THE DEPUTY SECRETARY,S MAY 21 MEETING WITH

C O N F I D E N T I A L CAIRO 003227

SIPDIS

NSC FOR SINGH

E.O. 12958: DECL: 05/29/2016
TAGS: PGOV PREL ECON KDEM LE
SUBJECT: THE DEPUTY SECRETARY,S MAY 21 MEETING WITH
LEBANESE PM SINIORA


1. (U) Classified by: Minister-Counselor Michael H. Corbin,
Reasons 1.4 (b) and (d)


2. (U) MAY 21, 2006; 12:45; Sharm El Sheikh, Egypt


3. (C) Participants:

U.S.
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The Deputy Secretary
NEA DAS Scott Carpenter
D Executive Assistant Mike Matera
D Senior Advisor Rich Mills
D Special Assistant Aaron Jost

LEBANON
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Prime Minister Fouad Siniora
Prime Minister's STAFF



4. (C) Summary: The Deputy Secretary met briefly with
Lebanese PM Siniora on the margins of the World Economic
Forum in Sharm El Sheikh Egypt. The Deputy Secretary and PM
Siniora discussed Siniora's recent trip to the U.S., economic
and political reform, and U.S. support for the PM's reform
program. End Summary.

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U.S. Trip
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4. (C) Siniora informed the Deputy that he had had a "very
successful" trip to the U.S., specifically citing meetings
with NATIONAL SECURITY Advisor Hadley, the Department of
Treasury and the U.S. Trade Representative. Lebanon
appreciates U.S. assistance, Siniora stated.

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Reform
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5. (C) In response to the Deputy's questions about progress
on economic reform, Siniora said his government was seeking
public buy-in for reform, focusing on improving relations
with its trade partners (particularly the U.S.),and working
to accede to the World Trade Organization (WTO).


6. (C) Siniora confirmed that his government was working with
Parliament on reform, but noted that Lebanon was emerging
from a transition "from one situation to another." In
particular, the GOL was attempting to consolidate sovereignty
over its territory. Shebaa Farms was of particular concern;
"once" the Farms were declared to be Lebanese by the UN, he
said, Israel would be required to withdraw under its UN
Security COUNCIL resolution obligations. The ongoing
"National Dialogue" was discussing important issues. Though
the March 14 alliance holds two-thirds of the cabinet seats
and the majority of the legislature, "Lebanese society does
not ensure majority rule." Nonetheless, the parliament "is
quite active in preparing to pass (reform) legislation," in
particular on social and economic issues that would ease
Lebanese entry to the WTO.


7. (C) Siniora also confirmed that his government was working
to address Lebanon's high debt levels. Past governments had
been unsuccessful in dealing with Lebanon's crushing debt
burden, budget deficit, low revenue, and sluggish growth due
to political problems. In contrast, his government had
recently met with the U.S. Department of Treasury to discuss
Lebanon's "major" economic reforms that were increasingly
converging with the International Monetary Fund's
expectations. Lebanon's success in pursuit of economic
reforms, Siniora and the Deputy Secretary agreed, would be
important not just for the Lebanon, but the region.


8. (C) The Deputy Secretary concluded the meeting by assuring
the Prime Minister that the United States strongly supported
his efforts.


9. (U) The Deputy Secretary' party has cleared this cable.
RICCIARDONE