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Cablegate: Convalidation of Pensions in Former Occupied Serb

VZCZCXRO9867
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVB #0411 1551244
ZNR UUUUU ZZH
R 031244Z JUN 08
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 8356
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBW/AMEMBASSY BELGRADE 1986
RUEHLJ/AMEMBASSY LJUBLJANA 6414
RUEHPOD/AMEMBASSY PODGORICA
RUEHVJ/AMEMBASSY SARAJEVO 0285
RUEHTI/AMEMBASSY TIRANA 0831

UNCLAS ZAGREB 000411

SIPDIS
SENSITIVE

DEPT FOR PRM, EUR/SCE AND EUR/RPM, BELGRADE FOR REFCOORD
JIKICH

E.O. 12958: N/A
TAGS: PREF PGOV PREL HR EUC SR
SUBJECT: CONVALIDATION OF PENSIONS IN FORMER OCCUPIED SERB
AREAS OF CROATIA MOVING TOWARD RESOLUTION

REF: ZAGREB 357

1. (U) SUMMARY: Deputy Prime Minister Slobodan Uzelac, the
highest ranking Croatian Serb in the government, appears to
be making some progress toward solving problems related to
the return of Serbs who fled Croatia at the end of the war.
On May 17th, 2008, the Croatian Government published a
Rulebook on the Convalidation of Working Years for pensions
earned between 1991 and 1995 in areas which were not under
Croatian control during the war. This document establishes a
procedure whereby people who worked in the "Republika Srpska
Krajina" during the war can now receive credit for that time
on the job in the calculation of their retirement pensions.
Resolving this "convalidation" issue has been a major
outstanding issue under the so-called Sarajevo Process, and
is also among the opening "benchmarks" sought by the EU prior
to opening negotiations on Chapter 23 (Judiciary and
Fundamental Rights) in Croatia's on-going EU accession
negotiations. END SUMMARY.

2. (U) In an April 25th meeting with representatives of the
international community (REFTEL), Uzelac and his Minister of
Regional Development, Forestry and Water Management, Petar
Cobankovic, both promised to resolve this problem quickly and
quietly. The new Rulebook allows for flexible methods for
proving a person's working years/contributions, does not
require applicants to be returnees to exercise this right,
and imposes no further deadlines for applying. The practical
impact of the decision is lessened by the fact that crediting
the time worked towards retirement will mean only a small
increase of under $40 a month to most Serb retirees'
pensions. Nonetheless, the symbolism of this decision is
significant, and the GoC will seek credit for the step with
the international community. The GOC will likely downplay
the step domestically, however, to avoid provoking any
political backlash among the portions of the Croatian public
who still view anyone who participated in the "RSK" in any
fashion as a de facto war criminal. Embassy has seen no
public announcement or media coverage of the step (which is
consistent with Uzelac's desire not to publicize this move --
see reftel).

3. (SBU) While an April 10, 1999 deadline for applying for
convalidation still must be annulled to avoid legal
complications and contradictory instructions, UNHCR has
received assurances from the Ministry of Economy, Labor and
Entrepreneurship that only the Rulebook provisions will be
taken into account in its implementation. Officials were told
that local offices have been instructed to "ignore" the
earlier deadline, which had been introduced by a decree.
UNHCR officials remain cautiously optimistic and are
generally quite pleased with the overall provisions in the
rulebook. Leading Croatian Serb politician Milorad Pupovac
told POLCOUNS on May 30 that he was happy with the new
decision. He said that some details of implementation still
needed to be clarified, but that if the new Rulebook was
properly implemented, then he would consider the
convalidation issue resolved. Internal GOC documents shared
with POLOFF indicate that up to 44,000 requests for
convalidation will be accepted by the GOC. Conservative
estimates from the same anonymous sources estimate that the
GOC will need to allocate approximately 370 million kuna (79
million dollars) from the budget in 2008 and approximately
530 million Kuna (113 million dollars) in subsequent years to
finance anticipated claims.

4. (SBU) COMMENT: We agree with both Pupovac and UNHCR that,
assuming this decision is implemented, the new procedure
means the convalidation issue will be solved. Even if
implementation is messy, which given the frailties of
Croatian public administration it may well be, the new
Rulebook still represents an important political decision for
the GOC. It has put the government on record as recognizing
that employment within the local institutions of the "RSK"
was in some sense legitimate work, even as the "RSK" was in
armed conflict with the Croatian government. As with its
policy of providing housing to Serbs who lost their tenancy
rights during the war, the GoC is gradually, and in as low a
profile manner as it can, seeking to redress the legacy of
population movements from the 1990's war. END COMMENT
Bradtke

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