SWEDEN: SCENE-SETTER FOR PRIME MINISTER

S E C R E T SECTION 01 OF 03 STOCKHOLM 000506 SIPDIS SIPDIS STATE FOR EUR/NB NSC FOR JUDY ANSLEY AND MATT PALMER E.O. 12958: DECL: 05/01/2017 TAGS: PREL PGOV SW SUBJECT: SWEDEN: SCENE-SETTER FOR PRIME MINISTER REINFELDT'S MAY 15 VISIT TO WASHINGTON Classified By: Ambassador Wood, reason 1.4 (b) and (d). Summary -------------- ¶1. (c) The May 15 visit of Prime Minister Fredrik Reinfeldt provides an opportunity to strengthen ties in key areas with a Swedish government that is relatively new to office and better-disposed toward working with the U.S. than its predecessor. Reinfeldt comes from a new political generation and is not bound by the same U.S.-critical traditions. At the Embassy, we have successfully emphasized cooperation with Sweden on alternative energy. Reinfeldt has put energy and climate issues at the top of his domestic agenda, and told the Ambassador May 4 that he hoped that his trip would help change perceptions in Sweden about the U.S. on this subject. Reinfeldt said he will raise with President Bush climate change and energy issues, Turkey, Russia and Sweden's Eastern neighbors, Afghanistan, Kosovo, and Iran. While Sweden's official foreign policy doctrine emphasizes non-alignment, in practice Sweden is a pragmatic and strong partner with NATO, having troops under NATO command in Kosovo and Afghanistan, where it leads a Provincial Reconstruction Team. In addition to the meeting with President Bush, Reinfeldt will meet May 14 with SGY Ban Ki-moon and other UN officials in New York, will meet in Washington with Speaker Pelosi and address the House Select Committee on Energy, and will visit May 16 the National Renewable Energy Lab in Colorado. End Summary. Reinfeldt as Prime Minister -------------- ¶2. (u) Prime Minister Fredrik Reinfeldt will meet with President Bush May 15. Reinfeldt, 41, became Prime Minister in October 2006 following the victory in parliamentary elections of his center/right coalition, the Alliance for Sweden. Reinfeldt's Moderate party has the leading role in the Alliance, controlling the ministries of Finance, Foreign Affairs, Justice, and Defense. The others making up the Alliance government are the Center, Liberal, and Christian Democrat parties. Before this election, Social Democrats had controlled the government for 64 of the prior 73 years. ¶3. (u) The Moderate-led government was voted into office by promising to create jobs while protecting the fundamentals of Sweden's long-established and popular social welfare system. �0A;During seven months in office, the Alliance government has changed the labor laws to reduce unemployment benefits and provide incentives to employment. It has announced plans to do away with the wealth tax and abolish the valuation-based property tax, replacing it with a much-reduced local tax. It has introduced and is expected to pass legislation authorizing the sale of six large state-owned businesses during the coming three years. Sweden as a Partner -------------- ¶4. (u) The new government retains Sweden's commitment to multilateralism, with an emphasis on the roles of the UN and EU, and values continued cooperation with NATO. Sweden has troops under NATO command in Kosovo (300 troops) and Afghanistan (250 troops),where it leads the Provincial Reconstruction Team at Mazar-e-Sharif. The government recently introduced legislation to raise the number of troops authorized for deployment in Afghanistan to 600, with the proviso that they will be deployed only if circumstances require. ¶5. (c) Sweden's official security policy is non-participation in military alliances during peacetime and neutrality during wartime. Its active participation in the NATO Partnership for Peace and its role in leading the European Union's 1,500 troops-strong Nordic Battle group give the lie to the official policy. Sweden has opted out of buying two C-17s and has subsequently joined and made the second-highest contribution to the NATO-sponsored Strategic Airlift Capability. This will, in the long run, support of the Nordic Battle group and other strategic lift requirements. Sweden also plays an important role in Darfur, where former Swedish Foreign Minister Jan Eliasson is the UN Special Envoy and Sweden supports democratization and humanitarian relief. Within the EU, Sweden often takes positions that coincide with our own on issues as diverse as the DOHA round, EU enlargement and Turkey, Swift banking data privacy, and the EU's relationship with Cuba. ¶6. (s) Swedish military and civilian intelligence organizations are strong and reliable partners on a range of key issues, particularly making a significant contribution to our understanding of events inside the Russian military and STOCKHOLM 00000506 002 OF 003 in Iran's nuclear ambitions. The good cooperation on counterterrorism, both domestically and internationally, has helped Swedish authorities carry out their mandate to protect Swedish citizens and national interests. Due to domestic political considerations, the extent of this cooperation in not widely known within the Swedish government and it would be useful to acknowledge this cooperation privately, as public mention of the cooperation would open up the government to domestic criticism. Cooperation on Alternative Energy -------------- ¶7. (u) Embassy Stockholm has set as its highest priority cooperation with Sweden to achieve a breakthrough in the development of alternative energy sources. As a leader in research and development and policy initiatives in alternative energy, Sweden is a natural partner to the U.S. The government has invested extensively in energy research and provides a wide array of policy incentives to stimulate the expansion of renewable power production and the use of alternative fuels and energy. The new government has pledged to cut CO2 emissions by 25 percent by the year 2020. A strong proponent of the Kyoto Protocol, Sweden is one of only two EU countries likely to meet its 2012 Kyoto Protocol targets. ¶8. (c) The Swedes assume the EU presidency in the latter half of 2009 and have announced that climate change will be at the top of their agenda (we note that this will be just as serious campaigning begins for Sweden's September 2010 parliamentary elections). We also note that Sweden was a strong supporter in the EU of positive U.S.-EU Summit Statement on energy security, efficiency, and climate change. Sweden considers it critically important that the United States be at the table during discussions of a post-2012 framework to address climate change. Sweden will do what it can to help set conditions to ensure that the United States, as well as China, India and other primary GHG emitters from the developing world are brought into these discussions and negotiations. Swedish Minister of Environment Andreas Carlgren is hosting a ministerial June 11-14 in northern Sweden entitled "Midnight Sun Dialogue on Climate Change." It is important to note that the title does not mention the word Kyoto; this is no accident. The Swedes hope to usher in a post-2012 agreement during their 2009 Presidency of the EU. PM Reinfeldt will want to discuss his plans with you. ¶9. (c) The Embassy's initiative on intensifying collaboration with Sweden on alternative energy (known as "The One Big Thing" - OBT) has helped ease the path for the more constructive tone of discussions on climate change in Sweden and has done much to set a positive overall tone between our governments. The emergence of the new center-right government -- reflexively more pro-American and pro-business -- has been fortuitous. PM Reinfeldt and his ministers want to work with us, understand well the need for technology-based solutions to energy needs, and recognize that important new opportunities exist for Swedish business which is on the cutting edge of alternative energy technology and research. There is both good will and the desire for bottom line results. The success of the "One Big Thing" will not ultimately depend on political good will, but on results. Reinfeldt told the Ambassador there had been a dramatic shift in Sweden and in the EU on the possibility of providing technology-based solutions to a reduction of green-house gases; green issues could be combined with market-based solutions. ¶10. (c) The OBT has made significant progress in several key areas. Among the most significant are: -- Negotiation (in progress) of a DoE/Sweden/Volvo joint research agreement regarding hybrid engines for heavy trucks; -- Commitment by Sweden's Chalmers University to host a Fulbright Distinguished Chair in Alternative Energy Technology; Chair to arrive in August 2008; -- Matching promising initiatives with venture capital, List of 30 promising Swedish alternative energy companies given to 18 U.S. Venture Capital firms interested in alternative energy investment; the meeting which took place on 4/19 in Stanford, California generated considerable interest; -- Participation of Swedish industry in an imminent contract awarded by DARPA to Swedish Biofuels AB for the development of jet fuel made from bio fuels; -- An agreement on second generation biofuels between the Swedish Energy Agency and the DOE will soon be ready for signature. STOCKHOLM 00000506 003 OF 003 Topics the Prime Minister will Raise -------------- ¶11. (s) Prime Minister Reinfeldt has informed us he plans to raise with President Bush: -- Climate change and energy. This may include reference to a post-2012 framework, especially in the context of Sweden's EU presidency in the second half of 2009, and cooperation on alternative energy; -- DOHA, where Sweden has played a positive role in the EU. Reinfeldt told the Ambassador Sweden would like to see the DOHA round finalized during the German presidency of the EU. A prominent Swedish businessman, Marcus Wallenberg, is also Chair of the International Chamber of Commerce and has lobbied on behalf of DOHA; -- Turkey, where Reinfeldt is concerned that the split within the EU could become more pronounced if Sarkozy wins the French elections. Reinfeldt told the Ambassador May 4 that a French move to make it harder for Turkey to join could be make it easier for Germany, which is also reluctant for Turkey to join, to come down on the right side. In Sweden's view, signaling to Turkey that its chances are decreasing would be the wrong message, particularly in view of upcoming elections in Turkey. -- Russia and Sweden's Eastern neighbors. Reinfeldt mentioned energy security as a primary issue; Sweden is likely also to raise democratization and human rights issues, and has expressed concern over developments in Russia's relations with Estonia; -- Afghanistan, where Sweden leads a PRT. Reinfeldt underscored to the Ambassador that Sweden is firm in its long-term commitment to the PRT and will authorize additional troops (going from 350 to 600 authorized) to go there if needed. He did not raise or react to reports from DOD channels that U.S. defense channels had raised the possibility of a Sweden hosting a second PRT. Sweden has previously raised concerns regarding its lack of access, as a non-member of NATO, to intelligence, particularly in connection with force protection; -- Kosovo and -- Iran. We note that Iranian FM Mottaki will be in Stockholm May 7 and will meet with Deputy Prime Minister Maud Olofsson and FM Bildt, as well as members of parliament. Other Issues -------------- ¶12. (c) Immigration and refugees, including from Iraq. Sweden took in 9,000 refugees from Iraq in 2006; projections are that it will receive 25,000 Iraqi refugees in 2007. Sweden is now the destination for over one-half of all Iraqi refugees going to EU countries. Immigrants from Muslim countries now constitute about four percent of Sweden's population. Sweden has recently cited the burden of taking care of arriving refugees in response to U.S. requests for Sweden to consider accepting third-country nationals now in U.S. custody. The Swedish Delegation -------------- ¶13. (u) We have been informed that the Swedish delegation coming to the U.S. will include: -- Mr. Fredrick Reinfeldt, Prime Minister; -- Ms. Nicola Clase, State Secretary, Prime Minister's Office; -- Mr. Frank Belfrage, State Secretary MFA; -- Mr. Johan Frisell, Director, Prime Minister's Office; -- Ms. Katarina Areskoug Mascarenhas, Adviser of EU Affairs, Prime Minister's Office; -- Mr. Anders Turesson, Senior Adviser, Ministry of the Environment; -- Mr. Hakan Malmqvist, Head of the Americas Department, Ministry of Foreign Affairs; -- Ms. Maria Elgstrand, Political Adviser, Prime Minister's Office; -- Mr. Oscar Hallen, Press Secretary, Prime Minister's Office. WOOD