Cablegate: Gos: Supportive of Relief for Iraq but Stymied By

VZCZCXRO4638
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHLJ #0722 3131238
ZNR UUUUU ZZH
R 091238Z NOV 06
FM AMEMBASSY LJUBLJANA
TO RUEHC/SECSTATE WASHDC 5306
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHGB/AMEMBASSY BAGHDAD 0017
RUEHBW/AMEMBASSY BELGRADE 0226

UNCLAS LJUBLJANA 000722

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN IZ SI
SUBJECT: GOS: SUPPORTIVE OF RELIEF FOR IRAQ BUT STYMIED BY
THE PAST

REF: SECSTATE 181094

1. (U) SUMMARY. The Government of Slovenia (GOS) is
supportive of assistance to Iraq but regional issues prevent
them from making any commitment to providing debt relief.
Most of the debt owed to Slovenia, estimated at $205 million,
was incurred before the breakup of the former Yugoslavia.
Until issues surrounding succession and fiscal apportionment
are resolved amongst the former Yugoslav countries, no
bilateral commitment to debt relief can be made by the GOS.
The GOS could not provide a timeline when they thought
succession talks would conclude. END SUMMARY.

2. (SBU) Econoff delivered demarche on November 8 to MFA
official Blaz Masle. Masle explained that there are several
layers of complications for the GOS regarding debt relief for
Iraq. Because the debt was incurred while Slovenia was still
part of the former Yugoslavia, structural decisions regarding
succession must be determined before other decisions can be
made. The Iraqi debt held by Slovenia was estimated in 1992
to be about $205 million, as claimed by Slovenian
enterprises. The GOS bought debt from the Slovenian companies
who could provide requested documentation. This amount came
to $1 million. The figures are not exact and more efforts
will have to be made to get better data. He said that the GOS
has not made much progress on succession talks so there has
been no serious discourse on debt relief. Finally Masle said
that the issue of succession and Iraqi debt relief is a
multi-ministerial effort and he would share our concerns and
requests with other ministry officials involved in the
decision-making process.

3. (SBU) Embassy Ljubljana contacted Andrej Kavcic, head of
the international department at the Ministry of Finance, for
more information regarding the succession talks and
commitment to Iraqi debt relief. Kavcic explained that the
Coordinating Committee, comprised of the Ministries of
Finance, Justice, Foreign Affairs, Bank of Slovenia and
experts, is responsible for creating a plan for debt relief.
Currently there are two options that are being considered:
either to follow the Paris Club proposal of 80% debt relief
or relieve the debt as commercial debt. Kavcic also
reiterated that nothing could be done on this issue without
proper data and a conclusion to succession talks. He added
that Belgrade's refusal to cooperate on sharing federal data
is hindering progress on succession.

ROBERTSON

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