SCENESETTER FOR KAREN HUGHES VISIT TO PRAGUE ON

UNCLAS PRAGUE 000614

SIPDIS

SENSITIVE
SIPDIS

EUR/NCE, EUR/PPD CHRIS FITZGERALD, R KARYN POSNER-MULLEN

E.O. 12958: N/A
TAGS: PREL EZ
SUBJECT: SCENESETTER FOR KAREN HUGHES VISIT TO PRAGUE ON
JUNE 4


1. (U) Under Secretary Hughes, we look forward to welcoming
you to Prague on June 4. In anticipation of your visit, we
offer the following background information on the Czech
economy, bilateral relations, Czech democracy promotion, and
plans for your stay.


2. (U) Seventeen years after the Velvet Revolution, the Czech
Republic is today a stable and rapidly developing country.
The economy has grown at 6% for the past two years and is
fueled by healthy export and foreign investment. Inflation is
low and the country intends to adopt the Euro in 2012. The
current center-right government has an ambitious agenda to
lower taxes and tackle overdue reforms in health care and
pensions, although it remains to be seen if they will be able
to overcome political opposition to these reforms. Many U.S.
companies are active in the country. While most are satisfied
with the business climate, the country is hampered by a
prevalence of corruption that had lingered since the
communist era. Promoting transparency and ethics is a top
priority of the U.S. Embassy.


3. (U) As you know, the United States and the Czech Republic
enjoy excellent relations. All governments since 1989 have
placed a high priority on transatlantic relations. The Czech
Republic entered NATO in 1999 and joined the European Union
in 2004. The military has been reformed and cooperates
closely with the United States in Afghanistan, Iraq, the
Balkans and elsewhere.


4. (SBU) The Czechs place a high priority on spreading the
lessons learned from their successful political
transformation. They are particularly active in support of
democratic reform and human rights in Cuba, Belarus, and
Burma (although they prefer not to place the public spotlight
on these efforts). Radio Free Europe/Radio Liberty is another
example of Czech support for people striving to be free in
distant lands.


5. (U) There are only two sensitive issues in our bilateral
relations. The first is visas. Although Americans can travel
freely to this country, Czechs still need visas to travel to
the United States. As an American ally in NATO, a strong
supporter of the war on terror, and an EU member, the Czechs
believe they should be able to travel to the United States on
the same terms as Germans, French and other Western European
countries in the U.S. visa waiver program. President Bush
recognized the aspirations of our Central European allies,
and the importance of cementing closer ties with the Czech
Republic and its neighbors, when he announced in Tallinn in
November 2006 that he would seek legislation to revise the
terms of the visa waiver program. The proposed terms would
place greater emphasis on security cooperation, which would
accelerate entry into the program for countries like the
Czech Republic. The Czechs follow closely any proposed U.S.
legislation dealing with the immigration issue.


6. (U) The second sensitive issue is missile defense. In
January, after several years of quiet talks, we asked the
Czech Republic to host a radar station as part of the U.S.
missile defense network. This facility, together with a small
number of interceptor missiles to be based in Poland, would
protect the eastern United States as well as U.S. allies and
troops in Europe against ballistic missiles launched from the
Middle East. While the current government supports the
proposal, the issue is controversial. About 70% of Czechs say
they oppose the radar. With memories of the Soviet invasion
of 1968 still fresh in many minds -- the last Russian troops
did not leave the country until 1992 -- many Czechs are
instinctively wary of the idea of foreign troops on their
soil. Many also believe the country should only take on
military obligations through NATO, not on a bilateral basis.
Negotiations have begun and are likely to last through the
end of the year. The deal will need to be approved by
Parliament. As with the visa issue, the Czechs are following
closely any proposed U.S. legislation dealing with funding
for missile defense.


7. (U) While in Prague, you will help the Central and Eastern
European Law Initiative (CEELI) celebrate the inauguration of
its new building. You will also explore issues of common
concern over lunch with leading Czech women. These meetings
will allow you to gain a better understanding of how ordinary
Czechs view the future of their country, and the United
States.


8. (U) We hope a highlight of your trip will be a day trip to
nearby Pilsen, where you will meet with some of the Embassy's
Junior Ambassadors (top high school students who have visited
the U.S. Embassy as part of a new Embassy youth outreach
program) at Pilsen's American Corner. You will also have

lunch with a few regional leaders at Pilsen's pride and joy,
its brewery.


9. (U) We look forward to welcoming you again to Prague.
GRABER