FINNISH AMBASSADOR TERHI HAKALA DISCUSSES THE EU'S

C O N F I D E N T I A L SECTION 01 OF 03 BAKU 001433

SIPDIS

SIPDIS

DEPT FOR EUR/CARC

E.O. 12958: DECL: 09/27/2016
TAGS: PGOV PREL ENRG PBTS AR AZ
SUBJECT: FINNISH AMBASSADOR TERHI HAKALA DISCUSSES THE EU'S
RELATIONS WITH AZERBAIJAN

REF: BAKU 01086

Classified By: Acting DCM Joan Polaschik for reasons 1.4 b and d.



1. (C) SUMMARY: Finnish Ambassador Terhi Hakala met with the
Ambassador on September 22 to discuss Azerbaijan's European
Neighborhood Policy (ENP) Action Plan. The EU Commission has
approved the plan, and the EU Troika will visit Baku on
October 3. Hakala said negotiating the agreement was
sometimes difficult because of Azerbaijan's ties with the
Turkish Republic of Northern Cyprus (TRNC),Baku's attempt to
amend the agreement's text on Nagorno-Karabakh, and the
disagreement over the need to make an explicit reference to
this summer's fires in NK. Hakala said that the GOAJ's
negotiating behavior was driven by Baku's perception that its
leverage with the EU is growing, a conspiratorial fear that
EU states and Russia are predisposed to favor Armenia, a
limited understanding of working with the EU, and failing to
anticipate how their ties with the TRNC would impact their EU
relations. Hakala commented that the GOAJ has a "campaign"
to find an alternative forum for resolving the NK conflict
apart from the Minsk Group. Hakala and the Ambassador
affirmed the need for US-EU policy and aid coordination in
Azerbaijan. END SUMMARY.


EU GREEN LIGHT ON ACTION PLAN
--------------


2. (C) Terhi Hakala, Finland's roving ambassador to the
South Caucasus states, met with the Ambassador on September
22 to discuss Azerbaijan's European Neighborhood Policy (ENP)
Action Plan. Hakala said the European Commission approved
Azerbaijan's Action Plan in July. As Finland holds the EU's
presidency, Hakala was in Baku to prepare for a potential
Troika visit to Baku, Tblisi, and Yerevan during the week of
October 2. While several details need to be clarified before
a Troika visit, Hakala was optimistic that the Troika would
come to Baku on October 3 to announce an agreement on the
Action Plan.


3. (C) After a Troika visit, the Action Plan would need to
be signed during a meeting of the EU Cooperation Council.
Hakala was hopeful that this would occur during the
Cooperation Council's next meeting in November. She added
that President Aliyev has expressed his desire to come to
Brussels for the signing ceremony. The Action Plan would be
made public after the signing.


LOW EXPECTATIONS FOR THE ENERGY MOU
--------------


4. (C) Hakala downplayed the substantive importance of the
Memorandum of Understanding on EU-Azerbaijani energy
cooperation, which the EU wants to accompany Azerbaijan's
Action plan. Characterizing the MOU as "mostly political,"
Hakala said it had "no practical results." She proceeded to
explain that the agreement is largely intended as a political
signal by the EU that it is engaged on the issue of Caspian
energy.


THE NEGOTIATIONS WEREN'T FREE OF OBSTACLES
--------------


5. (C) Hakala briefed the Ambassador on several challenges
the EU faced in negotiating Azerbaijan's Action Plan. First,
the GOAJ's relations with the Turkish Republic of Northern
Cyprus (TRNC) created a one year delay. In particular, the
GOAJ's willingness to permit the August 2005 charter flight
between Baku and the TRNC created complications, with Nicosia
trying to delay Azerbaijan's Action Plan.


6. (C) Second, the GOAJ and GOAM in April 2006 sought to
incorporate language into their Action Plans that selectively
cited UN and OSCE statements favoring their respective
positions on the Nagorno-Karabakh conflict. Azerbaijan
wanted to include language supporting the principle of
territorial integrity, while Armenia sought to include
language backing the right of self-determination.


7. (C) Third, in July 2006, the GOAJ sought to incorporate

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language that characterized the summer fires in
Nagorno-Karabakh as an environmental catastrophe. The GOAJ
wanted to link its efforts to put the fires on the UNGA
agenda with its Action Plan. Hakala said the EU plainly told
the GOAJ that there was no link between the two issues and
would not amend their Action Plan. The EU Commission in
July approved the Action Plan.


AZERBAIJANI NEGOTIATING TACTICS
--------------


8. (C) Hakala cited four reasons for the GOAJ's attempt to
introduce changes to the Action Plan. First, Azerbaijan
increasingly perceives itself to be in a stronger negotiating
position with the EU because of the latter's desire for
alternative gas sources. Hakala noted that at one point, the
GOAJ threatened to abandon the MOU on energy cooperation.
Signaling some frustration, Hakala remarked that this tactic
was the "typical" Azerbaijani negotiating style, specifically
"to get something and then to ask for something more."
Second, Azerbaijan holds a "conspiratorial" view that France,
other unspecified European states, and Russia favor Armenia
on a variety of issues, including a Nagorno-Karabakh
settlement. Third, the GOAJ has a limited understanding of
how to work with the EU. Hakala provided the example of the
Azerbaijani ambassador to the EU, Arif Mammadarov, who she
characterized as not having a "good grasp of how to deliver
messages to the EU." Finally, Azerbaijan did not initially
understand how permitting flights to the TRNC would
negatively impact progress on its Action Plan. Hakala
admitted, however, that she didn't completely understand why
the GOAJ pushed so hard to make changes to the Action Plan,
particularly in July. (NOTE: UK Ambassador told the
Ambassador in confidence that Azerbaijan had learned that the
EU Commission representation negotiating the Armenian Action
Plan had agreed to stronger language on self determination.
As a result, the GOAJ pushed for changes in Azerbaijan's
Action Plan.)


AZERBAIJAN HINTING AT ALTERNATIVES TO MINSK GROUP
-------------- --------------


9. (C) Hakala commented that these four factors also have
informed the GOAJ's evolving approach toward the Minsk Group
process. Hakala referred to an Azerbaijani "campaign" to
seek an alternative forum for resolving the NK conflict apart
from the OSCE Minsk Group. This campaign includes publicly
attacking OSCE representative Andrzej Kasprzyk and publicly
threatening to give up on the Minsk process. (Note:
Azerbaijani Foreign Minister Elmar Mammadyarov and Deputy
Foreign Minister Araz Azimov have both recently supported the
idea of discussing the NK conflict in other international
organizations--including the UN--according to local press.)
Hakala suggested that Azimov might be pushing Mammadyarov to
seek a different forum for resolving the conflict.


NOT LOOKING TO GEORGIA AS TEMPLATE FOR RESOLVING NK
-------------- --------------


10. (C) Turning to the resolution of frozen conflicts in the
former Soviet space, Hakala commented that she does not think
the GOAJ is looking to Georgia as an example for trying to
get the EU to increase pressure on Russia. She said that
Baku considers Tbilisi's approach to be "too precipitous."
Illham Aliyev and Mikhail Saakishvilli's relations are also
problematic because of personality differences.
Additionally, Baku "has great relations with Russia,"
relative to Tbilisi.


US-EU COOPERATION INTEGRAL
--------------


11. (C) The Ambassador and Hakala agreed on the confluence
of US-EU goals in Azerbaijan. Hakala noted that US-EU
coordination is important so that the GOAJ is not able to
exploit perceived differences between the two partners'
policies or aid programs. Hakala was open to the
Ambassador's suggestion to brief the "Revenue Management
Group"--a group of western embassies and the IFI's--on the
EU's assistance programs for Azerbaijan.

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12. (C) Hakala opined that the EU "to some extent has failed
to clarify its role in the south Caucasus." She noted the
European Commission office probably would not open until the
end of 2007. (Note: Per reftel, EU Special Representative to
the South Caucasus Peter Semneby was hopeful that the
Commission office would open in early 2007. The Ambassador
clarified this point with Hakala, who reiterated that the
office's opening was delayed because of funding.)


13. (C) COMMENT: A potential EU Troika visit to Baku would
be a clear signal to the GOAJ and surrounding countries that
the EU is committed to deeper engagement with a region it has
long neglected, and therefore a positive step forward in what
has been an extended negotiation process over Azerbaijan's
Action Plan. A more robust EU presence in Azerbaijan would
enhance US-EU cooperation in Baku and help advance our common
interests.
DERSE