Scenesetter for Representative Sarbanes and former

UNCLAS SECTION 01 OF 04 ATHENS 000716 SENSITIVE SIPDIS FOR H AND EUR/SE: PLEASE PASS URGENTLY (MAY 22) TO REPRESENTATIVE SARBANES E.O. 12958: N/A TAGS: PGOV PREL ECON SOCI GR SUBJECT: Scenesetter for Representative Sarbanes and former Senator Sarbanes ATHENS 00000716 001.2 OF 004 SENSITIVE BUT UNCLASSIFIED -- PROTECT ACCORDINGLY FROM AMBASSADOR SPECKHARD TO REPRESENTATIVE SARBANES ¶1. (SBU) Dear Senator and Congressman, we are looking forward to your visit. I wanted to offer you the following background information that you may find interesting in preparing for your trip. I look forward to the opportunity to meet and discuss some of these issues in more detail when you are here. The Embassy stands ready to assist to make your visit a productive and enjoyable one. -------------- INTRODUCTION -------------- ¶2. (SBU) Greece's center-right New Democracy government of Prime Minister Kostas Karamanlis seeks to maintain good relations with the U.S., though the U.S.-Greece partnership is complex and at times challenging. Greek-U.S. military- to-military cooperation is good, particularly at the U.S. Navy base at Souda Bay on Crete, and Greece is among the largest purchasers of U.S. military equipment. Greece's participation in NATO, however, is politically sensitive with weak public support for NATO operations. Some of the Embassy's priority goals in Greece include: -- Promoting stability in the Balkans in light of Kosovo's declaration of independence and Greece's opposition to the Former Yugoslav Republic of Macedonia's bid to join NATO until the name issue is resolved; -- Further cooperation in combating Greek domestic and international terrorist threats and in strengthening Greek borders against transiting terrorists; -- Increasing Greek-Turkish cooperation and stability in the Aegean and on Cyprus; -- Encouraging Greece to contribute to European energy security through diversification as Greece develops as an energy transit hub; and -- Expanding trade with the U.S. ¶3. (SBU) I believe the timing of your visit provides a unique opportunity to reinforce a strong message of partnership and shared values between the United States and Greece. The recent events in the Balkans and the NATO Summit have created a difficult political environment for U.S. supporters in Greece and a reaffirmation of our continued interest in a strong and cooperative relationship will be much appreciated. 
 ¶4. (SBU) Your visit also provides an opportunity, if you desire, to make progress on issues of great importance to the future of Greek-U.S. cooperation in education by: -- Encouraging the GoG to recognize degrees from private, including American universities in Greece; -- Encouraging flexibility in application of new tax law to educational institutions with an American affiliation; and -- Encouraging reciprocity for American students in Greece so they receive multiple-entry visas for the duration of their studies in Greece. -------------- MACEDONIA NAME ISSUE -------------- ¶5. (SBU) Greeks consider the unmodified use of "Macedonia" a usurpation of their heritage and warn that it could encourage irredentism towards Greece's northern province of the same name. We have repeatedly urged both sides to engage in negotiations led by Matthew Nimetz under the auspices of the United Nations and have stated that the U.S. would accept whatever solution Athens and Skopje agreed upon through the negotiations. In the aftermath of Greece vetoing the NATO invitation at the April 2008 NATO ATHENS 00000716 002 OF 004 Summit in Bucharest, we continue to urge both countries to work for a mutually agreeable solution through the UN/Nimetz process. There has been little progress in this area, pending the completion of Macedonia's June national elections. The Administration is hopeful that an agreement could be reached by July 9th, when Croatia and Albania will sign the NATO Accession Protocol to officially launch accession talks. Greek counterparts, however, are skeptical this target can be met, given the time it will take to organize and empower a new government in Skopje. The government of Greece, however, is signaling its desire and intent to move swiftly in finding a solution after the elections. -------------- KOSOVO -------------- ¶6. (SBU) Kosovo declared its independence on February 17, 2008, shortly after Serbia's January 2008 elections. Kosovo has been formally recognized by more than 40 United Nations Member States, including 19 individual EU member- states, though a number, including Greece, have not. Despite this, Greece maintains substantial military forces in NATO's Kosovo force and is providing personnel and support to the EU's "Rule of Law Mission" in Kosovo. The Administration has encouraged the GOG to recognize Kosovo in the interest of supporting stability. You may want to thank them for their support for the EU Mission and encourage them to continue to use their good relations with Serbia to urge a forward-looking approach to Serbia's future in the European and Euro Atlantic community. -------------- ENERGY ISSUES -------------- ¶7. (SBU) It will be useful for you to praise Greece's new role as an energy pipeline corridor to Western Europe in your meetings, while stressing the importance of Greece using that role to contribute to European energy security. It can do so through rapid completion of the Turkey-Greece- Italy Interconnecter (TGI),which is the first pipeline to carry Caspian gas to Europe without going through Russia or through Russian-controlled pipelines. It is therefore an important step in realizing our Southern Corridor strategy of increasing European energy diversity and security. TGI will also help Greece: whereas currently 80 percent of Greece's natural gas supplies come from Gazprom, once TGI becomes fully operational by 2012, this dependence could be reduced to under 50 percent. ¶8. (SBU) Greek cooperation on energy with Russia has increased significantly over the past two years. On April 29, PM Karamanlis and outgoing Russian President Putin signed an agreement on cooperation on the South Stream gas pipeline. While some view this pipeline as a competitor to TGI, TGI is far more advanced in design and development and likely will not be impacted. Meanwhile, Greece, Bulgaria, and Russia have agreed to support the Burgas- Alexandroupolis Bosporus Oil Bypass Pipeline (BAP) and share ownership, which we support insofar as it is commercially feasible. -------------- VISA WAIVER PROGRAM -------------- ¶9. (SBU) Greece is the only one of the original EU 15 not participating in the U.S. Visa Waiver Program (VWP). Secretary Rice sent a letter to DHS Secretary Chertoff in August 2007 to officially nominate Greece for the program, after Greece introduced a new biometric passport that meets all ICAO standards. A DHS-led team of technical experts visited Greece in November and positively assessed its eligibility. Negotiations are ongoing, with another state- led delegation to Athens due on May 27-28. (Greece asked for a short pause in February to consult within the EU.) Greece's inclusion in the VWP would boost the U.S. image, and we are working hard to make this happen this year. ATHENS 00000716 003 OF 004 -------------- GREECE-TURKEY-CYPRUS -------------- ¶10. (SBU) Against the sway of public opinion, the GOG remains supportive of Turkey's EU accession hopes and understands that a Turkey in the EU is in Greece's long- term strategic interest. Greece and Turkey still differ on issues such as Aegean air/seaspace demarcation. The recent cancellation of a Greek-initiated Aegean exercise, when NATO declined its support, aggravated relations, yet rapprochement remains the overall leitmotif oftions. On Cyprus, the ic Ledra Street cQvo sides and a renewed QUN-brokered July 8th 2rus problem, although many of the tough political issues remain to be addressed. -------------- EDUCATION -------------- ¶11. (SBU) Greece's chronically-underfunded public education system continues to be a volatile political issue. In 2001, then opposition party New Democracy (ND) proposed an amendment to Article XVI of the Greek constitution - the article which stipulates that higher education is provided free in state institutions and prohibits recognition of private universities - to allow recognition of degrees from private, non-profit universities in Greece. The proposal was rejected by then-ruling PASOK. The issue was revisited in 2006 by the current ruling ND government, which sparked months of public protest, teacher strikes, and student demonstrations. In a turn of events from 2001, the 2006 debate had the support of PASOK leader Papandreou. PASOK backpedaled on this support, however, and last week during renewed Parliament discussion on Article XVI, PASOK was not present. ¶12. (SBU) In a May 18 interview, leading PASOK figure Anna Diamandopoulou said, apparently with Papandreou's support, "Reform of Article XVI is important . . . but PASOK's priority is public education, from kindergarten to university." On May 19, Education Minister Stylianides met with the PM and said afterwards, "the Greek Government believes in having non-state universities through revision of Article XVI." Stylianides is now set to implement an "education framework law" from 2006 that involves administrative changes in state universities. This has caused new sit-ins and has led to the postponement of upcoming Rector elections. ¶13. (SBU) When meeting with PASOK President George Papandreou in Greece, we recommend you highlight the following points: -- Domestic education policy is a matter for the Greek people to decide. However, we support the education reform process, and the recogition of degrees for quality, private non-profit colleges and universities in Greece; and - We are ready to discuss and help build on the contribution of quality, American-affiliated institutions in Greece, and the positive U.S. experience with both public and private school options. ¶14. (SBU) In addition, a recent tax law has eliminated tax exemptions for previously exempted schools and increased taxes for all educational institutions in Greece. Long- established schools, like the American Farm School in Thessaloniki, are in danger of closing because of new tax obligations that could be as high as 500,000 Euro per year. Other schools, like Anatolia College, Pinewood School, and the American College of Greece are also threatened. The Ministry of Finance recently confirmed they would seek an amendment as early as June exempting the American School of Classical Studies and potentially other foreign ATHENS 00000716 004 OF 004 archaeological schools from the new tax law. There is no word on a resolution for the other schools, however, and tax filing deadlines begin May 26. ¶15. (SBU) During your meetings with Prime Minister Karamanlis and other Ministers, including Parliament Speaker Sioufas, we recommend you underscore the points raised with Papandreou, in addition to the following points: -- According to EU court directive, Greece will soon have to recognize degrees from private European institutions. We ask that this recognition include U.S. institutions; -- A recent tax law eliminated property tax exemptions for all educational institutions in Greece. Long-established schools, like the American Farm School in Thessaloniki, are in danger of closing because of new tax obligations that could be as high as 500,000 Euro per year. Other schools, like Anatolia College, Pinewood School, and the American College of Greece in Athens are also threatened. They all employ and educate thousands of Greek citizens. (For Karamanlis, who is from northern Greek: stress the importance of the Farm School, which gives poor northern Greek children a chance to go to school for free and hires many northern Greek teachers and staff); -- It is important to keep these long-standing, high- quality, American-style institutions operating, as they contribute both to education in Greece and to understanding between our countries; -- The Ministry of Finance recently confirmed they would seek an amendment as early as June exempting foreign archaeological schools from the new tax law. There is no word on a solution for the other schools, however, and tax filing deadlines begin May 26. We hope that the taxation burden of these institutions can be resolved favorably and soon; and -- Additionally, American students studying in Greece currently receive a single-entry, 90-day visa, while Greek students studying in the U.S. receive multiple-entry visas for up to four years. We seek reciprocity. SPECKHARD