SCENESETTER FOR ESTONIAN PM ANSIP'S NOVEMBER 27-29

C O N F I D E N T I A L TALLINN 000752

SIPDIS

SIPDIS

FOR S STAFF, EUR, EUR/NB FOR GILCHRIST/GARRY
NSC FOR OVP HAAVE
DOC FOR MARKOWITZ
DOE FOR NIGRO
DHS FOR BROWN

E.O. 12958: DECL: 11/20/2017
TAGS: PGOV PREL ENRG NATO ECON CVIS EN
SUBJECT: SCENESETTER FOR ESTONIAN PM ANSIP'S NOVEMBER 27-29
VISIT TO WASHINGTON

REF: TALLINN 693

Classified By: CDA Karen Decker for reasons 1.4 (b) & (d).


1. (C) SUMMARY: Prime Minister Andrus Ansip's November 27-
29 visit to Washington, his first as PM, comes on the eve
of the Estonian Parliament's vote to renew Estonia's
participation in both Iraq and Afghanistan. Ansip supports
Estonia's military engagements abroad, but relies on USG
recognition to shore up voters at home. PM Ansip will also
look for U.S. support for Estonia's efforts to prevent a
Russian energy monopoly in the Baltics, and would welcome
public U.S. support to counter Russian claims of Estonian
fascism. Ansip will want to highlight Estonian progress on
Visa Waiver Program conditions, and will convey Estonia's
desire to continue its close CT cooperation. Finally, PM
Ansip will thank the USG for seconding personnel to its
cyber-security center and express the GOE?s interest in
discussing cyber security at the 2008 NATO Summit in
Bucharest.


2. (C) During his visit PM Ansip will meet the Vice
President, the Secretary of State and the Secretaries of
the Departments of Homeland Security, Energy and Commerce.
Ansip will also visit the Victims of Communism memorial and
meet with prominent Jewish leaders. In meetings with PM
Ansip, it would be useful to:

-- Recognize Estonian sacrifices in Iraq and Afghanistan
and thank Ansip for Estonia's unwavering support;

-- Emphasize the dangers to Europe from an energy-
aggressive Russia, and urge Estonia to take a proactive
role in EU discussions on energy security;

-- Underscore the need for Russia and Estonia to find ways
to engage constructively, while rejecting Russian efforts
to paint Estonia a fascist nation;

-- Acknowledge Estonia's cooperation on visa and passport
issues and assure Ansip the VWP process is moving forward;

-- Laud Estonia's leadership on strengthening international
cyber-security and agree it should be discussed in
Bucharest next April;

-- Encourage bilateral efforts to strengthen trade and
investment ties. END SUMMARY.

ANSIP STRONG, ESTONIA STABLE


3. (C) At home PM Andrus Ansip enjoys broad public support
and a stable governing coalition. In the March 2007
parliamentary elections which saw Ansip re-elected, Ansip
received the most votes ever by an individual in Estonia's
history. Just after this electoral triumph, Ansip was
tested by fire: his April decision to relocate a Soviet-era
statue (the "Bronze Soldier") to a military cemetery
sparked two days of rioting and strong condemnation from
Moscow. Ansip's steadfast leadership throughout elicited a
surge in popular support for the government. Recent polls
give Ansip's Reform party almost 40 percent support - more
than twice its historical levels.


4. (U) Ansip is the first Estonian PM to visit the U.S.
since 2004, and he himself has not visited Washington since
March 2005 (as Minister of Economy). Following his stop in
DC, Ansip will travel to California to speak at Stanford's
Hoover Institute, visit Silicon Valley and meet with
Estonia-Americans. Personally, he is (in classic Estonian
style) extremely reserved, and inclined to put a positive
spin on issues. He is fiercely proud of American support
for Estonia during the Soviet occupation and will likely
couch much of Estonia's support for U.S. objectives today
as Estonia's "obligation" for our help in the past.

IRAQ/AFGHANISTAN


5. (C) Eight percent of Estonia's armed forces are deployed
overseas (the second highest deployment rate in NATO),and

the GOE has made clear it will continue to be an active
contributor to international security. Estonian forces are
present in combat missions in both Iraq and Afghanistan and
operate without caveats. In Afghanistan, Estonian forces
are embedded with the UK in the volatile Helmand province.
In June, two Estonians were killed and four others wounded
in a Taliban rocket attack. Master Sergeant Engel, a nurse
who lost her leg in the attack, will receive treatment at
Walter Reed Army Hospital in the coming months. In Iraq,
Estonian soldiers serve with U.S. forces outside Baghdad.
To date, Estonia has suffered multiple casualties,
including two killed and more than 20 wounded.


6. (C) Parliament is now debating the extension of foreign
military missions (Reftel),and is scheduled to decide in
early December. While Ansip expects Parliament to approve
both extensions, the Iraq debate has split the Parliament
and that vote will be close. PM Ansip strongly supports
Estonia's presence in Iraq and is on record that Estonia
will stay "as long as it is needed." In October, however,
Defense Minister Aaviksoo said publicly the GOE does not
intend to extend the Iraq mission beyond 2008. Popular
support for Iraq is low, and if Estonia decides to draw
down its forces, the Iraq mission is likely to be the first
cut. The PM will be interested in hearing our longer term
planning for Iraq, as well as our thanks for Estonia's role
- both will help him manage perception at home.

RUSSIA - HISTORY AS A WEAPON


7. (C) Sixteen years after regaining its independence,
Estonia's relationship with Russia remains difficult. The
GOE decision to relocate the "Bronze Soldier" monument from
central Tallinn to a military cemetery in April exacerbated
tensions. Following two days of rioting in Tallinn, Russia
put heavy political and economic pressure on Estonia by
refusing to disperse a mob outside the Estonian Embassy in
Moscow and limiting rail/truck traffic across the border.


8. (C) Russia also stepped up its anti-Estonian rhetoric,
complaining about Estonia's treatment of its Russian
minority and repeatedly accusing Estonia of Nazi/fascist
tendencies. In late July, Russian officials condemned a
reunion of Estonian WWII veterans, saying it "glorified
Nazism in Estonia." Moscow linked the reunion with an
annual Estonian military exercise and criticized the nine
countries participating in the event (including the United
States). The GOE has repeatedly expressed its frustration
over Russian tactics to us. The PM may raise this issue,
highlight the need to pay sufficient attention to
"communist crimes" committed since WWII, and solicit public
support for Estonia vis-a-vis Russian propaganda.


9. (C) There is one area of positive cooperation between
the GOE and GOR following the Bronze Soldier incident.
After excavating the bodies of the Soviet soldiers buried
beneath the statue, the GOE used DNA analyses to identify
the remains. Several soldiers were transported back to
their home countries (Russia and Ukraine) for reburial; the
others were reburied in Estonia. During a recent dinner
hosted by the Estonian Ambassador in Moscow, Russian D/FM
Titov commended FM Paet for the GOE's handling of the
remains of the Russian soldiers.


10. (C) The CFE treaty remains problematic for Estonia and
Russia. GOE officials say they are willing to join the
Adapted CFE Treaty, once it has been ratified by all of the
treaty signatories. Further, they agree with U.S. arguments
in favor of bringing the Baltics into the flank regime.
Bottom line, however: they are concerned by Russia's
failure to meet Istanbul commitments.

ENERGY SECURITY


11. (C) Estonia is quickly approaching a crossroads in its
energy policy. Currently, oil-shale-fired power plants
supply 93 percent of Estonia's electricity needs (and 54
percent of total energy requirements). However, these
plants require significant upgrades in order to meet EU
environmental standards. The GOE is considering investment

in the proposed Ignalina power plant in Lithuania. PM Ansip
is a strong advocate of Estonian investment in Ignalina --
to help diversify the electricity supply as well as promote
regional cooperation. However, there is growing frustration
with Lithuania's handling of the project (long delays, lack
of coordination). While Estonia's demand for natural gas
is lower than other countries in the region, it is still
dependent on Russia for 100 percent of its gas supply. The
PM is likely to express concern about an energy "vacuum" in
the Baltics and Russian efforts to fill this void.

NATO SUMMIT AND BEYOND


12. (C) PM Ansip is likely to highlight two NATO-related
issues for Estonia: cyber security and enlargement. The
cyber attacks on public and private Estonian websites after
the Bronze Soldier riots in April heightened Estonian
interest in cyber security. The GOE has raised this
bilaterally and within the EU and NATO. During his
meetings, the PM will likely make a pitch for including
cyber security in the Bucharest Communique.


13. (C) Meanwhile, the GOE is working to accredit its
domestic cyber center as a NATO Center of Excellence (COE)
and is recruiting participation of other NATO members.
Seven countries (the U.S., Germany, Spain, Italy, Bulgaria,
Lithuania and Poland) have agreed to support the cyber
center and send personnel. The U.S. representative from
the Naval Criminal Investigative Service (NCIS) took up his
duties at the cyber center on November 19.


14. (C) Estonia is a strong advocate for NATO and EU
enlargement and has actively supported Georgia's interest
in MAP. Georgia is also one of the GOE's "priority
countries" for development assistance and senior GOE
officials visit the country frequently. In 2006, Estonia
allocated almost $500,000 in bilateral assistance to
Georgia. However, GOE officials admit that recent events
represent a serious obstacle to reform and complicate
discussions about Georgia within NATO.

INVESTMENT AND ECONOMIC RELATIONS


15. (C) After seven years, Estonia's rapid economic growth
is starting to slow. From almost 11 percent in 2006, GDP
growth this year is just over 6 percent. Policy-makers
note that slower growth has stemmed earlier concerns about
the economy overheating but raised concerns about the
economy making a "hard landing." U.S. Treasury analysts,
independent rating agencies and local banks agree the
Estonian economy is sound and dynamic. The state budget
has been in surplus since 2001, and unemployment is about
4.2 percent. Problems areas include inflation (8.5 percent
and rising),rapid wage and credit growth, and a shortage
in labor across the public and private sector. While the
GOE remains committed to joining the Euro zone, inflation
levels will likely keep this from happening before 2012.


16. (U) The U.S.-Estonian trade and investment relationship
is limited primarily by the small size of the Estonian
market. The U.S. is currently the 8th largest foreign
investor in Estonia, but contributes only 2.1 percent of
total FDI. While in the U.S., PM Ansip will travel to San
Jose, CA to open officially "Enterprise Estonia's" new
office. (Enterprise Estonia is the GOE's business and
investment promotion agency.) The office is geared to
promote stronger ties between Estonian and U.S. high-tech
companies. PM Ansip may ask about the newly-established
Transatlantic Economic Council (TEC).

VISA WAIVER


17. (C) Estonia is keenly interested in joining the Visa
Waiver Program (VWP). (Estonia will join the Schengen
Regime for land and sea borders on December 21.) President
Bush announced VWP reform in Tallinn in November 2006. The
legislation he signed in August 2007 cleared the way for
Estonia's inclusion in the near future. Remaining steps
consist of a formal DHS assessment of Estonia's candidacy
(an intensive months-long process which is underway),the

State Department's formal nomination of Estonia for
inclusion in the program and the conclusion of several
information-sharing agreements. The first of these, a
terrorist-information-sharing agreement, will likely be
signed in Tallinn in December 2007. Additionally, the USG
must field an on-line Electronic Travel Authorization (ETA)
system and certify its exit-check system prior to any
expansion of VWP. The most likely window for Estonian VWP
accession, predicated upon a positive DHS assessment and
timely ETA fielding, is between October 2008 and July 2009.
The PM will undoubtedly press us to extend VWP to Estonia
as soon as possible, focusing not only on the technical
requirements that Estonia has met, but also on Estonia's
strong record in participating in the Global War on Terror.
DECKER