AMBASSADOR'S MEETING WITH FORMER CHANCELLOR

C O N F I D E N T I A L VIENNA 000988 SIPDIS SIPDIS E.O. 12958: DECL: 04/15/2017 TAGS: PGOV PREL AU SUBJECT: AMBASSADOR'S MEETING WITH FORMER CHANCELLOR SCHUESSEL Classified by Deputy Chief of Mission Scott Kilner for reasons 1.4 (B)(D) ¶1. (C). Summary. Amb. McCaw, accompanied by DCM, recently called on OVP Parliamentary Leader (and former Chancellor) Wolfgang Schuessel to discuss a range of bilateral issues. Schuessel defended FM Plassnik's recent GAERC and Gymnich statements on missile defense, and described the SPO as "boxed in" by its election campaign rhetoric against the Eurofighter. The former Chancellor was upbeat on the Austrian economy, and cautiously optimistic regarding recent developments in Palestinian-Israeli relations. The Ambassador and Schuessel also discussed possible new uses for residual ERP (Marshall Plan) funds in Austria. End Summary. ECONOMY STRONG -------------- ¶2. (SBU) After welcoming the Ambassador to his new offices in Parliament, Schuessel opened the discussion with an upbeat assessment of Austria's economic situation: growth was strong, and it appeared that the budget deficit for 2007 would be well below one percent of GDP -- probably close to zero. In this climate, negotiations between the coalition partners on a new budget had gone quite well. EUROFIGHTER: SPO BOXED IN -------------- ¶3. (C) Amb. McCaw raised the subject of recent press publicity over supposed "delays" in USG approval for the release of COMSEC equipment requested for Austria's Eurofighter aircraft. She said that DOD would process the licenses as quickly as it could, but Austria had not made its formal request until late 2006. Schuessel replied that the manner in which the SPO had exploited this issue during last fall's election campaign left it little room for maneuver now. Defense Minister Darabos was "looking for any excuse" to delay or reduce deliveries of the aircraft, and he might try to make the COMSEC release authority such an excuse. Explicitly asking not to be quoted, Schuessel described Darabos as a real disappointment as Defense Minister so far. ¶4. (C) Schuessel then launched into a strong defense of the previous government's decisions on the Eurofighter. The planes were absolutely necessary if Austria is to maintain any kind of credible air defense capability. Schuessel said this was a matter of principle, and that he had "paid a very, very heavy price" for defending this principle during the last election campaign. MISSILE DEFENSE -------------- ¶5. (C) The Ambassador said the U.S. had been disappointed by widespread reports of FM Plassnik's critical comments on U.S. missile defense cooperation with Poland and the Czech Republic at recent GAERC and Gymnich meetings. Schuessel came to the foreign minister's defense. He said he had read Plassnik's interventions carefully and found them to be "balanced." He maintained that Plassnik (a long-time protege of Schuessel) had simply been making the point that EU members needed more information about Poland's and the Czech Republic's plans. There was a great deal of uncertainty, even fear, on this subject among ordinary citizens of Europe; if governments were to speak to those fears, they needed more information than they have at present. MIDDLE EAST -------------- ¶6. (C) In a brief exchange on the Middle East, Schuessel offered that there were "a few signs of hope" for the first time in several years. Such hopes needed to be nourished, which was why FM Plassnik had invited Abu Amr to Vienna. "He is one of the good guys," stated Schuessel and we need to work with him. ERP FUNDS AND THE BALKANS -------------- ¶7. (C) During an extended discussion of possible new uses for residual ERP (Marshall Plan) funds in Austria, Schuessel was not supportive of a new program toward the Balkans. The EU, he said, was already very forward leaning -- financially and politically -- toward giving the Balkans a European prospective, and Austria was "at the core of the EU" in this respect. In the former Chancellor's view, the best use for ERP funds was to support R&D efforts in Austria. (Comment: This is Schuessel's long-held position, and one that lay behind 2004 modifications to the ERP framework in Austria.) However, if one were to consider new projects outside the country, working with carefully selected individuals and/or NGO's that have a proven track record would be a good approach, Schuessel offered. Specifically, he suggested the possibility of engaging Austrian NGOs currently active in training doctors and other kinds of vocational training. KILNER