SCENESETTER FOR U/S BURNS VISIT TO ATHENS JUNE 9-12

C O N F I D E N T I A L SECTION 01 OF 02 ATHENS 001185

SIPDIS

SIPDIS

FOR U/S BURNS FROM AMBASSADOR RIES

E.O. 12958: DECL: 06/06/2017
TAGS: PREL PGOV OVIP
SUBJECT: SCENESETTER FOR U/S BURNS VISIT TO ATHENS JUNE 9-12

REF: ATHENS 1131

Classified By: AMBASSADOR CHARLES RIES. REASON: 1.4 (B) AND (D).


1. (C) Nick: Welcome back to Athens! The Embassy -- and
your many Greek friends -- are delighted to have you as the
keynote speaker at our June 11 celebration of the sixtieth
anniversary of the Marshall Plan. In addition to your public
speeches and press events, your visit will propel bilateral
cooperation on several key issues -- including Kosovo final
status, Macedonia's NATO prospects, and energy diversity.

ELECTIONS MAKE COMPROMISES DIFFICULT . . .


2. (C) Greece is in pre-election mode, whether the
elections take place in the fall (as predicted) or in spring
2008 (as mandated). Both PM Karamanlis and opposition PASOK
President Papandreou are spending more time in far-flung
localities to shore up support. This spring's bond scandal
has dented the New Democracy government's "anti-corruption,
good management, reform" image; polls have reduced ND's
steady lead over PASOK from 3 percent to 1 percent.
Karamanlis continues to have the edge, but is no longer the
sure bet that he was at the beginning of the year. Even if
he ekes out a win, he will have a smaller majority in
Parliament, making future reform more difficult.


3. (C) With the numbers so close, some may try to make
Greece's relationship with the U.S. an issue in the
elections. We want to avoid that; the election is about
Greece and its future. In my own discussions, I have urged
GOG officials to develop a strategic vision, to look beyond
Athens to the global issues we must tackle together. But
there is no denying that electoral sensitivity will make it
harder -- at least in the short term -- for the GOG to make
compromises on long-standing policies. Every decision will
be weighed against the number of votes it might win or lose.

. . . ON MACEDONIA/NATO . . .


4. (C) As we noted last week (reftel),the GOG is in danger
of (once again) painting itself into a corner over
Macedonia's name. The PM and Dora have signaled that the
Greek commitment to the 1995 Interim Agreement is weakening.
The change is not solely due to the ND government's need to
win votes in the Greek province of Macedonia. Karamanlis is
personally aggravated by what he says is a harder, more
nationalistic line from the current Macedonian government.
The GOG sees Macedonia's NATO membership as one of the few
levers it still wields with Skopje. With a NATO expansion
decision due this spring, the GOG has embarked on a high-risk
strategy to press Skopje to compromise. Key to their
strategy: their conviction that only pressure by the U.S. on
Macedonia can get that compromise.


5. (C) During your visit, Greek officials will ask for U.S.
pressure on Skopje. We have already warned them of the
dangers their strategy presents, and urged them to reaffirm
their commitment to the Interim Agreement. They need to hear
it from you. They may also press for assurances that the
U.S. does not plan to insist on Macedonia's eventual
accession to NATO as "Republic of Macedonia" -- a rumor that
has gained considerable press currency recently.

. . . ON KOSOVO . . .


6. (C) Greek officials (and the press) will be particularly
interested in your views on developments regarding Kosovo's
final status. The GOG has consistently argued for "more
time" to reach an agreement that both sides can buy into. At
the same time, they have said they will support EU consensus
(should it prove possible). Stability in the region is their
over-riding concern; whatever the outcome in New York and
Brussels, we will want to encourage them to act in the
interests of preserving that stability.

. . . AND ENERGY DIVERSITY


7. (SBU) Greece finds itself in an unusually influential
position regarding global energy flows. This year it will
complete the construction of a 8-12 bcm natural gas
interconnector with Turkey, which by 2010 will cross Greece
and connect to Italy. Greece, which receives 80% of its
natural gas imports from Russia's Gazprom (through a contract
expiring in 2016),has stated that it intends to source
supply for this interconnector from Azerbaijan's Shah Deniz
condensate field, making it the first non-Russian controlled
route for Caspian natural gas to reach Western Europe. This
development has not escaped the notice of the Russians. As a
result, for the last 18 months Greece found itself in the
cross hairs of an intense Gazprom-led effort to lock up the

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Italy-Greece pipeline with a long-term contract exclusively
for Russian natural gas, blocking out the Azeri gas from
Western Europe. The Embassy, with support from Washington
agencies, has been actively promoting with Greece the need to
contribute to increased European energy security and
diversification. It will be useful for you to reinforce U.S.
appreciation for Greece's courage in standing up to Russian
pressure on gas issues.
RIES