SCENESETTER FOR CODEL LANTOS VISIT TO ROMANIA,

UNCLAS SECTION 01 OF 02 BUCHAREST 000192

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/NCE AARON JENSEN AND H MARK SMITH; MOSCOW
PLEASE PASS TO CODEL LANTOS CONTROL OFFICER

E.O. 12958: N/A
TAGS: OREP PREL PGOV RO
SUBJECT: SCENESETTER FOR CODEL LANTOS VISIT TO ROMANIA,
FEBRUARY 23-24.

REF: BUCHAREST 00147

1.(SBU) Embassy Bucharest warmly welcomes your visit to
Romania. Some things have not changed since you last visited
Bucharest almost six months ago. Romania continues to show
dynamic economic growth and the US-Romanian friendship and
partnership in addressing common threats and interests is
second to none. The domestic political environment, on the
other hand, has deteriorated significantly since last August.
Within weeks of Romania's accession to the EU on January 1,
the center-right coalition government, already hamstrung by
sharp conflicts between President Traian Basescu's
Democratic Party (PD) and Prime Minister Calin Pospescu
Tariceanu's National Liberal Party (PNL),suddenly confronted
a strong challenge from the opposition.


2. (SBU) The Social Democratic Party (PSD),led by former FM
Mircea Geoana, and backed by other figures like
former-President Ion Iliescu, accused Basescu of
authoritarianism and various alleged violations of the
Constitution. On February 12, the PSD filed a motion to
suspend President Basescu from office for 30 days and force a
popular referendum on his Presidency. There are apparently
sufficient opposition votes in Parliament to make the threat
a real one. Analysts see a distinct possibility of Romania
entering a period of political instability and government
paralysis.


3. (SBU) Parts of Basescu's political problems are
self-made; he was described famously by one opposition
politician as "a lone wolf" and his style is direct and
confrontational. But he cannot be counted out of the fight.
He retains a level of popular support that is unmatched by
any other single politician in Romania. It remains to be
seen, however, whether he can face down both his critics
within the governing alliance (including a Prime Minister who
has considerable authority as the head of government),his
diehard opponents in Parliament on both the right and the
left, and the business and political-media oligarchs who
resent what they argue are Basescu's selective targeting of
corruption investigations. (The President and his closest
aides deny they interfere in the prosecutorial realm,
insisting that judges and prosecutors are making independent
judgments for the first time.) This same configuration of
center-left politicians from the last government, former
Communists, right-wing nationalists and regional "barons" are
also trying to unseat the Minister of Justice, whose efforts
to fight corruption and reform the judiciary have earned
plaudits both in Brussels and in Washington.


4. (SBU) The bottom line is that just a month after its
entry into the European Union, Romania is facing the prospect
of months of domestic political uncertainty and instability
that could raise anew questions about the country's readiness
to move beyond its legacy of post-Communist, oligarchic
business and political interactions. The good news is that,
for the moment, there is still broad acceptance in the
political class and among Romanians as a whole, in the
importance of Romania's strategic partnership with the U.S.
So far, the current political instability has stayed within
legal and constitutional bounds, however torrid the rhetoric
and vivid the theatrics.


5. (SBU) Meanwhile, we have emphasized that, while we cannot
comment on the constitutional debate itself, it is important
that the political issues be worked out democratically,
transparetly and responsibly. We want to encourage Romania
to build on the progress it has made in recent yeas in
fighting corruption and strengthening the rle of law. We
want to discourage a turn of events politically which would
leave irresponsible actors like the extremist head of the
"Greater Romania" Party in a position to benefit from the
turmoil. We want responsible political leadership to sit
down together and talk about their future and consider the
consequences of a political implosion and the unintended
results that could follow. With one of the fastest growing
economies in Europe, a talented workforce, and a strategic
location on the Eastern rim of both NATO and the EU, Romania
has a lot of positives with which to work, if only its
political class can overcome its reliance on selfish,
zero-sum politics.


6. (SBU) There is still much other work to do. Human rights
concerns continue to linger, including discrimination against
minorities, like the Hungarians, the Roma, homosexuals, along
with a continuing legacy of anti-Semitism. The government
recently passed a Law on Religions that provides government

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support only to well-established religions and discriminates
against smaller groups by imposing burdensome registration
requirements. There has been agonizingly slow movement on
post-communist property restitution, especially affecting the
Greek Catholic Church. While progress has been made in
promoting broader acknowledgment of Romania's Holocaust
history, anti-Semitism remains a rallying cry for certain
right-wing politicians. Inter-country adoptions remain
blocked under Romania's 2005 law.


6. (SBU) The government of President Traian Basescu is
anchored on a strong strategic partnership with the United
States, with a focus on maintaining an outward-looking
transatlantic foreign policy. Romania continues to deploy
around 2,000 troops abroad with NATO and Coalition-led
operations in Afghanistan, Iraq, and the Balkans. Still,
some political actors, including influential members of
Tariceanu's Liberal Party, oppose the Romanian commitment in
Iraq. You may recall last June when the Prime Minister,
pushed by radicals in his Liberal Party who sought to
embarrass Basescu, announced a plan to withdraw Romanian
troops from Iraq without consulting the President or
Romania's allies. While Basescu and Defense Minister
Frunzaverde recently have confirmed Romania will continue to
meet its commitments in Iraq, some still hope to foster a
parliamentary debate over Romania's troop deployments. Your
visit is an opportunity to emphasize that EU membership and a
strong strategic partnership with the United States are
perfectly compatible.


7. (SBU) While Romania has carefully fostered a close
bilateral security and political relationship with the U.S.,
our economic and commercial relationship still has plenty of
room to grow. Since 2000, the Romanian economy has
accelerated markedly, enjoying four to eight percent growth
each year. Recently, there have been encouraging signs for
U.S. investment. Many American companies are in Romania and
are doing well. Microsoft, Oracle, Timkin, Colgate
Palmolive, Smithfield Foods and Hewlett Packard have all made
recent substantial investments here. Along with IBM, both
Ford and GM are looking at further large investments in
Romania. Although hurt by delays, misperceptions, and
misunderstanding, construction continues on the nearly 3
billion USD Bechtel highway project through Transylvania.


8. (SBU) We continue to work closely with the government to
help build industry's confidence in Romania's future.
Following EU accession, however, the legacy of corruption and
slow economic reforms continues to impede U.S. investment in
Romania. Poor infrastructure and labor rigidities also
contribute. You may wish to encourage GOR officials to work
more closely with foreign investor groups like Amcham to
adopt growth-promoting policies and to focus greater
resources on infrastructure and stronger anti-corruption
measures as a means of attracting greater foreign investor
interest. The passage of investigation and accountability
laws to address issues related to conflict of interest,
especially for the stalled legislation establishing a
National Integrity Agency, would do much to increase
investors, and citizens, confidence in Romania. Your voice
on the issue of combating corruption and promoting a Romania
for everyone, and not just for economic and political elites,
will have resonance throughout the nation.


9. (SBU) Finally, while we must be careful not to interfere
in the ongoing political showdown between Basescu and the
opposition -- with the Prime Minister operating somewhere in
the middle -- you may have an excellent opportunity in your
meetings to make the point that Romania needs political
stability in order to continue to make progress. In
particular, the efforts both we and Brussels have encouraged
to foster justice reform and combat corruption need to keep
moving forward. For the sake of its credibility as a NATO
and EU member, and for its prospects in attracting investment
to an economy that is only now starting to show real
dynamism, Romania cannot afford to go back to a
post-Communist, only semi-reformed future.
TAUBMAN