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Cablegate: Zagreb Daily Report: December 31, 2009

VZCZCXRO8939
PP RUEHIK
DE RUEHVB #0775 3651226
ZNR UUUUU ZZH
P 311226Z DEC 09
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 9778
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

UNCLAS ZAGREB 000775

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL KCOR HR
SUBJECT: ZAGREB DAILY REPORT: DECEMBER 31, 2009

1. (U) GoC DECIDES PROVIDE CROATIAN VERSION OF EU acquis
communautaire TO INTERESTED NEIGHBORS: The GoC decided on
December 30 to make available the Croatian translation of the
European Union's acquis communautaire to interested countries
in Southeast Europe. (SEE SEPTEL FOR DETAILS).

2. (U) ANOTHER CORRUPTION CASE: CROATIAN POSTAL BANK (HPB)
MANAGERS ARRESTED IN ZAGREB: Croatian authorities detained
six individuals, including two former members of the
management board for the State-owned Croatian Postal Bank
(HPB) December 30 on charges related to the misappropriation
of up to $250 million from the HPB. A seventh suspect, the
former head of HPB, is expected to be detained when (or if)
he returns from a ski vacation in Austria. Authorities
believe the suspects received or arranged huge loans from HPB
outside of proper procedures. The Croatian National Bank
(HNB) issued a statement in reaction to the arrests,
partially absolving the current management from suspicions
that the poor business practices of the former managers still
continue at HPB. According to a HPB statement, after the
detained managers left the bank last summer, the current
management board 'cleaned up' the loan portfolio, introduced
greater transparent loan-granting procedures and improved
cost controls.

3. (U) BANDIC, JOSIPOVIC SQUARE OFF IN TV DEBATE; EARLY POLLS
FAVOR JOSIPOVIC: Croatians were treated December 30 to
back-to-back TV debates - on public broadcaster HRT1 and on
private NovaTV - between Social Democratic Party (SDP)
candidate Ivo Josipovic and independent candidate Milan
Bandic. While the debates seem to be judged more or less as
a draw, the starkly differing styles of the two candidates
were on full display, which Bandic summoned up by saying that
Josipovic's experience comes "from a book and mine from
life." Josipovic, true to form, lectured Bandic on several
occasions regarding the legal specifics of the role of the
president and argued Bandic was incapable - insinuating that
Bandic is corrupt- of fighting corruption. Bandic, for his
part, emphasized his faith and hard work for ordinary
citizens, while attacking Josipovic for being a pawn of the
SDP leadership. Meanwhile, Promocija-Plus conducted a
telephone poll of 1500 respondents after the first election
round and gave Josipovic a sold lead. Josipovic received the
support of 53.5% of the respondents, while Bandic received
only 33.7% support with roughly 13% still undecided.

4. (U) VETERANS GROUPS SPLITTING VOTE; BANDIC SECURES VOTE OF
BOSNIAN CROATS: Veterans' organizations - a sizable
constituency in country with over 400,000 registered vets --
are generally backing independent candidate Milan Bandic,
with several associations in Zagreb and Vukovar expressing
their support of Bandic. Josipovic's campaign, however,
announced endorsement of his candidacy by a group of 17
prominent war veterans, including (somewhat incongruously)
ICTY indictee generals Rahim Ademiand Tihomir Blaskic.
Meanwhile, Bandic, as expected gained the public support of
the main Croatian parties in Bosnia-Hercegovina, the Croatian
Democratic Union of Bosnia-Hercegovina (HDZ-BiH) and the HDZ
1990. (NOTE: The ruling HDZ in Croatia publicly stated it
will not support either candidate.) In its press release,
the HDZ 1990 said Bandic's platform clearly stated his
positions on Bosnia-Hercegovina and the position of Bosnian
Croats. explaining that "he publicly pushed for ensuring
their institutional equality, which we consider significant
in light of the necessary constitutional reforms."
WALKER

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