GREEKS UNDERSTAND DENUNCIATION UNDESIREABLE, BUT

C O N F I D E N T I A L ATHENS 001294 SIPDIS STATE FOR EB/TRA E.O. 12958: DECL: 05/10/2015 TAGS: EAIR ECON GR BATA SUBJECT: GREEKS UNDERSTAND DENUNCIATION UNDESIREABLE, BUT UNCLEAR ON NEXT STEPS REGARDING BILATERAL AIR TRANSPORT AGREEMENT REF: A. A: ATHENS 1197 ¶B. B: STATE 84836 ¶1. (U) Summary: DCM delivered demarche (reftel B) on May 9, regarding the U.S.-Greece Bilateral Air Transport Agreement (BATA) to MFA Director General of Economics Chrysanthopoulos. Chrysanthopoulos acknowledged that abrogating the BATA with the U.S. would not be desireable, but he reiterated that Greece needed some way to deal with the European Commission (EC). The crucial issue for the Greeks appears to be the EC position that extending the BATA is the same as renegotiating it, thus violating EC regulation 847. DCM suggested that the Greeks discuss this with their EU colleagues to see how other member states are dealing with the Commission. Additionally, DCM proposed that the GoG inform the EC of its intention to extend, not renegotiate, the BATA in July, maintaining the status quo while Washington and Brussels work to resolve their differences. End summary. ¶2. (U) On May 9th, DCM delivered the demarche in reftel B to MFA Director General of Economics Chrysanthopoulos. Chrysanthopoulos had already received a read-out from the Greek Embassy in Washington of the meeting between EB DAS Byerly and the Greek DCM. Chrysanthopoulos opened the conversation by asking if denouncing the agreement and letting it expire weren't the same thing. DCM noted that, while the practical effect might be the same, the political message that Greece would be sending in the event of a denunciation was considerably worse. DCM reminded Chrysanthopoulos that Greece would be the first EU member to take such an action and that May 18 (the deadline the EC has set for a GoG response) is only two days before the Greek PM is scheduled to meet with POTUS in Washington. Further, DCM observed, Greece has often deflected U.S. requests for support on other issues with the statement that they are bound by the consensus opinion in Brussels. How would it play in Washington if in this instance the Greeks were unhelpful by breaking from the consensus position of EU member states? Chrysanthopoulos agreed to explore other options and essentially took immediate denunciation off the table. ¶3. (U) Chrysanthopoulos explained that Greece is concerned because the GoG has received correspondence from the Commission to the effect that any extension of the BATA constitutes a new negotiation, and thus violates EC regulation 847. DCM debated this point, noting that in the absence of actual negotiations or modifications to the agreement, the EC was clearly stretching the definition of new negotiations. DCM then suggested that the GoG inform the EC of its intention to extend the BATA in July unchanged, thus satisfying the EC's notification requirement, while implicitly rejecting the Commission position that an extension is the same as a new negotiation. Chrysanthopoulos stated that he was unhappy with the EC position, did not want to leave his national carrier with uncertain access to its U.S. market, and was concerned with the implications for the Greek tourism season coming on. He concluded the meeting by noting that he would be consulting with his colleagues on next steps, and would inform us of any further actions. ¶4. (C) Comment: It was clear that Chrysanthopoulos is unhappy being caught between the U.S. and the EC. The GoG position is heavily influenced by the number of times it has been hauled in front of the European Court of Justice (ECJ) and the Commission on other issues. Nevertheless, the Greeks do not want to harm the tourism industry here and are particularly sensitive to any possible disruption in air transport services. Chrysanthopoulos expressed his frustration clearly, wondering aloud if the EC truly expected him, alone in the EU, to leave his country without an air services agreement with the U.S. ¶5. (C) The most encouraging portion of the meeting was that the Greeks now appear to have taken denunciation off the table. Whether they will find the strength to stand up to the EC and extend the current BATA is unclear, but if they accept our advice, they should be able to at least buy enough time to explore other options. End comment. Ries