GERMANY: BUSINESSLIKE PUTIN-MERKEL MEETING IN

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 000382 SIPDIS SIPDIS E.O. 12958: DECL: 01/30/2017 TAGS: PREL PGOV ETRD EU GM RS SUBJECT: GERMANY: BUSINESSLIKE PUTIN-MERKEL MEETING IN SOCHI REF: 06 MOSCOW 13073 Classified By: Pol/Min Counselor Alice G. Wells. Reasons: 1.4 (b/d). ¶1. (C) SUMMARY: The January 21 meeting in Sochi between President Putin and Chancellor Merkel was businesslike but not particularly warm. There was a sharper tone in the political exchanges than there had been in the past. Putin told Merkel Russia would not accept a forced solution for Kosovo. Merkel underscored dissatisfaction with Russia's failure to provide advance warning of the oil cutoff to Belarus, urged Russia to thoroughly investigate the Politkovskaya murder, and chided Russia for arms sales to Iran and Syria. Putin defended the sales, while admitting that Syria was a difficult partner. Both agreed that the EU and Russia need to begin negotiations soon for a Partnership and Cooperation Agreement (PCA). END SUMMARY. ¶2. (C) Both Russian MFA and German Embassy officials described the January 21 meeting between President Putin and Chancellor Merkel in Sochi as businesslike, with a broad agenda. However, our German contacts added that the it lacked the warmth of previous Putin-Schroeder meetings. The meeting lasted two hours -- an hour more than planned. For the most part, accounts by Andrey Grozov, chief of the MFA's German Section, and the German Embassy's Thorsten Hutter tracked closely. KOSOVO FINAL STATUS -------------- ¶3. (C) The German Embassy told us Merkel highlighted that, while it was important to support and not humiliate Serbia, it was also essential for the Contact Group to stay united and support Ahtissari's proposal. Merkel told Putin that Serbia should get something in return for compromising on Kosovo's final status, and the best inducement was integration with European institutions. Merkel said she would use Germany's EU presidency to do that. While it would be preferable if Serbia agreed to the solution for Kosovo, this ultimately might not happen. The MFA underlined Putin's insistence that the GOR could not support an imposed solution. However, Putin denied Serbian press reports that he had promised PM Kostunica that Russia would veto a UN Security Council resolution. Putin also reiterated that the independence of Kosovo would set a precedent for the frozen conflicts in Georgia and Moldova. ENERGY: DIFFERENT STORIES ON THE BELARUS OIL CUT OFF 
 -------------- -------------- ¶4. (C) Merkel made a "very strong" point that Berlin was displeased with Moscow's failure to give advance notification for the early January Belarus oil cutoff, according to the Germans. Putin agreed that Russia should have given advance notification, and told Merkel it would not happen again. (Note: Grozov maintained that Germany and all downstream customers had been notified in advance about Russia's desire to raise taxes and tariffs on oil exported to Belarus, and that constituted advance notification of a cutoff.) Merkel suggested that any future EU PCA should include a formal mechanism for communicating a reduction or cutoff of gas or oil. Putin told Merkel that the GOR wanted to increase efforts to diversify gas and oil transit routes to make Russia and European consumers less reliant on transit states such as Belarus and Ukraine. Putin said he was not against discussions about an energy agreement with the EU, but reiterated that Russia would not sign the EU-proposed Energy Charter in its current form, because it favors consumers over producers. THE POLITKOVSKAYA INVESTIGATION -------------- ¶5. (C) Merkel also emphasized the need for Russian law enforcement authorities to thoroughly and speedily conclude the investigation into the murder of journalist and Kremlin critic Anna Politkovskaya. She emphasized that the murder served as a powerful symbol of the status of press freedom for those in the West, and that lack of progress in the case would not help the GOR, according to the Germans. Putin said he understood the need for a complete investigation, but that police had so far turned up nothing new. (Putin expressed his unhappiness over Merkel's emphasis on the Politkovskaya murder in his January meeting with Italian PM Prodi -- with the Italians attributing the success of Prodi's session to Putin's palpable relief that the Merkel visit was over.) IRAN AND SYRIA -------------- MOSCOW 00000382 002 OF 002 ¶6. (C) Merkel raised concerns about recent Russian arms sales to Iran and Syria, said Hutter. Merkel told Putin that Syria was causing too much mischief in Lebanon, and that arms sales would only encourage the SARG further. Putin defended the sales in traditional terms, by saying they did not violate any international sanctions regime and maintaining that it was important not to put too much pressure on either Iran or Syria. According to the MFA, Putin argued that it was important to include Syria in any conflict resolution in Lebanon. Both agreed that the problem of Iran's nuclear program should be resolved diplomatically. ISRAELI-PALESTINIAN CONFLICT -------------- ¶7. (C) Putin told Merkel that the GOR agreed with the German proposal that Quartet activity should be stepped up, Grozov told us. The GOR also agreed with Germany that the Quartet's role should expand to include not only the Israeli-Palestinian conflict, but other regional conflicts as well. STANDOFF WITH POLAND -------------- ¶8. (C) Both sides reaffirmed their interest in beginning negotiations for a new EU-Russia PCA as soon as possible, though Putin noted that the GOR did not currently see failure to agree as a crisis, since the current agreement would be extended for the time being, Grozov told us. Merkel stressed that the EU was determined to remain unified regarding its policy toward Russia, but that it was important to resolve the standoff with Poland regarding Russian sanctions against Polish meat and plant products. Merkel said the EU could play a mediating role between Russia and Poland regarding the standoff, and that the Poles and the European Commission were preparing to answer Russia's concerns about Polish imports. Putin said Russia would analyze Poland's procedures, but would not say for certain if or when sanctions would be lifted. COMMENT -------------- ¶9. (C) From his first encounter with Merkel last January in Moscow, Putin has tried to steer the bilateral conversation to economic issues where Berlin and Moscow share similar interests (and dependencies). However, Merkel's insistence on bringing up political issues -- particularly those involving Russia's domestic politics -- rankles a Kremlin used to a less challenging reaction from Schroeder. Russia expected that the heavy lifting on the new PCA would be done by Germany during its EU Presidency; a failure to deliver by one of Russia's closest European partners will raise questions about where the broader Russia-EU relationship is headed. BURNS