TRUTH TO POWER: KALVITIS SPEAKS BLUNTLY TO PUTIN

C O N F I D E N T I A L RIGA 000870 SIPDIS SIPDIS NOFORN E.O. 12958: DECL: 10/23/2016 TAGS: PREL ENRG RS LG SUBJECT: TRUTH TO POWER: KALVITIS SPEAKS BLUNTLY TO PUTIN ON OIL AT LAHTI REF: A) HELSINKI 1058 B) VILNIUS 953 C) RIGA 852 AND PREVIOUS Classified By: Ambassador Catherine Todd Bailey. Reason: 1.4 (D) ¶1. (C/NF) Summary: According to the Latvians, PM Kalvitis got to the heart of the matter with Russian President Putin at the EU dinner in Lahti on October 20, asking why, if energy was not a political tool, there is no Russian oil in the Latvian port of Ventspils and the Lithuanian facility of Mazeikiu Nafta. Putin reportedly responded by asking if Kalvitis really thought he controlled the flow of Russia's oil, to which Kalvitis responded affirmatively. Afterwards, Kalvitis asked Putin to move forward quickly to get the recently agreed bilateral intergovernmental commission up and running. The Latvian take on the dinner, at which only a handful of EU leaders spoke, is that the EU at 25 (or more) will not defend Latvia's interests vis-a-vis Russia, but Latvia will continue to work with key partners, like Germany, to build the bilateral relationship with Russia. End summary. ¶2. (C) PM Kalvitis' foreign policy advisor Peteris Ustubs provided pol/econ chief October 21 a readout on the EU dinner with Russian president Putin in Lahti the previous evening. (ref A) Ustubs acknowledged that the dinner was leaders only and he was relaying the PM's account, but he had heard the same readouts from colleagues from other countries. ¶3. (C) Ustubs said that earlier in the day, the leaders had agreed that they needed to speak with one voice and raise all the issues, including the hard ones. Ustubs cited Georgia, energy and the new NGO law as issues that were specifically discussed among the leaders as being important to raise with Putin. The Finnish Presidency, in its opening remarks, did indeed raise many of these issues but only in "a passing way," according to Ustubs. He said it was more a laundry list and not designed to facilitate a discussion. ¶4. (C) Ustubs reported that Poland, Estonia, Latvia, and Denmark, among others, took the floor to speak. Pol/econ chief asked whether Lithuania had spoken as well (ref B),but Ustubs said they had not. He said that Danish PM Rasmussen raised Chechnya and someone else (he didn't know for sure whom) asked about Ukraine. To this, Putin apparently replied that "you (presumably meaning the EU and U.S.) created the Orange Revolution" and now must live with its consequences. He continued along the lines of "why should I continue to support their economy with low gas prices?" and asked rhetorically if anyone in the EU was willing to support the Ukrainian economy as Russia was doing through energy subsidies. ¶5. (C) Latvian PM Kalvitis took the floor last and spoke to Putin in Russian, saying that he wanted to take the President at his word that Russia does not use energy as a political weapon, but asking why then there is no flow of oil to the Latvian port of Ventspils and Mazeikiu Nafta facility in Lithuania since their use makes sense economically. Putin reportedly replied tartly by asking if Kalvitis thought Putin personally controlled the flow of Russian oil, to which Kalvitis said he did. Ustubs said that following the dinner, several EU leaders commended Kalvitis for saying "the right thing at the right time." ¶6. (C) Following the dinner, Kalvitis had a short (5 - 7 minutes) discussion with Putin, asking for rapid establishment of the recently agreed bilateral intergovernmental commission, noting that it was a good forum for discussing issues like oil. Putin did not specifically respond. The planned three-way discussion including German Chancellor Merkel did not materialize due to scheduling issues (ref C). ¶7. (C/NF) Ustubs noted that this was the first time a Latvian PM had joined an EU meeting with the Russian leadership at ¶25. Asked what the PM's reaction to the discussion was, Ustubs replied that Kalvitis' experience at the dinner had reinforced his existing view that the EU at 25 will not defend Latvia's interests with Russia. Latvia needs to count on support from specific partners, like the relationship with Germany they have developed, to advance the bilateral relationship with Russia. BAILEY