SWEDEN: UNVIE AMBASSADOR SCHULTE'S MEETING WITH FM

C O N F I D E N T I A L STOCKHOLM 001352 SIPDIS C O R R E C T E D C O P Y (GARBLED TEXT) SIPDIS E.O. 12958: DECL: 11/05/2017 TAGS: PARM IAEA AORC KNNP PREL PGOV IR IZ SW SUBJECT: SWEDEN: UNVIE AMBASSADOR SCHULTE'S MEETING WITH FM BILDT REF: A. STATE 149605 ¶B. STOCKHOLM 1319 ¶C. UNVIE VIENNA 647 Classified By: CDA Robert Silverman, reasons 1.4 (b) and (d). Summary -------------- ¶1. (c) On October 30, Ambassador Schulte's and Ambassador Wood's 90-minute exchange with Bildt focused on the international response to Iran,s nuclear ambitions. Ambassador Schulte lunched with journalists and gave a speech hosted by two Swedish think tanks. Ambassador Schulte's disarming and frank remarks were well received here and resulted in overall good press. The Swedes did note, however, that Schulte was optimistic about sanctions' ability to to deter the Iranian nuclear program. End Summary. The Iran Problem -------------- ¶2. (c) Bildt, who had invited Schulte to come to Stockholm, said he was concerned about nuclear proliferation in general and Iran in particular, listing three alternative versions of what Iran may be up to: -- First, Iran,s official line: "nothing." Iran is seeking a nuclear capability for peaceful civilian purposes; -- Second, Iran is building capabilities such as enrichment for which it is hard to make the case that they are exclusively for peaceful purposes, and which may be intended to keep the military option open; and -- Third, Iran has a full-scale weapons program underway that could be 2-5 years away from fruition. As if to reinforce scenario number two, Bildt noted that Sweden never decided to build the bomb, but decided in the 1940s to build all the capabilities that would be required. He then reviewed the history and evidence of Iran,s nuclear program and asked "where is Iran?" ¶3. (c) Ambassador Schulte said that the debate in Vienna was now between the second and third options and that Iran is pursuing at least the capabilities necessary to build a nuclear weapon. Evidence of this included the construction of a heavy water reactor, the "alleged studies" conducted by the Iranian government, ties of the military to the nuclear program, and tests involving high explosives. ¶4. (c) Schulte contrasted the Iranian case with Sweden,s, where, as Bildt noted, Sweden,s capabilities and intention had been different. Sweden could have built nuclear weapons, but chose not to. In Iran, the nuclear program had been started in 1985 with a military connection and in response to the Iran-Iraq War. IAEA DG ElBaradei believes that Iran owes a "confession." Yet ElBaradei undercuts his own message when he also says that there is no evidence that Iran currently is pursuing nuclear weapons. ElBaradei,s problem, Schulte said, is that he feels he has outgrown his position and would rather be a nuclear negotiator than a watchdog, the role given an IAEA DG. Bildt agreed that ElBaradei right now feels constrained by his technical job and probably would rather be a Foreign Minister. Diplomacy and Sanctions -------------- ¶5. (c) Ambassador Schulte told Bildt the U.S. sought through diplomatic cooperation to pressure Iran to fully disclose its current and past activities and to comply with IAEA requests for transparency and UNSC requirements to suspend. A "positive outcome" for November required a strategic decision on the part of Iran to change its relationship with the IAEA. The use of sanctions was not a course to war, but a way of reinforcing diplomacy. We were glad the EU was looking into the possibility of sanctions. ¶6. (c) Bildt said the EU has a role and can contribute. He agreed that sanctions were part of the strategy, but noted that it was not clear what the effects would be. Iran wants to be taken into account, he said. It sees itself as the world,s second-oldest civilization, a populous, proud country occupying a large territory. ¶7. (c) Ambassador Schulte said the U.S. was concerned that ElBaradei would report "partial progress" to the UNSC in mid-November. ElBaradei appeared ready to accept verification without an enrichment suspension. Bildt said that a plausible argument for suspension could be made to Iran. We need to reinforce to Tehran that suspension is not permanent. A country did not have to "blow up" its facilities, just freeze their use. Furthermore, Iran could still declare success if it suspends now that it has achieved its goal of 3000 centrifuges. The Iraq Connection -------------- ¶8. (c) Bildt said that when the Swedes meet with the Iranians (note: Iranian FM Mottaki was in Stockholm May 7 and DFM Araqchi Sept. 5),the Iranians are worried about Afghanistan and Iraq. Bildt noted the important role of Iraq,s neighbors, saying they have a historical and long-term perspective, and that "as long as they see Mesopotamia as the battleground," it will be hard to find a solution in Iraq. Iran needed to be brought in as part of solutions in the region "including those concerning Iraq" and that it will be impossible to get regional solutions without an understanding with Iran. This regional perspective, Bildt said, applied to the nuclear dialogue as well. Bringing Pressure -------------- ¶10. (c) Bildt suggested that we need to use all available "vessels" to reach Tehran, including the Russians, Indians, Chinese, and Turks, who all have an interest in a more forthcoming Iran. He noted that Russia was "basically helpful" even if they are not on board with further sanctions and noted that he has been pushing the need for pressure with Moscow for some time. He then argued that India was probably the most useful channel. Ambassador Schulte noted that we needed to send the same message through all channels because Iran seeks to divide these states. Iran was looking for gaps, and had approached Italy and Switzerland seeking to have them take a mediating role. Iran would like this to appear to be a U.S.-Iran issue. We sought to make clear that this was a problem the world had with Iran. ¶11. (c) Bildt noted that it was good that Javier Solana was taking the lead on behalf of the EU. When the EU met with Iranians, it gave them a hard time on the nuclear issue, and emphasized the regional approach to Iran. On a bilateral basis, Sweden had a good Ambassador in Iran, but it was becoming harder to get access to officials in Iran. It was also unclear how relevant ministries such as the MFA were. Ministries, Bildt said, did not run Iran, adding that this was also the case in Sweden. Sanctions and Sweden -------------- ¶12. (c) Ambassador Wood asked Bildt,s views of recently announced U.S. sanctions against Iran (refs A and B). Bildt said that while he did not think the sanctions would have a large effect on Sweden,s dealings with Iran, there were concerns in the financial sector regarding the sanctions in Iranian banks, objections had been voiced to the extraterritoriality of the sanctions, and exporters did not like the sanctions. Sweden was reviewing the potential effects, with Volvo trucks and Scania busses appearing to be those most affected. ¶13. (c) Sweden had, Bildt said, turned aside some years earlier, around 2002-3, requests from Iran to buy centrifuges from Sweden. India -------------- ¶14. (c) Schulte said the nuclear deal with India would be good for the U.S. and Europe, in terms building a new relationship with India, commerce, and reducing environmental risk. Bildt said there was need for an agreement with India, but underscored the debate there about India,s relationship with the U.S. He said that India would be a good place for Europe to work together under the CFSP framework. North Korea -------------- ¶15. (c) Bildt said Ambassador Chris Hill was doing well on North Korea. The weapons program had been stopped (unless, of course they have a uranium program hidden somewhere). He noted that the Chinese have been acting "much more sensible" and that their new Foreign Minister sounds like he is from a think tank in Washington. Schulte said it was not clear North Korea would disable its facilities, leading to the possibility of reconstituting its capabilities, and was also a problem of accountability. Schulte agreed that China had played a helpful role. GNEP -------------- ¶16. (c) Schulte urged Bildt to have Sweden to become a partner of the Global Nuclear Energy Partnership. Sweden had attended the September 16 ministerial as an observer. Bildt did not respond directly to this request and averted the question by saying that Sweden "has a strange policy on nuclear energy." SIPRI Speech -------------- ¶17. (c) Ambassador Schulte,s speech at SIPRI, "Setting the Standard for Iran,s Cooperation: Full Disclosure of Past and Present Nuclear Ambitions" was well-attended and generally well received. During the Q and A following the speech, Iranian, Syrian and Egyptian Ambassadors to Sweden heavily criticized the U.S. stance on the Iranian nuclear program. The Iranian Ambassador said that Iran wanted a Middle East free from WMDs and quoted ElBaradei,s and Heinonen,s recent comments citing that there is "no evidence" of diversion from Iran,s "peaceful nuclear activities to nuclear weapons." He compared U.S. accusations of Iran,s nuclear intent to the flawed accusations against Iraq. The Syrian Ambassador echoed the sentiment that the comparison to Iraq was valid and argued that Israel posed the greatest nuclear threat in the Middle East. The Ambassador to Egypt agreed that the U.S. has a double standard in its stance on the Israeli and Iranian nuclear programs and noted that in contrast to the run-up to the Iraq conflict when the U.S. disregarded the recommendations of Hans Blix, the U.S. praises the IAEA today because it fits our foreign policy agenda. He said that the introduction to Schulte,s speech sounded like a declaration of war and attested to the pressure and difficulties of being a U.S. ally given U.S. foreign policy in the region. ¶18. (c) In Schulte,s response, he made clear that ElBaradei and Heinonen actually said there is no evidence that "declared" material had been diverted for military use and said that numerous questions about the nature and scope of Iran,s nuclear program remain. He said the IAEA Board of Governors reported Iran to the UNSC in the past due to its uncooperative approach and noted that the sanctions had been imposed unanimously by the UNSC ,including a diverse group of nations. Iranian explanations for its uranium enrichment goals for Natanz and a heavy water reactor at Arak were illogical and insufficient. He concluded by categorizing his speech as a declaration of concern and saying that no one, with the possible exception of President Ahmadinejad, is interested in war at this time. ¶19. (u) UNVIE Vienna has cleared this cable. SILVERMAN