EU-RUSSIA SUMMIT IN PORTUGAL

C O N F I D E N T I A L SECTION 01 OF 03 LISBON 002771

SIPDIS

NOFORN
SIPDIS

E.O. 12958: DECL: 10/10/2016
TAGS: PREL EUN PGOV RS IR PO
SUBJECT: EU-RUSSIA SUMMIT IN PORTUGAL

REF: LISBON 2714

Classified By: POL CHIEF TROY FITRELL, REASONS 1.4 (B,D)


1. (U) Summary. At the EU-Russia Summit in Portugal October
26, Russia committed to invite the OSCE to observe the
December 2 Duma elections. On missile defense, Putin
compared the U.S. proposal to the USSR placing offensive
missiles in Cuba. This line garnered much press coverage,
which ignored the more positive public tone Putin took on the
issue in which he underscored U.S.-Russia cooperation. The
summit focused heavily on trade and economic matters, with
principals particularly pleased about an early warning system
related to Russian energy supplies to the EU. Putin
surprised his summit interlocutors with a proposal to
establish a Russia-EU Human Rights Institute, in which, Putin
declared, Russia could help the EU on human rights issues.
End summary.


2. (U) The EU-Russia Summit was held October 26 in Mafra,
Portugal. Representing the European Council, Portuguese
Prime Minister Socrates hosted the event, with the
participation, inter alia, of European Commission President
Jose Manuel Durao Barroso and Secretary General/High
Representative Javier Solana. Russia was represented by
President Vladimir Putin. At the summit's closing ceremony,
each of the four principals made a statement followed by the
signing of two agreements and then a press conference.
Socrates spoke in Portuguese, Putin in Russian, and Durao
Barroso and Solana in English.


3. (U) As reported reftel, the summit included a working
session of two hours followed by a 90 minute lunch. The
working session was dedicated to the four EU-Russia common
spaces: economic, justice/security, external security, and
research/education. The lunch was dedicated to such regional
and international issues as Kosovo, Iran, the Middle East
Peace Process, and Burma. In the press conference, Putin
said that the principals "were unanimous" on the regional and
international issues in that "international law was
paramount."


4. (C/NF) Portuguese MFA Political Director Vasco Bramao
Ramos told us that the Portuguese interpretation of the lunch
discussion was that each side had made its standard points
and that neither side had yielded.

OSCE Observers
--------------

5. (U) During opening statements at the beginning of the
press conference, Socrates and Barroso each stressed their
pleasure that Putin had confirmed his intention to issue an
invitation to the OSCE to observe Russia's December 2 Duma
elections. Socrates noted that such an agreement "builds
trust." During the press conference itself, however, Putin
ignored a question regarding the date the OSCE could begin
its mission and what its mandate would be.


6. (C/NF) Immediately following the press conference,
Ambassador Bramao Ramos told us privately that Putin had
promised to send the invitation letter to the OSCE that day
or the next (October 26 or 27). Bramao Ramos said the
Russians had told him privately in his recent trip to Moscow
that an extended OSCE mission of 90 days would be insulting
to a developed member state of the OSCE. Bramao Ramos
continued that "They are not an emerging country, you know.
I can understand the point of view." He said the Russians
had admitted to him that their delay in responding formally
to the OSCE was a tactic to eliminate the kind of full-scale
mission the OSCE wished to conduct.

Missile Defense
--------------

7. (C/NF) As noted reftel, Portuguese interlocutors confirmed
that Russia wanted Missile Defense (MD) and CFE negotiations
on the agenda, but that the EU refused, citing other fora as
more appropriate discussion venues.


8. (U) During the press conference, however, a Portuguese
journalist asked Putin if Russia would accept recent U.S.
offers to cooperate on MD. Putin responded that the current
disagreement stemmed from the U.S. withdrawal from the
Anti-Ballistic Missile Treaty (ABM). Putin then compared the
placement of an MD system near Russia's borders with the
Soviet attempt to place missiles in Cuba in the 1960s, which
led to crisis. Putin noted, however, that relations between
the U.S. and Russia have become much stronger, citing his
personal friendship with President Bush. Putin also
commended the recent visit of Secretaries Rice and Gates for

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clarifying that the USG heard the Russian government's
concerns.


9. (U) Putin suggested that the efforts on both sides have
led the MD discussion to an appropriately technical level.
Russia had, said Putin, put forth some proposals and was
waiting for the U.S. response. Putin also noted that Russia
had proposed an information sharing mechanism, situated in
Brussels or elsewhere, to facilitate cooperation on security
issues.

Commerce and Energy
--------------

10. (U) Each of the principals stressed that EU-Russia trade
has grown five fold over the last seven years. Putin added
that Russia represented the EU's third largest trading
partner and the EU represented Russia's largest trading
partner. Socrates noted that commerce formed the cornerstone
of the EU-Russia relationship. Indeed, Socrates opined that
the business relationship was so good, it would take a while
for the political relationship to catch up.


11. (U) Putin noted that observers suggest Russia's economy
consists only of petroleum, but that this is a false
assessment. Russia, he said, had recently passed Italy in
GDP, was gaining on France, and two thirds of its recent
growth was not energy related. Putin noted Russia's desire
to invest in the EU's energy infrastructure. He compared the
30 billion euros that European companies have invested in the
Russian energy sector with the 3 billion euros Russian
companies have invested in the EU's energy sector, suggesting
that media commentary on Russian buyouts of European
companies was greatly exaggerated.


12. (U) All principals commented on the early warning system
on supply and demand of Russian energy to the EU agreed to in
principle in Brussels earlier in the week. As on other
topics, Barroso opined that the system would build trust.

WTO
---

13. (U) Barroso noted that Russia's WTO accession was pending
two purely technical issues, one of which was wood export
duties (the other was not cited). Socrates noted that the EU
had always supported Russia's WTO accession and that process
was coming to an end. Putin then stated, however, that while
hopeful on WTO accession, Russia would not join the WTO if
negotiators could not recognize the frailty of the emerging
Russian economy.

Deliverables: Steel and Narcotics
--------------

14. (U) During the press conference, two agreements on steel
trade and counter-narcotics cooperation were signed. The
Agreement on Trade in Certain Steel Products was signed by
Portuguese Foreign Minister Luis Amado, European Commissioner
Peter Mandelson, and Russian Minister for Economic
Development and Trade Elvira Nabiullina. The Memorandum of
Understanding between the European Monitoring Centre of Drugs
and Drug Addiction and the Russian Federal Drug Control
Service was signed by the Director of the European Monitoring
Centre Wolfgang Gotz and the Director of the Russian service
Viktor Cherkasov.

Putin's Future
--------------

15. (U) After Socrates, Barroso, and Solana all made
extensive references to Mafra being Putin's last summit,
Putin himself added wryly that he could not tell if his three
colleagues were pleased about this or not. In response to a
question regarding his political future, Putin said he had
made no decision on a future job, but made the following
points: "I will not change the Constitution for my own
needs," "I will not run for President in March," "I will not
change the structure of authority," and "I will not transfer
powers to the Prime Minister as long as it is my decision."

Human Rights and a Surprise Proposal
--------------

16. (U) All principals noted that Putin had tabled a proposal
to establish a Russia-EU Human Rights Institute. The three
participants representing the EU expressed agreement with the
basic concept of such a proposal, but noted they had to study
the details. Putin asserted that the EU has long supported
similar organizations in Russia, so it was now time for
Russia to do likewise to help the EU with human rights
problems across the continent. Putin suggested Brussels as
the site of such an institute, but said he would agree to any
other European city as well.

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17. (U) A Portuguese journalist asked Socrates if his
decision to minimize human rights as a summit topic in order
to ensure a friendlier summit atmosphere had "paid off." A
visibly angry Socrates denied that he had minimized human
rights as a topic, stating that it had been discussed.
Socrates then cited the proposed institute as a way to
protect human rights in both blocs. He added that the EU and
Russia indeed had differences, emphasizing that "this is why
we have summits."


18. (U) Regarding the death of Russian journalist Anna
Politkovskaya, an Itass reporter pointed out that the
suspected killer of another journalist was living in Sweden.
He asked Barroso if the EU would pressure Stockholm as
strongly as it pressures Moscow, given that Sweden has
refused to extradite the suspect. Barroso responded
forcefully that the Politkovskaya case had not been fully
investigated and that it was incumbent on Moscow to do so.
Free speech and a free press were non-negotiable, he said.
Barroso admitted that he was not familiar with the Swedish
case, but noted that extradition was a bilateral issue and
that no one had any doubts about the rule of law in Sweden.
Putin added that his government would investigate all crimes,
but he expressed disappointment that Sweden had refused to
extradite a suspected murderer.

Other Notes
--------------

19. (U) Other points raised at various points during the
summit include:

--Solana said he had met with the Iranians recently in Rome
on the issue of enrichment of uranium and noted that he would
meet with them again before the end of November.

--Commissioner Ferrero-Waldner told journalists that she
hoped negotiations on a new EU-Russia partnership agreement
would begin at the next summit.

--Putin hoped that the next summit would be in June in
Siberia.

--Russia will provide 122 million euros for border control
cooperative efforts.

--Visa facilitation discussions will continue.

Comment
--------------

20. (C/NF) Socrates and other Portuguese government officials
characterized the summit as a success, citing the Permanent
Partnership Council on culture, the signed agreements on
steel and counternarcotics cooperation, an investment
dialogue predicated on the growing trading relationship, and
the early warning system for possible energy disruptions.
This appears to us to be small fish, however, given the
importance of international issues like Kosovo, the use of
energy supplies as a weapon against various EU member states,
cyber attacks on Estonia, and human rights issues in Russia.
A British Embassy source told us the Russians could not have
hoped for a friendlier host, and the Ukrainian ambassador
here expressed frustration that the Portuguese had not taken
a firmer line.


21. (U) On MD, press coverage generally failed to
characterize the overall positive tone of Putin's complete
response, when he lauded the 2 2 discussions and noted that
current U.S.-Russia differences were technical rather than
political. It was clear that few observers were comforted by
Putin's carefully-worded comments about his political future.

Hoffman