PRESIDENT BACHELET TOUTS CHILE'S TIES WITH EUROPE

C O N F I D E N T I A L SANTIAGO 001042

SIPDIS

SIPDIS

STATE FOR WHA/BSC

E.O. 12958: DECL: 05/15/2016
TAGS: PREL PGOV VZ CI
SUBJECT: PRESIDENT BACHELET TOUTS CHILE'S TIES WITH EUROPE
DURING VISIT TO SPAIN, AUSTRIA

REF: A. SANTIAGO 00929


B. 05 SANTIAGO 02558

C. SANTIAGO 01034

Classified By: Ambassador Craig A. Kelly. Reasons: 1.4 (b and d).


1. (C) Summary: President Bachelet traveled to Spain,
Bosnia-Herzegovina and Austria May 8-14 on her first official
visit to Europe as president. During a state visit in Spain,
Bachelet and Spanish President Zapatero signed a "strategic
alliance agreement." After visiting Chilean PKO troops in
Bosnia-Herzegovina, Bachelet attended the Latin
America-Europe Summit in Austria and held a number of
bilateral meetings there. Bachelet reportedly referred to
the EU as "Chile's most important partner outside of Latin
America," and the EU urged Chile to promote its successes in
the region. Some members of the Chilean press have picked up
on this theme and have suggested that Chile become more
active in the region. Bachelet and Chavez discussed possible
Chilean participation in the Venezuelan oil sector, but did
not discuss Venezuela's UNSC candidacy, according to a senior
Foreign Ministry official who accompanied Bachelet. During
her meeting with Bolivian President Morales, Bachelet
restated Chile's desire to conduct relations in an
environment "free of restrictions and demands." The GOC was
surprised by Morales' decision to nationalize hydrocarbons,
knowing it would pick a battle with Brazil, and is concerned
the issue may impact regional stability. End summary.

First European Visit
--------------


2. (U) In her first trip to Europe as president, Michelle
Bachelet traveled to Spain, Bosnia and Herzegovina, and
Austria May 8-14. During a state visit in Spain, Bachelet
met privately with Spanish President Zapatero, attended a
state dinner, and met with Spanish companies with interests
in Chile. According to a statement issued by La Moneda
presidential palace, Bachelet and Zapatero signed a
"strategic partnership agreement" to strengthen economic,
cultural and political cooperation. After a brief stopover
in Bosnia and Herzegovina, where she met with Chilean
peacekeeping troops serving under EUFOR, Bachelet traveled to
Austria to attend the EU-Latin American/Caribbean Summit.
There, Bachelet held bilateral meetings with the leaders of
Bolivia, Brazil, Ecuador, Finland, Germany, Poland, Peru,
Venezuela, and the United Kingdom, in addition to UNSYG Annan.


3. (C) During the press conference following her meeting with
EU officials, Bachelet called the European Union, "Chile's
most important partner outside of Latin America." In
addition to sharing similar economic, political and social
orientations, Chile and European nations "share similar
visions about multilateral institutions, free trade and
governance via coalitions." EU President Barroso highlighted
Chile's successes and urged the GOC to use its influence to
promote those successes in the region. Some Chilean press
have picked up on these statements and are suggesting that
Chile become more active in the region. Foreign Ministry
Director General Carlos Portales told the Ambassador on May
16 that the GOC did not feel put out by such statements.
Bachelet announced Chile would co-host a civil society
meeting with the EU in the future. She also noted that GOC
and EU officials would convene technical talks later in May
to explore further trade liberalization.

Chavez' Charm Offensive
--------------


4. (U) Bachelet's May 11 bilateral meeting with President
Chavez and other encounters in Vienna received considerable
press coverage here. These include photos of the Venezuelan
leader placing his hands on Bachelet's shoulders and leaning
his head on her head while the leaders were lining up for an
official photo. During their one-hour bilateral meeting on
May 11, Bachelet and Chavez "discarded ideology" and
discussed "bilateral issues and regional integration,"
according to a statement issued by La Moneda. Unnamed GOC
officials were quoted as saying that Bachelet and Chavez
discussed social programs in Chile and Venezuela, and energy

issues within a regional context.


5. (C) On the latter, FM Foxley told the press after the
meeting that Bachelet and Chavez discussed possible Chilean
cooperation with Venezuela in that country's oil sector, "We
(Chile) want ENAP (Chile's state-owned oil company),in
conjunction with the appropriate Venezuelan agency, to
explore if they can work together." Foxley explained that
there are "areas in Venezuela where surveys of new fields
could be realized." (Comment: This is not the first time we
have heard of possible Chilean participation in the
Venezuelan oil sector. Former Deputy FM Barros informed the
Ambassador in December that Chile would increase temporarily
its oil imports from Venezuela due to a decrease in Argentine
exports to Chile and a lack of other viable alternatives
(reftel B). End comment.)


6. (C) According to the Chilean press, Chavez did not press
Bachelet to support Venezuela's UNSC candidacy -- a decision
the Chilean press attributed to Chavez' desire not to spoil
efforts to establish friendly relations with President
Bachelet at a time when, "Chile does not want to upset
relations with Washington." Foreign Ministry Director
General for External Relations Carlos Portales confirmed to
the Ambassador late May 16 that Chavez did not raise the UNSC
seat issue (reftel C). Chavez's public response to a press
question about Bolivia's demands for access to the sea ("We
have decided to respect the bilateral nature of the issue")
was interpreted in Chile as another indication of Chavez'
desire to avoid confrontation with Chile.


7. (U) Responding to a question during her joint press
conference with Zapatero in Madrid, Bachelet dismissed the
idea that an alliance between Venezuela, Bolivia and Cuba
would destabilize the region, adding that she did not want
"to return to the Cold War era and demonize one or other
countries." During a subsequent press interview in Vienna,
Bachelet denied that the different political and economic
models pursued by Chile and Venezuela would provoke a
division in South America. On the same day, FM Foxley told
the press that Bachelet had been clear in telling Chavez that
"Chile has a way of doing things that sometimes can be
different from the ways others do things." That said, "Chile
is a friendly country that will not judge anyone. We are
going to respect the path that another country chooses,"
Foxley added.

Bolivia/Andean Free Trade
--------------


8. (U) Following her meeting with President Morales of
Bolivia, Bachelet reiterated her desire to conduct relations
in an environment "free of restrictions and demands", and one
that takes into consideration "existing instruments" (i.e.
international treaties). In perhaps even stronger terms, FM
Foxley said that "nobody is going to impose anything on us
that is unreasonable and that does not protect Chile's
interests." MFA Director General for External Relations
Portales told the Ambassador on May 16 that Chile was
surprised by Morales' decision to pick a battle with Brazil
over the hydrocarbon issue, and noted the GOC was concerned
the issue may impact regional stability. Portales added that
Chavez's inflammatory statements about the Andean Free Trade
Agreement with the U.S. were also worrisome.

Reactions
--------------


9. (C) Foreign Ministry Special Policies Director Luis Winter
told EPOL Counselor on May 17 that Foreign Ministry officials
had not been briefed in detail on Bachelet's meetings in
Europe. Winter said MFA Director General for External
Relations Portales was scheduled to brief him and other
Foreign Ministry directors later that day (May 17). Winter
characterized the post-visit mood in the Foreign Ministry as
upbeat, noting that the MFA was pleased with the positive
words European leaders had for President Bachelet and Chile.


10. (C) Our local diplomatic colleagues are also awaiting
readouts from capitals. The Polish Ambassador told EPOL

Counselor that Polish President Kaczynski's talking points
included the Venezuelan UNSC issue. The Spanish DCM said
that Madrid's points included concerns about Venezuela and
Chavez in general. Neither knew if the talking points were
used.

Comment
--------------


11. (C) Bachelet's first two official visits abroad as
president are indications of her desire to strengthen -- or
reaffirm -- relations with MERCOSUR countries and the EU.
The EU's glowing statements about Chile's successes, and its
urging that Chile promote these successes in the Hemisphere,
are positive and consistent with the messages we have been
delivering to the GOC. We do not yet know if any of the
Europeans delivered any messages to Bachelet on Venezuela and
the upcoming UNSC elections.
KELLY