THE WHITE HOUSE

Office of the Press Secretary

                       PRESS BACKGROUND BRIEFING
                                   ON
                  THE PRESIDENT'S MEETING WITH CROATIA
         PRESIDENT STJEPAN MESIC AND PRIME MINISTER IVICA RACAN

The James S. Brady Briefing Room

6:35 P.M. EDT

MR. CROWLEY: Okay. This evening the President had a meeting with two new leaders from the Republic of Croatia, President Stjepan Mesic and Prime Minister Ivica Racan. Here to give you a read out of that meeting, that lasted about 45 minutes, is a Senior Administration Official who works our policy in the Balkan area; so we'll use our Senior Administration Official.

SENIOR ADMINISTRATION OFFICIAL: Thank yo. As you know, over the last six months the President and the Prime Minister of Croatia, within a coalition of six parties, have taken that country and have moved it at a breathtaking pace away from the authoritarianism of the Tudjman era and towards democracy and towards Europe.

And this meeting took place very much in the context of this remarkable development within Croatia. And the President began by very much welcoming this as a very positive event in the relationship between the United States and Croatia. He specifically welcomed the new direction that the new government is taking Croatia, moving the country to Europe, moving the country towards NATO.

And he told the Prime Minister and the President that Croatia's success will help its own people and will also benefit the region.

Some of the specific points that the President made: he praised the democratic reforms they have put in place over the last six months, while also encouraging them to continue implementing the tough, but necessary, economic reforms.

He applauded the new constructive role that Croatia is taking in the region, including in Bosnia and Herzegovina, where the government has been urging the Croat minority to participate fully in implementation of the Dayton peace agreement. He applauded Croatian support for President Djukanovic with Montenegro, and also their support for bringing democracy into Serbia.

As a show of confidence to the new government, the President announced -- he informed the Prime Minister and President of three packages of assistance. First, $21 million in assistance from the recent supplemental approved by Congress. Secondly, $4.5 million to reconstruct houses for refugee returns. And, third, $4 million for foreign military financing, now that Croatia is a member of the Partnership For Peace.

The $4.5 million for reconstructing housing, in a way, is perhaps the most significant, because Croatia has been allowing and encouraging Serbs who were evicted from Croatia to come back. And one of the great constraints in doing that is the availability of housing. So we will help Croatia provide the housing for those returns to take place.

Some of the key points that were made by President Mesic and Prime Minister Racan: first, they talked about their goals of achieving economic reform and encouraging additional investment in their country. They talked about their desire to move closer to Europe, to move closer to NATO, to achieve compatibility with NATO armed forces. They talked about their desire for democracy in Serbia, and for Serbia to take its rightful place within Europe. They talked about their efforts to return minority Serbs to Croatia.

If I might sort of add an editorial comment that perhaps puts this visit in context. There are many elections that are going to take place this fall in southeast Europe. Of those elections, one is taking place in a place where there is a fledgling democracy, and that's Bosnia. One is taking place where the international community is trying to build democracy, and that's Kosovo. And a third is taking place in a -- where democratic forces are under attack from the regime, and that's Serbia.

And I think from our perspective the breathtaking developments in Croatia should give hope to people who are participating in each one of these elections. Because what it shows is that it shows that if popular will defeats authoritarianism and hard-line nationalism, the road to Europe, the road to prosperity and the road to peaceful democracy is open.

I'll take any questions.

     Q    After the $4.5 million, did you say, was it $4 million?
     SENIOR ADMINISTRATION OFFICIAL:  It's $4 million for foreign

military financing.

Q And can you explain what that would go for?

SENIOR ADMINISTRATION OFFICIAL: You'd have to go to DOD for specifics. There are a number of things that the Croatians want to do with the military forces. The Department of Defense has sent a defense assessment team to Croatia to look at how best it can restructure and modernize its armed forces. And that money will be committed in the context of not only the restructuring, but also training and so forth to really implement Croatia's entry into Partnership For Peace.

Q And the $21 million was for what, again?

SENIOR ADMINISTRATION OFFICIAL: $21 million is additional seed money, which is also largely for reconstruction. But it's also for things like small and medium business development, democratization efforts, development of civil society.

Q I'm wondering if you could be a little more precise about the talks on NATO and if the President has entertained the idea of a quicker membership to NATO?

SENIOR ADMINISTRATION OFFICIAL: That wasn't discussed. I mean, what the Croatia President and Prime Minister talked about is their being pleased that U.S. had supported Croatia's entry into Partnership For Peace and their desire for additional compatibility to work close with NATO.

Q Did the President ask them about Milosevic, specifically, on what they thought about him and how best to try and help the democracy forces there?

SENIOR ADMINISTRATION OFFICIAL: They talked about Milosevic, they talked about the political opposition within Serbia. The President and the Prime Minister both made the point that Croatia had the vital interest in democratic neighbors, including a democratic Serbia. And they talked about what efforts Croatia has been making to help develop civil society within Serbia, for example, working with NGOs.

I think another important point that the Prime Minister made was that, sort of based upon the experience of Croatia, it was important for the political opposition within Serbia not just to be an anti-Milosevic force, but to do what their coalition did during the Croatian elections, and that's to project a different image for the country, an image which is one of cooperation with the international community, which is one of integration into Europe and which is one of cooperation with neighboring countries.

Q Was he saying they were actually doing that? Or they weren't really?

SENIOR ADMINISTRATION OFFICIAL: They were saying that's what their view of the political opposition needs to put forward a platform like that.

Q What is Croatia, if anything, doing to sort of help prop up the opposition movement in Serbia?

SENIOR ADMINISTRATION OFFICIAL: Croatia has been active in working with, first, in hosting meetings of political opposition when they've tried to come together in terms of developing common platforms. They've been working to develop NGOs and so forth. They will participate, probably, in helping to make sure there are international monitors for the elections.

I think the most important thing Croatia has done, though, quite frankly, is serve as a model, serve as an example of the course that Serbia could take if the popular will of the people is listened to and if you have democratic reform within Serbia.

SENIOR ADMINISTRATION OFFICIAL: If I might -- the two individuals are different parties, and they've built a coalition of six different parties as a way of uniting them.

SENIOR ADMINISTRATION OFFICIAL: And there is a model there. They both are from different parties. Their coalition is the six parties. They were able to come together around this new image of Croatia, which was one of cooperation, which offered a very different type of image than, obviously, President Tudjman had before.

Q You said that the first financial package that would be offered to Croatia was $21 million? Is that correct?

SENIOR ADMINISTRATION OFFICIAL: Yes. Actually, we have substantially increased assistance since the new government has come in. This was announcing a different -- an additional increment of assistance that comes out of the supplemental that was just passed by Congress.

Q What will be the use for that package?

SENIOR ADMINISTRATION OFFICIAL: That's the package I mentioned before of largely seed money, which will go for some reconstruction, a lot of small and medium business development, democratization and civil society projects.

Q The $4.5 million and $4 million each, do they have to be approved by Congress, or is this money that has already been approved in last year's budget?

SENIOR ADMINISTRATION OFFICIAL: This is money that's already approved.

Q Did the President express any views about the planned EU summit in Zagreb?

SENIOR ADMINISTRATION OFFICIAL: No, he didn't. That was mentioned, the fact that this EU summit was going to take place. The President listened with interest to it, but didn't comment on it.

Q Thanks.

END 6:45 P.M. EDT