AMBASSADOR'S MEETING WITH PM VANHANEN

C O N F I D E N T I A L HELSINKI 001148 SIPDIS SIPDIS E.O. 12958: DECL: 10/09/2016 TAGS: PREL PGOV PHUM ETRD ENRG EUN FI RU UP SUBJECT: AMBASSADOR'S MEETING WITH PM VANHANEN Classified By: AMBASSADOR WARE FOR REASONS 1.4 (B) AND (D) ¶1. (C) Ambassador Ware met with Prime Minister Matti Vanhanen Nov.8. Fresh from having recently hosted the EU-Ukraine Summit and the EU Heads of State/Government informals in Lahti (which included dinner with Russian President Putin),Vanhanen provided additional insights on Putin's Russia; energy security; and Ukraine's European perspectives. My Dinner with Vladimir -- Vanhanen's Take -------------- ¶2. (C) Press coverage and diplomatic reporting have offered dramatically different versions of how the atmospherics at the EU Heads of State/Government dinner with Putin unfolded, and Vanhanen was eager to share his version of events with the Ambassador. Vanhanen openly acknowledged some Member States' (MS) criticisms of the way in which he and Commission President Barroso had "managed" the conversation with Putin. However, the PM emphasized, the EU had learned a clear lesson from the 2002 Heads of State meeting with President Bush in Sweden. At that meeting, all 27 MS took the floor to deliver messages to President Bush, creating a situation in which the meeting quickly lost focus and much of its usefulness for both sides. In this case with Putin, Vanhanen and Barroso sought to allow a limited number of MS to take the floor on some issues, while at the same time tightening the format and managing debate, as the EU had done during President Bush's trip to Brussels in ¶2005. Just as better results were achieved in Brussels, Vanhanen said the Lahti meeting went more smoothly. ¶3. (C) That said, the EU still addressed some of the tough topics. German Chancellor Merkel, who sat next to Putin at dinner, specifically raised the murder of journalist Anna Politkovskaya on behalf of the EU. Reports on Merkel's role have varied, but Vanhanen was clear that she spoke directly. Poland was "very outspoken" on trade concerns and energy issues. Vanhanen and Barroso also took the lead in discussing energy security, human rights and the Frozen Conflicts - - in particular Georgia. Energy Security Themes -------------- ¶4. (C) Looking forward -- including toward the Nov. 24 EU-Russia Summit and, further on, to the handover to the German Presidency -- Finland sees its role as trying to build bridges between the EU and Russia, especially on energy and trade. In addition to delivering a negotiating mandate to the German Presidency for a new EU-Russia Partnership and Cooperation Agreement (PCA), Vanhanen told the Ambassador that the Finns (and the Germans) hope to "de-politicize the issues" between Russia and certain EU member states (i.e., Poland and the Balts),particularly on energy. Finland itself has no bilateral energy problems with Moscow, having carefully managed its direct energy imports from Russia for more than 60 years to avoid dependence. However, he emphasized, the Finns understand that they can help play both a leadership and an honest broker role in helping the overall EU-Russia energy relationship improve. That said, there is a long way to go, to be sure. According to Vanhanen, Putin's efforts to re-exert tight control over Gazprom and the rest of the Russian energy apparatus have made him suspicious of foreign companies, even though he intellectually understands how badly the sector needs foreign investment. Putin feels or has been told that he has made mistakes ceding too much influence to outside investors. Vanhanen said that major "private companies can't get any answers" or even reach anyone in the government regarding their energy investments. Ukraine -------------- ¶5. (C) Briefly touching on Ukraine in the wake of the Oct. 27 EU-Ukraine Summit, Vanhanen said that EU membership was still a long way off. However, the EU must continue to emphasize positively Ukraine's European perspectives, and in that regard should quickly work toward a bilateral EU-Ukraine free trade arrangement. PM Yanukovich's return has weakened President Yushchenko, Vanhanen suggested, making it all the more important that the EU "keep Ukraine leaning west." WARE