EU OFFICIALS PREVIEW MAY 24 EU-RUSSIA SUMMIT FOR

C O N F I D E N T I A L SECTION 01 OF 02 BRUSSELS 001153 SIPDIS DEPT FOR EUR/RUS E.O. 12958: DECL: 04/03/2016 TAGS: PGOV PREL RS XH EUN USEU BRUSSELS SUBJECT: EU OFFICIALS PREVIEW MAY 24 EU-RUSSIA SUMMIT FOR EUR/RUS DIRECTOR WARLICK Classified By: POLCOUNS LEE LITZENBERGER FOR REASONS 1.4 (B,D) ¶1. (C) Summary: In meetings March 23 with visiting EUR/RUS Director Warlick, EU officials said their overall expectations for the May 24 EU-Russia Summit are low. The sides will begin discussions/negotiations on a successor framework document to replace the existing EU-Russia Partnership and Cooperation Agreement (PCA); hope to sign a financing agreement to allow for the implementation of a 20 million euro EU assistance program devoted to education, health, and stabilization in the North Caucasus; formally sign the visa facilitation agreement reached last fall; and announce a joint-financed EU/Russia European Studies Institute in Moscow. Energy cooperation is also expected to be on the agenda. End Summary. Starting to Update the PCA -------------- ¶2. (C) In a meeting on March 23 with EUR/RUS Director Mary Warlick, Hugues Mingarelli, European Commission Director for Eastern Europe, the Caucasus and Central Asia, said that his overall expectations for the May 24 EU-Russia Summit in Sochi are low. Discussions are expected to be launched at the Summit, however, on updating the EU's current Partnership and Cooperation Agreement (PCA) with Russia, which came into force in December 1997 for an initial duration of ten years, and will be automatically extended beyond 2007 on an annual basis - unless either side withdraws from the agreement. Mingarelli said Russia has indicated it does not intend to withdraw from the Agreement but wants to negotiate a new framework text. He expressed concern that the current PCA had taken two years to negotiate (1992-1994) when Russia was negotiating from a much weaker position; how much longer, he wondered, would a new PCA take to negotiate now that Russia is in a far stronger position than it was a decade ago? Another barrier to speedy negotiation, Mingarelli said, is the Russians inclination to negotiate important issues only at the political level rather than at the expert/official level that the EU sees as essential to brokering a new text. ¶3. (C) Mingarelli said he did not expect much to substantively change in a new framework agreement; it will likely be a "PCA Plus" with a new name, according to Gerhard Lohan, European Commission Head of Unit for Russia who also attended the meeting. The new agreement is expected to address implementation of the four 'Common Spaces' -- a long-term EU/Russia goal agreed upon at the May 2003 St. Petersburg Summit to create a common economic space; a common space of freedom, security, and justice; cooperation in the field of external security; and joint research and education. Mingarelli and other EU officials indicated that energy cooperation would also likely be on the agenda for the Summit. Assistance for North Caucasus -------------- ¶4. (C) Mingarelli said that the EU also hoped to finalize at the May Summit a 20 million euro technical assistance program for reconstruction in the North Caucasus. This program is intended to "go beyond humanitarian assistance" (the EU has provided some 170 million euros in such assistance to the region since 1999) and directly target training and equipment for education and health, as well as provide SME credit lines for income generation programs. Mingarelli expressed frustration that the Russians have not signed a financing agreement to allow for the implementation of this assistance program, which had been developed following extensive consultations with Russian officials Dmitriy Kozak and Sergey Yastrezhemskiy, among others. Russian officials had offered various explanations for their failure to finalize the assistance agreement; the latest had been that they did not like the political underpinnings of the documents, Mingarelli said. Mingarelli commented that the Russians seemed eager for the assistance, but wanted to be able to distribute the money themselves. He also noted that total EU assistance to Russia has been drastically reduced to just 44 million euros which is concentrated, in addition to the North Caucasus, in such areas as regulatory convergence, Kaliningrad, and energy cooperation, with less than 5 million euros going towards democracy promotion and civil society programs. ¶5. (C) Mingarelli lamented that it is difficult to have any substantive discussions with Russia on the North Caucasus and he believes that Russian policy in the region is not a policy -- it is a disaster. The Commission has proposed opening a satellite office (i.e. a branch of the Commission delegation in Moscow) in Vladikavkaz, but the Russians have not responded. Mingarelli commented that such an office would put the EU in a far better position to judge what was actually happening on the ground. He acknowledged that the EU's human rights consultations with Russia, which are run by the Presidency, had provided a useful forum for bilateral discussions on the North Caucasus and other issues. The third such meeting, held in March, had focused on three agenda items: the recently passed NGO law (the EU made clear that the whole world would be watching its implementation); developments in the North Caucasus; and, the Russian speaking minorities in the Baltics (a theme consistently raised by the Russians). Mingarelli added that the EU had met with 40-50 NGOs the day before the human rights consultations. Visa Facilitation/Russia's "Philosophy" -------------- ¶6. (C) EU Council Head of Unit for East Europe and Central Asia Jukka Leskela and EU Council Russia policy advisor Carl Hallergard told EUR/RUS Director Warlick on March 24 that formal signatures on the EU-Russia visa facilitation agreement are expected to take place at the EU/Russia Summit in May. Hallergard added that the Russians had proposed a discussion at the Summit of the "philosophy of Russian society", which is expected to be an articulation of Putin's vision of democratic development in Russia. Hallergard and Leskela also said that an announcement on the creation of a EU/GOR joint-financed European Studies Institute in Moscow will also take place at the EU/Russia Summit. ¶7. (U) EUR/RUS Director Warlick emphasized the importance of continued close consultation and coordination between the EU and the U.S. on developments in the North Caucasus, in Russia's relations with its neighbors and on democracy concerns in Russia, particularly in the lead up to the July G-8 Summit. GRAY .