans for maintaining public support and 
eventual reelection.  The key question, of course, is how the 
Serbian government itself chooses to manage its policy toward 
Kosovo going forward.  End Comment. 
WARLICK