wikileaks ico  Home papers ico  Cables mirror and Afghan War Diary privacy policy  Privacy
IdentifierCreatedClassificationOrigin
07BERLIN271 2007-02-11 16:42:00 CONFIDENTIAL Embassy Berlin
Cable title:  

TREASURY DEPUTY SECRETARY MEETS WITH SENIOR

Tags:   ECON EFIN PREL PTER GM 
pdf how-to read a cable
VZCZCXRO4228
OO RUEHAG RUEHROV
DE RUEHRL #0271/01 0421642
ZNY CCCCC ZZH
O 111642Z FEB 07
FM AMEMBASSY BERLIN
TO RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 6995
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE IMMEDIATE
RUCNFRG/FRG COLLECTIVE IMMEDIATE
					  C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 000271 

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/10/2107
TAGS: ECON EFIN PREL PTER GM
SUBJECT: TREASURY DEPUTY SECRETARY MEETS WITH SENIOR
CHANCELLERY ECONOMIC ADVISOR ON TRANSATLANTIC ECONOMIC
ISSUES


Classified By: EMIN Robert F. Cekuta for Reasons 1.4 (b) and (d)



1. (C) Summary -- Treasury Deputy Secretary Kimmitt
discussed TFTP/SWIFT, terrorist financing, the importance of
open investment policies, and the Chancellor's transatlantic
economic initiative in a meeting February 8 with Jens
Weidmann, Director General in the Chancellery for Economic
and Financial Policy. On TFTP/SWIFT and terrorist financing,
the key point for the Chancellery is to be aware of the
issues involved and push as needed in the coming weeks to
help ensure the necessary progress. Weidmann agreed with the
need to keep countries open to the flow of international
investment capital and said the rise of barriers to such
flows will be an important focus for Germany's G-8
presidency. He stated barriers to foreign investment in U.S.
air carriers, a topic in the U.S./EU civil aviation talks,
remain a concern. On Merkel's transatlantic economic
initiative, Weidmann noted positive reaction in COREPER to
the new German paper (text e-mailed to EUR/ERA) and to moving
forward. He discussed ways to engage policy-makers and
legislators when needed when difficulties over regulatory
issues arise. Weidmann also said the German Government sees
the need to engage more effectively on regulatory issues as
the leading transatlantic economic project for the coming
years. End Summary.

SWIFT/Terrorist Financing/Iran Sanctions


--------------------------





2. (C) Deputy Secretary Kimmitt said he had good discussions
with the various German Ministers and State Secretaries on
TFTP/SWIFT and implementing UNSCR 1737 concerning Iran's
nuclear proliferation activities. On TFTP/SWIFT, EU
Commissioner Frattini had suggested that Kimmitt come to
Berlin. Talks on TFTP/SWIFT are moving in a good direction
substantively. Treasury Deputy Secretary Kimmitt said the
objective is to reach an understanding on the substance and
memorialize it in an exchange of letters. Frattini suggested
that a binding agreement might be more appropriate. Weidmann
agreed neither side would want questions about SWIFT coming
up at the U.S.-EU Summit. While there is nothing specific
the Chancellery needs to do at the moment, Kimmitt said it is
important the Chancellery keep the process of reaching a
solution moving ahead. He also stressed the need to keep
cooperating on the overall objective of stopping terrorists
from abusing the global financial system; terrorists' money
is killing NATO soldiers in Afghanistan and elsewhere.



3. (C) On Iran sanctions, Treasury Deputy Secretary Kimmitt
pointed to the progress that is being made in implementing
UNSCR 1737 and noted the contributions German officials had
made in this regard. It is important this progress continue.

Keeping Countries Open to Foreign Investment


--------------------------





4. (C) The Deputy Treasury Secretary mentioned that he would
be speaking on Monday in Frankfurt about open investment.
Weidmann raised the ongoing U.S./EU civil aviation talks and
asked why the U.S. would not allow greater foreign investment
in its civil air carriers. Deputy Secretary Kimmitt reviewed
Administration efforts to address this situation. He noted
while media and airlines are the only two areas in the U.S.
where foreign investment is excluded, there is worrying
international trend to raise new barriers against investment.
Although Germany has been open to foreign investment,
problems exist within Europe as a whole and there are
significant barriers to investment in China, Russia, India,
and other key emerging markets. Weidmann raised questions
about the CFIUS process in the U.S. and moves in Congress to
restrict foreign investment. He also argued German companies
such as Deutsche Telekom should not be treated differently
from other, fully privatized entities. Weidmann added
barriers to foreign investment would be a topic for Germany's
G-8 presidency. Deputy Treasury Secretary Kimmitt noted
Administration positions on measures being debated in
Congress. He also pointed out that U.S. companies coming to
Germany to compete against entities such as Deutsche Telekom
or Deutsche Post have found it difficult to enter the German
market. Such issues could be topics for the Chancellor's
transatlantic initiative.

Chancellor Merkel's Transatlantic Economic Initiative


--------------------------



--------------------------





5. (C) Weidmann noted any initial objections to the
Chancellor's initiative in the German ministries have been
overcome and that the previous day's discussion of the new
German paper in COREPER had been positive. The Commission

BERLIN 00000271 002 OF 002


and the member states are on board with the general vision
and the new paper. He agreed with Deputy Secretary Kimmitt
that in addition to looking to include the initiative among
the deliverables for the April 30 U.S.-EU Summit, a key
concern is ensuring the work is carried forward in future
presidencies. It is important what structures are set up and
that there needs to be provisions to engage the policy level
and legislators when necessary and appropriate to resolve
differences or move things along. Weidmann said the
Commission would be responsible for carrying the initiative
forward. Raising the U.S. response to the paper, Weidmann
said he did not find it "too courageous." He noted Germany
sees the initiative for engaging on regulatory issues as the
transatlantic economic project for the coming years.



6. (C) Treasury Deputy Secretary Kimmitt pointed to the
Financial Markets Regulatory Dialogue as an example for how
to proceed in other areas. Weidmann highlighted the need to
engage both sides of the Atlantic on issues arising after
regulations are established, on handling areas that are not
yet regulated, and to accelerate cooperation. If regulators
are unable to find agreement, then there needs to be a
mechanism to bring an issue to the attention of policy makers
and legislators, Weidmann argued. Deputy Secretary Kimmitt
noted the asymmetry between the U.S. system of separate
Congress and Executive and the parliamentary systems in
Europe. We might look at other mechanisms, e.g., the
Transatlantic Policy Network or the TABD, as means to bring
parties together or to alert different levels to emerging
regulatory issues. Weidmann said it may not be the right
course to involve legislators too early in too great a level
of detail, but some level of lawmakers' engagement in
bringing the two sides' regulators together is important, to
which the Deputy Treasury Secretary agreed.



7. (C) Looking ahead, Treasury Deputy Secretary Kimmitt said
the new German paper (to COREPER) was a significant
improvement over the initial one. However, the two
acknowledged there was now an asymmetry between the USG and
German papers. He suggested the USG would now need to look
at a new response taking into account both the procedural as
well as the substantive points.



8. (U) Treasury Deputy Secretary Kimmitt has cleared this
message.
TIMKEN JR