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