1. (C) SUMMARY: In the face of an ongoing phone-tapping
scandal (Ref A) of high-level Greek Government officials (in
which the U.S. has been fingered in the media as the
culprit), Greek FM Molyviatis used a one-on-one lunch
February 8 with Ambassador in a central Athens restauarant to
emphasize his commitment to the U.S.-Greece relationship.
Greece-Turkey-Cyprus issues were the focus of their
discussion, with Molyviatis agreeing that the time seemed
ripe for a new UN-led process on Cyprus, while bemoaning
Turkish overflights in the Aegean and unhelpful attitudes in
Ankara. Molyviatis reported that Russian FM Lavrov, during
his Feb 6-7 visit to Greece, said that "Russia could accept
the inevitable" on Kosovo (Greek energy discussions with
Lavrov reported septel). Per Ref B, Molyviatis said he saw no
reason why Greece could not support Guatemala's UNSC
candidacy. END SUMMARY.



2. (C) Ambassador's February 8 lunch with the Foreign
Minister was originally scheduled to take place at the
Ambassador's residence. Following revelations that unknown
agents had tapped the cell phones Greek Government officials
including the PM, FM Molyviatis proposed the venue be changed
to the Grande Bretagne Hotel in Athens Center where all could
see that the U.S.-Greece relationship was unimpaired. For
the first time since Ambassador's introductory call on the
FM, there was a photographer present at the top of the
meeting. (The picture was prominently carried in a number of
Athens dailies February 9.) Addressing the eavesdropping
case, Molyviatis gave his opinion that the whole hullabaloo
had been unneccessary. It would have been sufficient to hand
the matter to the judicial authorities for investigation and,
if appropriate, prosecution, he said. But now, both he and
the Prime Minister were keen to show that the current
hysteria did not detract from excellent U.S.-Greece relations.



3. (C) Ambassador asked whether the current Vodafone
imbrogolio had changed the PM's plans to reshuffle his
Cabinet (including Molyviatis). Molyviatis said that before
he had traveled to London (for the Afghanistan Compact
ministerial meeting on Jan 31), the PM had told him "When you
get back, we'll have a whiskey and sort things out." Well,
Molyviatis said, he hadn't yet had that whiskey, and was
waiting for the call from the Prime Minister. He intimated
that the PM could make the call at any time.



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


CYPRUS/TURKEY


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




4. (C) Turning to Cyprus, Molyviatis told Ambassdor that
Cypriot President Papadopoulos had spoken to UNSYG Annan
after the UNSYG's meeting with Turkish PM Erdogan at Davos.
Papadopoulos reportedly told Annan that Nicosia wanted to
start a new UN process on Cyprus, and he asked Annan to
dispatch Special Rep Gambari soon to the region.
Papadopoulos and Annan also were said to agree to meet
"somewhere in Europe" in March. Before that, Molyviatis
reported, Papadopoulos wanted to come to Athens for
consultations. Molyviatis then broke off his narration to
call PM Karamanlis to relay Papadopoulos' request. According
to Molyviatis, Karamanlis said to say yes, but "to push him
off for a bit." Molyviatis then placed a call to President
Papadopoulos (according to Molyviatis, he got Papadopoulos
out of a Cabinet meeting), and relayed Karamanlis' answer:
yes, but we'll work on dates. When Papadopoulos pressed
Molyviatis for a timeframe, Molyviatis said he would call him
back.



5. (C) Phone calls finished, Molyviatis confided that he was
worried that absent a Cyprus process, Turkey's EU accession
track was in trouble. This, he noted, was in no one's
interest -- not Greece's, not Turkey's, not the U.S.'s. He
admitted that any process would probably fail, because
Papadopoulos "only wanted to look good in international
eyes." Papadopoulos was, he said, "stung by the Turkish
maneuver" (the recent proposal to open ports and airports).
Ambassador pointed out to Molyviatis that the Turkish
proposal was not a take-it-or-leave-it proposition. It would
be, however, a way to restart movement. Molyviatis
acknowledged the point, but regretted that Turkey did not
present it in this way.



6. (C) As an aside, Molyviatis reported that Papadopoulos
had floated the idea of hosting a meeting on the ongoing
controversy about cartoons of the Prophet. He had suggested
bringing together the northern Europeans and representatives
from the Middle East in Cyprus. Molyviatis said he thought
this was Papadopoulos trying to make himself a bigger player
in international affairs. Ambassador noted, with regret,
that it was more likely a Papadopoulos ploy to get the
Nordics to see the Cyprus issue in a more favorable light for
Nicosia. Molyviatis, laughing, agreed.



7. (C) In sum, Molyviatis reiterated that all sides wanted a
process restarted. All sides had their own agendas, it was
true, but nevertheless, we had general acceptance of the need
for a process. The question now was, he said, whether UNSYG
Annan would be interested in starting a process that he would
not oversee to the end, given the UNSYG's expiring term.
Ambassador noted that the Cyprus issue would not be solved in
a few months' time, so perhaps it made sense to take
advantage of the momentary convergence of opinion on
restarting a UN-led dialogue.



8. (C) In the lunch's second dramatic act, Defense Minister
Spiliotopoulos called Molyviatis to report that six Turkish
aircraft had just violated Greek six-mile territorial
airspace and overflown Greek islands and islets. Molyviatis
took the opportunity to underscore Greek unhappiness with
such continuing Turkish behaviour. He told Ambassador that
following the opening of the EU accession process with Turkey
on October 3, both PM Karamanlis and FM Molyviatis received
"thanks for your help" letters from PM Erdogan and FM Gul.
But neither letter was signed, he grumped.



9. (C) Ambassador asked whether it was possible that Cyprus
would, in frustration, dispatch one of its ships to a Turkish
port in an effort to force implementation of the customs
union protocol. Molyviatis said he did not worry about this
coming to pass soon; for one thing, the European Parliament
had not yet ratified the Ankara Protocol, so the Cypriots
wouldn't have a basis to do it. Later, however, he admitted
that this could be a card Nicosia could play. Again, he
stressed, restarting a Cyprus process would help mitigate bad
feeling.



10. (C) Molyviatis asked Ambassador for an update on the
Cyprus arms issue. Ambassador replied that we did not yet
have a response to Greece's proposal for resolution (Ref C).
Any solution, however, would need to have three elements: (1)
all U.S.-origin arms must be locked-down and under Greek
control; (2) there must be a verification mechanism,
including surprise inspections; and (3) any post-87
equipment, including equipment upgraded with post-87 kits,
must come off the island. Molyviatis noted that the last
point might be the most difficult.



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


BALKANS


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




11. (C) In a discussion of Russian FM Lavrov's February 6-7
visit to Athens (reported septels), Molyviatis told
Ambassador that Lavrov was clear that Russia "will accept the
inevitable on Kosovo."



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


VENEZUELA/GUATEMALA IN THE UNSC


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




12. (C) Ambassador delivered Ref B demarche requesting Greek
support for Guatemala's 2007-2008 candidacy, as well as
opposing Venezuela's candidacy. Molyviatis took the points
on board, and said Greece had not yet been lobbied by either
country. He told Ambassador he saw no reason not to support
Guatemala for the UNSC seat. (Embassy will follow up with
the IO Director on Feb 9.)
RIES