Identifier
Created
Classification
Origin
07BERLIN272
2007-02-11 16:42:00
CONFIDENTIAL
Embassy Berlin
Cable title:  

TREASURY DEPUTY SECRETARY TALKS WITH GERMAN

Tags:  EFIN ETTC PREL GM IZ PK AF 
pdf how-to read a cable
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C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 000272 

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E.O. 12958: DECL: 02/11/2017
TAGS: EFIN ETTC PREL GM IZ PK AF
SUBJECT: TREASURY DEPUTY SECRETARY TALKS WITH GERMAN
FOREIGN MINISTER ON IRAN AND NORTH KOREA, TRANSATLANTIC
INITIATIVE, IRAQ COMPACT, ERP, AND PAKISTAN/AFGHANISTAN

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

C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 000272

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E.O. 12958: DECL: 02/11/2017
TAGS: EFIN ETTC PREL GM IZ PK AF
SUBJECT: TREASURY DEPUTY SECRETARY TALKS WITH GERMAN
FOREIGN MINISTER ON IRAN AND NORTH KOREA, TRANSATLANTIC
INITIATIVE, IRAQ COMPACT, ERP, AND PAKISTAN/AFGHANISTAN

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


1. (C) Summary -- Meeting with Treasury Deputy Secretary
Kimmitt February 8, German Foreign Minister Frank-Walter
Steinmeier discussed that day's EU Troika meeting with the
Pakistani Foreign Minister, Iran and North Korea, Chancellor
Merkel's transatlantic initiative, the Iraq Compact, and
German plans regarding the future of Economic Recovery
Program (ERP) funds. End Summary.

Pakistan/Afghanistan Developments
--------------


2. (C) Steinmeier opened noting the EU Troika had a good set
of meetings earlier that afternoon with Pakistan's Foreign
Minister. The meeting followed the previous week's talks
with Afghanistan's Foreign Minister and enabled the EU to see
their different views of the border situation. The blame
game between the two countries makes no sense, Steinmeier
stated, and both could do more to control/restrict who is
crossing the border. Steinmeier said it could be useful to
invite both countries' foreign ministers to meet on the
margins of the G-8 Foreign Ministers meeting in May, but only
if the arrangements between the two countries were far enough
along. While there are effective intelligence and military
back channels between Afghanistan and Pakistan for dealing
with the border situation, there is no communication or
trust. More is required, Steinmeier continued, if the needed
robust, long-term talks are to materialize. The German
Foreign Minister added that his Pakistani counterpart
confirmed the German view that the situation in southeast
Afghanistan is more unstable than the Afghani had allowed.
Following the discussion with the Pakistani FM on what the
USG and World Bank are doing to promote development in the
tribal areas, Steinmeier said the EU needs to look at what
more they can do along these lines.

Iran and North Korea
--------------


3. (C) Steinmeier appreciated Treasury Deputy Secretary

Kimmitt's remarks noting Steinmeier's strong support in the
GAERC to move implementation of UNSCR 1737 beyond the letter
of the resolution. The German Foreign Minister noted the
need for Russian support and said he had talked with Putin
and the Russian Foreign Minister in December in Moscow about
the UNSC resolution's importance. The Chinese Foreign
Minister and his deputy were recently in Berlin and said they
hoped it would be "a long time" before further UNSC action on
Iran was needed. Steinmeier said he had to disappoint them
on that front; further UNSC action would be necessary. He
also noted the importance of keeping the UN Security Council
together on Iran and of acting "in an astute way."
Steinmeier added there is movement within Iranian society and
that we have to find ways, not just of going at Iran's
leaders, but of reaching these elements within the country.
He is interested in what Supreme National Security Council
Secretary Larijani might announce in the coming days.

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4. (C) Noting the need for continued movement in implementing
UNSCR 1737, Deputy Secretary Kimmitt noted that Javier Solana
told him that full implementation of Resolutions 1695 and
1718 on North Korea had been impede by an issue regarding
implementation in Gibraltar. Treasury Deputy Secretary
Kimmitt emphasized that he hoped this would not happen in the
case of Iran and 1737. (Note: On the margins of the Munich
Security Conference on February 10, German MFA State
Secretary Silberberg told Deputy Secretary Kimmitt that the

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UK and Spain had reached an agreement such that
implementation of sanctions could move forward, not only on
North Korea but also on Iran. End Note.)


5. (C) Steinmeier asked Deputy Secretary Kimmitt about
progress with North Korea. The Treasury Deputy Secretary
noted that Six Party Talks had resumed that day and Treasury
is also on track with its bilateral discussions with North
Korea on Banco Delta Asia. The North Koreans had recently
admitted for the first time that there had been illicit DPRK
transactions conducted through the bank. Treasury Deputy
Secretary Kimmitt emphasized that these discussions are

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taking place on a separate track from the Six Party Talks.


6. (C) Deputy Secretary Kimmitt said Germany should be
careful not just at looking at what a German company exports,
but also at who the parties in a transaction are on the
Iranian side. Export credit guarantees should not make it
easier for Iran to continue its illicit behavior by

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compensating for the greater risk such policies create.
Steinmeier stated the German authorities look carefully at
the contracting parties when determining whether to issue a
license or export credit guarantee. German companies are
doing less business with Iran, regardless of what guarantees
they might be able to obtain from Hermes. The Minister said
three major German companies had contacted him recently about
how they should interact with Iran; he told them restraint
should be the order of the day. Taking legal steps to halt
credit guarantees or business, Steinmeier continued, will not
take us any further in the right direction. It could even
prove counter-productive. The Minister then noted figures
showing a "disproportionate rise" in Iranian trade with India
and China as Western trade with Iran decreases. Gas/oil
exports could account for the change, but the German
government is examining the situation further.

Chancellor's Transatlantic Initiative/Doha
--------------


7. (C) Expressing appreciation and strong support for
Chancellor Merkel's transatlantic economic initiative, Deputy
Secretary Kimmitt said it is important to look at what can be

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achieved by the April 30 U.S.-EU Summit and how the work can
be carried forward after the German Presidency. While there
is much to be done in Berlin and Washington, most of the
ongoing work will need to be done by the Commission.
Treasury Deputy Secretary Kimmitt noted as well the progress
already made with the EU on financial market issues.
Steinmeier said the WTO is the place to deal with tariff and
other trade issues, but the initiative might be the setting
for discussions on issues such as energy and climate. He
noted talks he had with Secretary Rice in December about
working together on developing clean energy technologies.
Turning further to the Doha Development Agenda, Steinmeier
cited WTO Director General Lamy as saying the parties need to
reach an agreement by the end of April.

Iraq Compact
--------------


8. (C) Deputy Secretary Kimmitt noted his recent meeting
with the new UN Secretary General on moving ahead with the
International Compact with Iraq. The UN is looking at
holding a subministerial on the Compact in March, with a
signing ceremony to take place a month or two later. It is
important, he continued, that Germany see it as a key
initiative and work to see it realized, including in helping
convince the Gulf Arab states both to sign and to provide
support and debt relief.

European Recovery Program
--------------


9. (C) Treasury Deputy Secretary Kimmitt raised German plans
regarding the Economic Recovery Program (ERP) funds, noting
the USG is looking at the proposed legislation to see if it
comports with our legal agreements regarding how the funds
will be used. It will be important to ensure as well that
the funds do not become commingled with other funds in the
Kreditanstalt fuer Wiederaufbau (KfW). The KfW holds shares
in state-owned and formerly state-owned companies such as
Deutsche Telekom, Deutsche Post and EADS. The German Foreign
Minister said he understands the U.S. sensitivities on these
points. The funds moved to the KfW would, Steinmeier stated,
continue to be used for the agreed-upon purpose.


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