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