Identifier
Created
Classification
Origin
05VIENNA3024
2005-09-12 10:40:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Vienna
Cable title:  

AUSTRIAN VIEWS ON DEVELOPMENT: DEVELOPMENT ISSUES

Tags:  ECIN EAIR EAID EFIN AU UNGA 
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UNCLAS VIENNA 003024 

SIPDIS

SENSITIVE

E.O. 12958: N/A

TAGS: ECIN EAIR EAID EFIN AU UNGA
SUBJECT: AUSTRIAN VIEWS ON DEVELOPMENT: DEVELOPMENT ISSUES


AT THE HLE AND INNOVATIVE SOURCES FOR FINANCING DEVELOPMENT

REF: A) STATE 162146 B) STATE 160880

UNCLAS VIENNA 003024

SIPDIS

SENSITIVE

E.O. 12958: N/A

TAGS: ECIN EAIR EAID EFIN AU UNGA
SUBJECT: AUSTRIAN VIEWS ON DEVELOPMENT: DEVELOPMENT ISSUES


AT THE HLE AND INNOVATIVE SOURCES FOR FINANCING DEVELOPMENT

REF: A) STATE 162146 B) STATE 160880


1. (U) Econ Unit Chief delivered ref A and B talking points

to Thomas Nader, Director (A/S-level) of the MFA's

Multilateral Development Cooperation Division on September 6

and to Thomas Wieser, Director General (U/S-level) of the

Ministry of Finance's Economic Policy and Financial Markets

Directorate on September 8. Post also conveyed the USG

position on the declaration on innovative financing (ref A)

to Elisabeth Udof-Strobl, Director General of the Ministry of

Economy's Tourism and Historical Sites Directorate; Manfred

Bialonczyk, Head of the Ministry of Transportation's Aviation

and Navigation Division; and Anna Maria Hochhauser, Secretary

General of the Austrian Chamber of Commerce.

Development Issues in the UN High Level General Assembly

-------------- --------------


2. (SBU) Nader said the GoA supported the USG on the

substance of the three structural changes to the development

chapter: acknowledging the efforts and achievements since the

Millennium Summit and Monterey Conference; recognizing the

multifaceted contributions to development assistance,

especially trade and FDI; and elaborating governance issues

more prominently in the development chapter. However, from a

procedural standpoint, Nader questioned whether pushing for

modifications "at such a late date" might not encounter

resistance from certain G-77 members and encourage others to

put forward more frivolous and controversial changes.

Declaration on Innovative Sources of Financing

-------------- -


3. (SBU) Both Nader and Wieser stated that Austria had not

yet decided whether to support the declaration, because

Austria agreed with some parts of the declaration, e.g., a

reference to ODA targets, but it would not endorse an

international finance facility (IFF). Nader regretted that

Spain, France, and Germany had not consulted with other EU

Member States before launching this initiative.


4. (SBU) ODA Targets: Nader noted that Member States had

affirmed their commitment to reach an ODA level of 0.7% of

GDP by 2015, so re-affirming this target would be perfectly

acceptable. Nader and Wieser noted that current ODA levels

were not sufficient to achieve the Millennium Development

goals. Innovative financing sources for ODA were necessary,

but donors should concurrently increase and maximize the

benefits of non-ODA sources of assistance, such as trade

liberalization and FDI.


5. (SBU) Airline Tax: Wieser maintained that the effects of

a small airline tax on consumers and the airline industry

would be marginal. Austria could support such a tax, but

only if it were universally mandatory, and would thus not

distort competition. Wieser admitted that there were widely

varying views within the EU on whether and how to implement

an airline tax. Wieser noted that Chancellor Schuessl had

suggested earlier this summer, in order to provoke a

discussion, that the EU could earmark some of the proceeds

from an airline tax for the EU's general budget revenues, as

well as for ODA. On September 9, Finance Minister Karl-Heiz

Grasser publicly stated Austria's opposition to a voluntary

airline tax, noting that it would have a negative impact on

passengers and airlines.


6. (SBU) IFF: Wieser and Nader were adamant that Austria

would not participate in any IFF development schemes. Wieser

noted that the proposed IFF scheme might effect a decline in

ODA in out-years, as governments pay back the IFF bonds from

their assistance budgets. Moreover, according to Wieser, the

IFF scheme could crowd out other forms of assistance, e.g.,

trade, and there are legitimate concerns about the absorptive

capacities of some developing countries. Wieser added that

Austria, like the U.S., did not want to pay for current

development assistance out of future aid budgets.

Brown