EUR A/S FRIED AND GERMAN POLITICAL DIRECTOR

C O N F I D E N T I A L SECTION 01 OF 02 PARIS 006113

SIPDIS

E.O. 12958: DECL: 09/01/2015
TAGS: PREL KNNP PARM FR NATO EUN
SUBJECT: EUR A/S FRIED AND GERMAN POLITICAL DIRECTOR
SCHAEFER DISCUSS IRAN-EU3, DEVELOPMENTS IN KOSOVO, AND HOW
BEST TO IMPROVE NATO DECISION-MAKING


Classified By: DEPUTY CHIEF OF MISSION KARL HOFMANN, REASON 1.4 B/D


1. (C) Summary: A/S Dan Fried met with German Political
Director Michael Schaefer September 1 in Paris, just prior to
the latter's departure for the EU's Gymnich in Cardiff.
Schaefer noted the EU3 considered the Paris Agreement
negotiations to have ended, given that Iran had resumed
conversion activities. The EU now supports referral of Iran
to the UNSC, but without an immediate reference to sanctions.
Schaefer called for the U.S. and the EU to get Chinese and
Russian support, in advance of the next IAEA Board of
Governors' meeting. A/S Fried cautioned that EU efforts to
obtain Russian or Chinese support must not lead to a watering
down of our joint approach to Iran. He recommended that the
EU and the U.S. think of an option, which could include
sanctions, with the long-term goal of promoting democracy in
Iran. Schaefer expressed concern that German business
interests would suffer in the event the EU imposed sanctions.


2. (C) On Kosovo, Schaefer related that UN special envoy Kai
Eide was downbeat about the situation on the ground, citing
deficiencies in justice, police, and privatization domains.
Decentralization is not working and parliamentary-approved
laws are not being implemented. Schaefer observed that
Rugova's poor health might also adversely affect the
situation. A/S Fried and Schaefer agreed that while status
talks should commence by the end of the year, there is still
time to work together on a common message. Schaefer
suggested increased consultations and the potential holding
of a conference on status talks. On NATO, A/S Fried conveyed
U.S. interest in informal and early consultations, possibly
in restricted format, as part of our effort to avoid major
disputes at NATO meetings. He emphasized that the U.S. was
not against U.S.-EU action when that was the best format.
A/S Fried also informed Schaefer of the upcoming Forum for
the Future conference in Bahrain, an initiative linked to the
Broader Middle East agenda. End Summary.

EU3 Discussions on Iran
--------------


3. (C) Schaefer related to A/S Dan Fried the outcome of the
EU3's August 31 discussions on Iran in Paris. The EU3 also
met with Russian DFM Kislyak on the same issue. Schaefer
said the EU3 have concluded that Iran had violated the terms
of the November 2004 Paris Agreement, that it needed to
comply with its IAEA obligations, and that the key now was
for the EU and the U.S. to ensure at the upcoming IAEA BOG
meeting that Iran would be referred to the UNSC. The
Russians, he said, are worried about a nuclear Iran, but do
not believe there is enough evidence to refer Iran
successfully to the UNSC. The task ahead, Schaefer noted, is
for the EU and the U.S. to convince the Russians, the
Chinese, the South Africans and others (NAM members) of the
necessity of reporting Iran. Schaefer said it was important
to counter Iran's legal arguments in defense of conversion.
The Iranians needed to be told that it is isolating itself,
as no one accepts the economic necessity of conversion.


4. (C) Schaefer said referral is the end goal, but that it
should not include immediate references to UNSC sanctions.
It would be hard for the EU and the U.S. to argue that a
threat exists when there is no evidence that Iran has moved
to the enrichment phase. Conversion in itself is not a
threat to international security, he added. Schaefer said
the authority of the UNSC could be used to push for the
support of the international community. At present, the
Iranians are not afraid of the UNSC -- they have changed
tactics from a dual-track approach of avoiding referral to
UNSC while proceeding with conversion, to a policy focused on
enhanced nuclear activities (eventual enrichment).


5. (C) A/S Fried cautioned that the EU quest to get the
Russians and others to accept the necessity of an UNSC
referral could risk a watering down of our common efforts
against the Iran nuclear program. To avoid becoming weak, he
suggested that the EU and the U.S. consider a "plan B" for
U.S. and EU sanctions. Schaefer said that the EU is looking
at potential economic measures, but that EU industry is in a
weak position. Small and medium size German companies run
the risk of bankruptcy in the event of the imposition of
sanctions. Additionally, once sanctions are implemented,
talks with Iran likely would end. Meanwhile, the Indians,
Russians and Chinese would benefit at the expense of Western
businesses. Schaefer and A/S Fried agreed that the Indians
might be key and that further consultations with them were in
order. Schaefer said the EU3 also would have to do a better
job of convincing the international community of the extent
of joint U.S. and EU efforts made to date to offer Iran a
solution. A/S Fried reminded Schaefer that we all might
benefit by distinguishing between the Iranian regime and its
people, as we work on our long-term goal of promoting
democracy in Iran. Schaefer responded that the Iranian
regime itself was already divided, adding that Iranian leader
Ahmadinejad is isolated from more moderates like Larijani and
Rafsanjani.

Kosovo
--------------


6. (C) Schaefer noted that UN special envoy Kai Eide was
downbeat about realities on the ground in Kosovo. Eide feels
a sense of urgency is lacking with respect to the enormous
difficulties still affecting the justice, police and
privatization systems. Laws passed by parliament, for
instance, are not being implemented on the ground.
Decentralization is not working, despite the stated
willingness by all sides to accept multi-ethnic communities,
even in areas where the Serbs are in a majority. Schaefer
said he told Eide that the focus should be on moving forward
on status talks. Schaefer and A/S Fried also observed that
Rugova's illness is a serious concern and a potential
complicating factor, with Schaefer fearing a power vacuum in
the event of the passing of Rugova. The latter's absence
could also adversely impact on the talks. Nonetheless, both
A/S Fried and Schaefer agreed that status talks should take
place by the end of the year. In the interim, Schaefer
noted, there were 6-8 weeks left for a sliding review. A
final paper on the issue is not ready, but the international
community can at least communicate to the parties that
benchmarks needed to be met.


7. (C) A/S Fried briefed Schaefer on U.S. thinking, noting
that EUR DAS DiCarlo would go to New York soon. Schaefer
suggested that perhaps he and U/S Burns could travel to the
region together to convey our concerns, to include
consultations with Eide. Without making a commitment, A/S
Fried concurred, adding that it was essential to press for
progress on decentralization. Schaefer indicated a
conference on talks might be useful, but observed that the
U.S. and Europe would need to think creatively about a
potential location, the participants, and the exact agenda.
A/S Fried said we could engage the Secretary if launching of
the talks is on the table.

NATO-EU Relations
--------------


8. (C) A/S Fried informed Schaefer that the U.S. wants to
improve its dialog with Europe and that he planned to propose
to the French that we debate issues more informally, possibly
in smaller groups. The aim is to quickly work out intentions
and not to get into institutional fights at NATO and
elsewhere, A/S Fried observed. Schaefer commented that
France viewed NATO's mandate as one restricted to operational
issues. A/S Fried emphasized that we did not, and that we
supported both the EU and NATO, though NATO was our
institution of choice for security issues and actions.
Touching on the difficulties experienced with France at NATO,
Schaefer and A/S Fried agreed that the U.S. and Germany
needed to push France harder to cooperate on decisions.
Picking up on the idea of consultations, Schaefer suggested
an informal meeting on NATO in New York. A/S Fried said he
would take up the suggestion in Washington. In a brief
reference to Central Asia, Schaefer volunteered to travel
with A/S Fried to Tashkent.

Broader Middle East
--------------


9. (C) A/S Fried briefed Schaefer on our goals in the Middle
East, specifically on the upcoming November 12
ministerial-level Forum for the Future conference in Bahrain.
He emphasized that the U.S. is looking for broader European
involvement.


10. (U) The message has been cleared by A/S Fried.
STAPLETON