Clinton offers money, support for Croatia

By Deborah Charles

WASHINGTON, Aug 9 (Reuters) - U.S. President Bill Clinton applauded Croatia's democratic progress in its new government's first six months in office, and offered nearly $30 million in economic assistance, U.S. officials said on Wednesday.

In a 45-minute meeting with Croatian President Stipe Mesic and Prime Minister Ivica Racan, Clinton praised the government that replaced late President Franjo Tudjman's nationalists in January and said it was a good example of how democracy could work in the Balkans.

"Over the last six months, the president and 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 toward democracy and toward Europe," a senior administration official said.

"He (Clinton) told the prime minister and president that Croatia's success will help its own people and will also benefit the region," he said.

During their Oval Office meeting, Clinton also encouraged Mesic and Racan to continue implementing "tough but necessary" economic reforms. Croatia, a nation of about 4.7 million people, seceded from Yugoslavia in 1991.

As a show of confidence in the new government, Clinton offered the Croatian leaders three packages of assistance.

They involved $21 million to help in reconstruction, small- and medium-business development and democratization efforts; $4 million for foreign military financing under the Partnership for Peace; and $4.5 million to reconstruct houses for returning refugees from the 1992-1995 war in the former Yugoslavia.

The official said Mesic and Racan expressed their desire to move closer to Europe and NATO and said they hoped for democratic reform in places like Serbia.

Noting that several elections were coming up later this year in the Balkans, U.S. officials said they hoped Croatia would serve as an example for how democracy could work in the region.

"Of those elections, one is taking 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 (place) where democratic forces are under attack from the regime and that's Serbia," the official said.

During a break in her meetings with the Croatian leadership earlier in the day, Secretary of State Madeleine Albright predicted Yugoslav President Slobodan Milosevic would cheat in next month's election, but said that with motivation, Yugoslavs could still decide their destiny.

Albright said the election scheduled for Sept. 24 would be a chance for Yugoslavia to turn its back on what she called "Milosevic's policies of isolation and ethnic hatred."

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