TURKEY AND GMF - SEEKING WIDER BLACK SEA WESTERN

UNCLAS SECTION 01 OF 03 ANKARA 005817 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECIN EPET MARR PREL NATO TU RS XH ZJ SUBJECT: TURKEY AND GMF - SEEKING WIDER BLACK SEA WESTERN STRATEGY ANKARA 00005817 001.3 OF 003 ¶1. (SBU) SUMMARY: On September 10-11 in Ankara, The German Marshall Fund (GMF) organized a workshop on "Developing a Western Strategy towards the Wider Black Sea Region", attended by EUR DAS Matt Bryza. Participants sought to strike common ground and called for greater cooperation on security, energy security, and democratization, noting that Turkey must be a pillar. Some took note that the U.S. (in particular EUCOM) had stepped back from seeking military access to the Black Sea, but appeared unaware that this was tied to an active information-sharing arrangement between Turkey and NATO. Bryza and others cited the importance of Azerbaijan and Turkey to advancing the southern gas corridor to Europe to increase collective energy security by diversifying energy supply and transit. This ended up as one of the major topics of the workshop. End Summary. ¶2. (SBU) STRATEGIC OVERVIEW: Ron Asmus, GMF-Brussels Executive Director and workshop chair, framed discussions by using a draft paper aimed for the first chapter of a book that is one desired outcome of the series of GMF workshops on Black Sea strategy. Points he emphasized: -The Black Sea region is an integral part of Europe, but EU enlargement fatigue is an issue. -Georgia and its integration into NATO should be supported (NATO MAP). -Frozen conflicts should be higher priority. -The BSEC (Black Sea Economic Cooperation organization) should be more active and results-oriented. -Energy security and diversity should be advanced. -Security initiatives should be expanded and supported. -Maritime issues should be separated from wider Black Sea issues. There were a lot of comments reflecting surprise about Turkey's ambivalence and sensitivities on Black Sea, at least in part driven by concerns about perceived U.S. designs on military access and security. Moreover, many participants claimed the situation in Iraq created a negative perception about the U.S. role and credibility in the wider Black Sea. There were concerns expressed about EU enlargement fatigue and its effect on the region. In addition, there were questions about the impact of the end of the Orange Revolution in the Ukraine on Black Sea strategy. ¶3. (SBU) GOALS AND HOW TO DEAL WITH RUSSIA: In developing a western strategy towards the wider Black Sea region, speakers described Turkey as a pillar. A number of speakers, including DAS Bryza, underscored the need to determine and prioritize shared goals and strategy. Bryza emphasized that we should pursue our goals and interests even when they are in conflict with Russia and ensure that we compete more effectively without antagonizing Russia needlessly. Asmus and Bryza proposed that activities focus and balance in three areas: security cooperation, democratization and governance, and energy/trade. ¶4. (SBU) INSTITUTIONS AND SECURITY: Workshop participants agreed on relevant Black Sea institutions. They identified BSEC for energy and economy, lamenting that it was not more effective as an institution. Participants noted that security was the focus of a few institutions, like BlackSeaFor (cooperating with Operation Endeavor) and Black Sea Harmony. Bryza and others applauded the information exchange implemented by the GOT in the maritime realm, as described by Turkish Navy Rear Admiral Cem Gurdeniz. Bryza said the U.S. supports Bulgaria and Romania participating in Black SeaHarmony. He said the U.S. does not seek to hav its military ships regularly enter the BlackSea. Participants were struck at the apparentdegree that Turkey sees the Montreux agreement controlling passage of vessels in the Turkish Straits as sacrosanct. Bryza said the U.S. is working to use its role as BSEC observer to make BSEC's efforts more action and results oriented. ANKARA 00005817 002.3 OF 003 ¶5. (SBU) CAUCASUS: Participants observed the lack of progress on frozen conflicts in the Caucasus, noting that that there was always the risk of them "unfreezing". Speakers called for continued support to Georgia's "Rose Revolution, and noted the special challenge of Russian historical and economic influence in the region. Bryza stressed the importance of Turkey to the region in energy, economic, and political relations. He described Turkey as an ally and an important regional leader, in particular as a secular democracy with a predominately Muslim population, but with a unique experience - that cannot necessarily be applied as a model. Bryza also noted the potential importance of Azerbaijan, given its Shiite population, but observed that it still had a way to go on democratization. Bryza extolled Georgia as a big success, and explained that the U.S. strongly supports moving it forward on NATO accession. ¶6. (SBU) ENERGY SECURITY AND RUSSIA: Launching a discussion on energy security, Turkish MFA Energy Coordinator Mithat Balkan presented a vision of multiple pipelines, which included Blue Stream expansion south to Ceyhan for LNG processing, so that it would not conflict with Caspian gas transit to Europe. He pressed for more support from the U.S., noting that there was no longer a special energy envoy to the region and claiming that former President Clinton was more supportive than President Bush. Balkan admitted that the biggest problem was the limited commitment from the EU as client for gas transit. ¶7. (SBU) MFA Deputy Director General for Energy Mithat Rende asserted that Russia cannot be constructively engaged on energy without having alternatives to transit on Russian soil. Otherwise, the Kremlin will continue to use energy as a foreign policy tool. For example, to make the Russians "behave" on CPC expansion, alternatives like BTC expansion and TCP for both oil and gas are needed. Rende worried about the EU's ability to forge a joint energy policy, particularly under an imminent German Presidency, given its ties to Gazprom and the proposed Baltic pipeline. ¶8. (SBU) Presenting PowerPoint maps showing Russian dominance of pipelines to Europe, Bryza advocated progress on diversification via a southern gas corridor from the Caspian. Bryza described the European gas market as broken, because it is overly reliant on Russia, which would soon face problems meeting its supply contracts - given lack of investment in its fields. Therefore, Gazprom is busy seeking to tie up Central Asian supply, which it in turn sells to Europe at exorbitant margins, as well as seeking to buy into downstream companies in Europe. Bryza (and other speakers) lamented the EU's passive acceptance of its over reliance on Russia, noting that if we were not successful in encouraging Europe to reduce its over dependence on Russia, this would weaken our ability to forge consensus on Caspian-sourced projects. He lamented news that Hungary had struck a significant independent deal on gas storage with Gazprom. He exhorted the EU to be more active in promoting Caspian gas to diversify its sources. ¶9. (SBU) Bryza asserted that the key next step will be to get Azerbaijan to signal to investors and partners that it is serious about developing Shah Deniz Phase II for export. He said that current forecasts from BP/Statoil showed potential for 50 BCM from Shah Deniz Phase II by 2015-16. ¶10. (SBU) COMMENT: The Black Sea workshop raised more questions than answers. Given weak institutions and unwieldy interests in the region, developing a new Euroatlantic strategy for the wider Black Sea region is an immense challenge. Developing such a "western" strategy is by definition exclusive of Russia, which plays a dominating and not always constructive role in the region, in particular in the energy sector. The USG can continue to work with ANKARA 00005817 003.3 OF 003 regional institutions on cooperative and selective approaches, in particular with its relatively new observer status in BSEC. Visit Ankara's Classified Web Site at http://www.state.sgov.gov/p/eur/ankara/ WILSON