EUR ASSISTANT SECRETARY FRIED LUNCH WITH LAW AND

C O N F I D E N T I A L WARSAW 002887

SIPDIS


EUR FOR A/S FRIED; NSC FOR DAMON WILSON

E.O. 12958: DECL: 07/12/2015
TAGS: PREL MARR PGOV ECON PL
SUBJECT: EUR ASSISTANT SECRETARY FRIED LUNCH WITH LAW AND
JUSTICE LEADER LECH KACZYNSKI

Classified By: CDA, A.I., MARY T. CURTIN, FOR REASONS 1.5 (B) AND (D)

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SUMMARY
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1. (C) EUR A/S Dan Fried met July 11 for lunch with
center-right Law and Justice (PiS) leader and presidential
candidate, Lech Kaczynski. They reviewed the bidding in the
upcoming parliamentary and presidential elections, with
Kaczynski saying differences between PiS and expected
coalition partner Civic Platform were mostly over economics,
with Civic Platform the more economically liberal by far.
Fried and Kaczynski spoke at length about the situation in
Ukraine, which Fried had just visited, with Kaczynski
expressing concern that we not push Ukraine to move too
rapidly on reform. Kaczynski assured Fried of his support
for Poland's presence in Iraq, but expressed hope for support
in military modernization. Fried urged Kaczynski and his
associates to attend a briefing on Iraq when Iraq coordinator
Ambassador Richard Jones and Deputy Commander of CENTCOM
General Smith visit Warsaw later this month. End summary.

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DOMESTIC POLITICAL SCENE
AND PRIORITIES
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2. (C) Fried, who was accompanied by Ambassador, NSC
Director for Central, Eastern and Northern Europe Damon
Wilson, and PolCouns, met for lunch July 11 with Kaczynski,
who was accompanied by Pawel Kowal, the director of his press
office. Reviewing the upcoming parliamentary elections,
Kaczynski said it was impossible to tell whether his party or
rival and likely partner, the centrist Civic Platform (PO),
would receive the highest number of votes and thus lead a
presumed coalition government. The presidential race was
complicated by the entry of Sejm Marshal Wlodzimierz
Cimoszewicz as the Democratic Left Alliance (SLD) candidate.
Kaczynski said the presidential elections are very important
for any reform, since the president can promote or block
change. The role of the president is not, he said, as
powerful as in the U.S., but the presidency carried a lot of
influence, and a president like Cimoszewicz, who represents
the past, could block changes sought by a center-right
government.


3. (C) Kaczynski said PO and PiS differed mainly on economic
policy. PiS, he said, is less economically liberal than PO,
although not "statist," as many charged. He said he believes
in the importance of a balance among various social groups,
and sees the growth of economic and social differences in
post-1989 Poland as a problem. Pensioners, for example, do
not receive very much, and there should be no decrease in
their benefits. PiS does not agree with PO's flat tax
proposals, believing a flat tax would not help the problem of
corruption or increase investment. Taxes, he argued, are
already relatively low. PiS is also concerned with the
problem of the "prestige of the state," and cutting spending
on everything will not help build this prestige. He
concluded by saying that no matter which party came out of
the elections ahead, the differences between them were minor
compared with their shared differences with the "old power."
(Comment: Kaczynski remains attracted to statist solutions,
although less stridently than 10-15 years ago. Kaczynski did
acknowledge to Fried that the architect of Poland,s initial,
fast-track economic reforms Leszek Balcerowicz "had achieved
something and had a certain logic", a statement which is for
Kaczynski a significant shift from his earlier views. End
Comment.)

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PiS-PO SHARED VIEWS
ON FOREIGN POLICY
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4. (C) Kaczynski continued that there were no major PO-PiS
differences on foreign policy, and that a PiS-PO government
would be "pro-American." There would be continuity in issues
such as policy toward Ukraine and Russia. Poland did not
want confrontation with Russia, but rather wanted to make
Russia understand that Ukraine is not part of its "sphere of
influence." Poland needed to cooperate economically with
Russia, and wanted to have good relations, provided there are
the "right conditions." Kaczynski said he did not want to
see Russia destroyed, he just does not want to see the return
of its empire, which Russia, he said, still sees Poland as
properly part of. It was painful to lose Poland, but the
loss of Ukraine is "twenty times bigger."


5. (C) Kaczynski asked Fried for a read-out on the situation

in Kiev, which he had just visited. Fried described his
concerns about the pace of reform, and compared Ukraine's
situation to that of Poland in 1990-1992, when post-communist
reforms seemed so difficult. He said Ukraine can benefit
from the experience of other countries that had undergone
such a transition, and that Prime Minister Juliya Tymoshenko
is a good politician, which would be a big help as the
government had to sell its reforms. Fried said that the
Ukrainians need to be the initiators of their reform, and
need to open their borders and move beyond the oligarchic
system.


6. (C) When Fried lamented that Ukraine does not have the
kind of economic reformers Poland did in the early 1990's,
Kaczynski (who opposed some of Poland's more far-reaching
free market reforms at the time),warned against radical
change. "It was difficult in Poland, in Ukraine it could be
lethal." Along with the difficult economic situation, there
are 12 million Russians in Ukraine, which could weaken
Yushchenko and strengthen Russia's position. Fried told
Kaczynski that Tymoshenko had similar views, and wants high
spending on the poor. This is fine in the short term, but
what Ukraine needs is economic growth. Kaczynski argued that
the concept of a pro-Western independent Ukraine is still
internally contested, and so the government must proceed
carefully so that as not to lose political support that was
gained in last year's elections.


7. (C) Kaczynski said that he was prepared to be Ukraine's
"advocate" in Europe. Poland has an interest in Ukraine's
turn to the west, he said, but some in the EU think it is too
big to absorb. Fried said that the U.S. also wants to see a
strong, independent Ukraine as part of Europe. It is part of
a wave of countries turning toward democracy, and we have a
strategic interest in encouraging it. Fried said he
appreciated Kaczynski's thinking on Ukraine, and that we are
looking for real partnership with Poland, and see it as a
leader in Europe. Kaczynski expressed concern about the
anti-Americanism of some European leaders, such as French
President Jacques Chirac, adding that he did not support the
idea of the EU as a "super state."


8. (C) On Iraq, Kaczynski said he supported Poland's
participation in Iraq, and not just as a way of "making
money." He said he favored continued participation in Iraq,
but wanted it tied to the modernization of Poland's army.
Without giving specifics, he said his party was "planning
changes" in the approach to military modernization, so that
the armed forces are "ready," although "not to invade
Moscow." Poland would want assistance from the U.S. in
achieving this. Fried described recent positive developments
in Iraq, and informed Kaczynski of the upcoming visit to
Poland of Iraq Coordinator Amb. Richard Jones and CENTCOM
Deputy Commander General Smith. He urged Kaczynski to attend
a briefing by them.


9. (C) Fried concluded by assuring Kaczynski that we looked
forward to close cooperation with the next Polish government,
and that we need Poland to be a strong partner to the U.S.
He urged Kaczynski to think of Polish-U.S. relations in those
terms, and not just in terms of U.S. assistance for Poland,
as had been the case in the first 10-15 years after the end
of communism.


10. (C) A/S Fried has cleared the text of this cable.
CURTIN