DUTCH SAY TOO LATE TO REVERSE EIB ACTION ON SYRIA

C O N F I D E N T I A L THE HAGUE 000120

SIPDIS

SIPDIS

STATE FOR NEA/LEA, EB/OFD/IDF, EUR/ERA, EUR/UBI

E.O. 12958: DECL: 01/18/2016
TAGS: ETRD EFIN PREL PGOV SY EUN NL
SUBJECT: DUTCH SAY TOO LATE TO REVERSE EIB ACTION ON SYRIA

REF: STATE 229611

Classified By: ECONOMIC COUNSELOR RICHARD HUFF,
REASONS 1.4 (B) AND (D)


1. (C) Post conveyed reftel demarche January 4 to officials
at the Dutch Ministries of Foreign Relations and Finance. On
January 17, Econoffs followed up with Stefan van Wersch,
Director of the Office for EU External Affairs, Directorate
for European Cooperation, Ministry of Foreign Affairs (MFA).
Other meeting participants included Angeligue Eljpe, Policy
Officer, Middle East Division, Directorate for Regional
Policies and Consular Affairs, MFA, and Farid Boussaid,
Policy Advisor responsible for European Investment Bank (EIB)
issues, Foreign Financial Relations Directorate, Ministry of
Finance (MOF).


2. (C) Van Wersch noted that the Dutch had carefully
considered the concerns raised by the USG and had consulted
with its EU partners before responding. The EIB/Facility for
Euro-Mediterranean Investment and Partnership (FEMIP) loan to
Syria, he explained, had been approved unanimously by the
26-member EIB Board of Directors (representatives from the 25
EU member states and the Commission) based on financial and
economic considerations. Political considerations had not
played a role. The loan fit within the framework of the EU's
cooperative relationship with Syria under the Barcelona
Process and was deemed justifiable from a development
perspective given the benefits to poor regions of Syria from
such a telephone upgrade.


3. (C) Absent any EU sanctions against Syria, the EIB had
acted solely as a financial institution in judging the merits
of the loan, Boussaid added. As a member of FEMIP, Syria had
the right to apply for funding for the project. Disbursement
of the loan's first installment would be contingent upon
Syria's approval of new telecom sector reforms and the
adoption of related international accounting standards.


4. (C) Van Wersch said the GONL understood USG concerns
about "mixed signals" created by such a loan, and the
possibility that the Syrian regime would attempt to spin the
loan deal to its own political advantage. Both van Wersch
and Boussaid acknowledged that the EIB/FEMIP loan should have
raised "alarm bells," as the EIB vote took place the day
after the assassination of Lebanese journalist and
parliamentarian Gibran Tueni. After consulting with its EU
partners, however, the GONL had concluded that a
reconsideration of the loan was not possible at this stage
given the need for unanimity to reverse such a decision. Van
Wersch told Econoffs that the MFA, in close cooperation with
the MOF, would work to ensure that the political aspects of
any future loans or grants to Syria would be a factor in EIB
decisionmaking.
BLAKEMAN