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Cablegate: Croatian Presidential Hopeful Discusses Economy,

VZCZCXRO9604
OO RUEHIK
DE RUEHVB #0652 3090755
ZNR UUUUU ZZH
O 050755Z NOV 09
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9630
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS ZAGREB 000652

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV HR
SUBJECT: CROATIAN PRESIDENTIAL HOPEFUL DISCUSSES ECONOMY,
BOSNIA

REF: ZAGREB 644

1. (SBU) Summary. In a courtesy call on October 27, Croatian
Chamber of Commerce President and independent presidential
candidate Nadan Vidosevic told the Ambassador that the time
has come to speak of Croatia's future in economic terms. He
said he was uniquely qualified as an economist and
businessman to send the political signals from the top that
would get Croatia moving forward. He spoke positively of
Prime Minister Jadranka Kosor's attempts to stimulate the
economy and fight corruption. On Bosnia, Vidosevic
criticized the U.S. approach on constitutional reform, and
said Bosnia needed an arrangement similar to that of the
Swiss confederation. Such a confederation would include
"units" that resembled the Swiss cantons, rather than
"entities", (implying there should be a Croatian unit as
well). End summary.

2. (U) Nadan Vidosevic, long time head of the Chamber of
Economy (HGK) and CEO of Croatia's largest candy company, was
expelled from the HDZ party this summer after declaring his
candidacy for president, in competition with the HDZ's
official candidate, Andrija Hebrang. He has been an
outspoken critic of government economic policy, stating on
numerous occasions that Croatia faces deep structural
problems that will require a long recovery. Vidosevic is
currently running second in most polls behind SDP candidate
Ivo Josipovic.

3. (U) Vidosevic told the ambassador that his decision to
run was based on his belief that Croatia was at an economic
crossroads, and that having an experienced economist as
president could help guide the country towards creating a
self-sustaining economy. (NOTE: Josipovic is a legal scholar
with no business background.) He praised current Prime
Minister Kosor for doing a good job at stopping what he
called "economic populism", i.e. the constant attempts by
interest groups to squeeze more and more money out of the
budget. But he doesn't think she has done enough to get the
government moving forward on real priorities. He said
corruption continues to be the biggest problem in the
country. He gives Kosor credit for new aggressiveness in
battling corruption, which he described as a chance to change
political values in the country (see reftel for recent
anti-corruption developments).

4. (SBU) On Bosnia, Vidosevic argued the current approach
will not succeed. While he said he understands the United
States' reasons for continuing to support the Dayton
Agreement, he sees success for Bosnia only in a Swiss-type
confederation of "units", not "entities". A new political
arrangement along these lines would work under three
conditions: 1) that international financing be made available
to connect the country's transport infrastructure; 2) that
multi-lateral lenders such as EBRD organize capital for
potential private investors; and 3) that Bosnia receive
support for its technical education system, which suffered
tremendous brain-drain during the war years such that there
is a shortage of a skilled workforce. He believes Tihic,
Covic, and even Dodik (with pressure) are ready to speak
about such possibilities realistically. He told the
ambassador that if elected president, he would immediately go
to Serbia for discussions with Boris Tadic on this issue.
The Ambassador underscored the sharp policy differences
between Vidosevic and the U.S. on Bosnia.

5. (SBU) COMMENT: Vidosevic has a shot at winning the
election, but he has a tough road ahead against Josipovic,
who has the SDP party apparatus behind him, and Zagreb mayor
Milan Bandic, who is a skilled campaigner and reportedly a
close friend of Ninoslav Pavic, owner of Croatia's largest
media conglomerate Europapress Holding. He is clearly
counting on voters to be fed up with Croatia's stagnant
economy, crony capitalism, and the bitter infighting of what
Vidosevic calls Croatia's "Party-ocracy". END COMMENT.
FOLEY

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