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