GREECE ON IRAN: CARROTS BETTER THAN STICKS, BUT

S E C R E T SECTION 01 OF 02 ATHENS 000874 SIPDIS E.O. 12958: DECL: 06/18/2018 TAGS: AORC EFIN ETRD ETTC EUN GR IR KCRM KNNP KTFN PARM, PGOV, PINR, PREL, PTER, SNAR, TRGY, UNSC SUBJECT: GREECE ON IRAN: CARROTS BETTER THAN STICKS, BUT GREECE "WON'T BREAK EU CONSENSUS" REF: A. SECSTATE 64530 ¶B. BRUSSELS 924 ¶C. USEU/SYNDER E-MAIL OF 06/17/2008 ¶D. ATHENS 651 ¶E. ATHENS 833 Classified By: DCM THOMAS COUNTRYMAN. REASONS 1.4 (B) AND (D). ¶1. (C) SUMMARY: Greek MFA officials dealing with various aspects of Iran issues indicated that Greece did not intend to break an EU consensus on stiffening Iran sanctions, but that it had concerns about the direction of Iran policy. Greece believed the evidence did not indicate the Iranians were actually trying to acquire a nuclear weapon at this point. As for the efficacy of sanctions, the Iranians were in a wait-and-see mode in anticipation of the U.S. Presidential election, and further sanctions now would unlikely impact their behavior. We pushed back hard, noting that Iranian behavior did appear to be responsive to international pressure and that it was particularly important now to demonstrate Western unity on Iran policy. Greek reluctance to stiffen sanctions appears to be motivated by several factors, including a principled belief that sanctions are ineffective, Greek shipowners' business dealings with the Iranians, and a GOG desire to play a "bridging role" between Iran and the West. END SUMMARY. ¶2. (C) On June 17, EmbOffs delivered ref A demarche on the updated P5 1 package for Iran to Counselor on Disarmament Issues Pantelis Margaris and First Secretary Loukas Tsokos of the MFA D1 Directorate for UN and International Organizations. Margaris provided a pat answer, stressing that Greece shared the cncerns of its allies and supported Solana's icentives package to Iran. Furthermore, the GOG believed Iran had to answer questions posed by IAEA Director General El Baradei regarding the latest developments of concern, specifically the centrifuge machines and metallic spheres. At the same time, he said Iran needed a diplomatic "face-saving" solution. "Iran is a nation that needs special handling, given its long history similar to ours. We need to pay attention to the long history and try not to damage its face." Margaris added, "We hope to breathe fresh air into this problem and find a solution with diplomatic means." ¶3. (S) In a June 18 meeting with MFA A6 Directorate for Middle East and Arab Countries deputy head Giorgos Ayfantis, DepPolCouns also delivered ref A demarche and took the opportunity to raise the question of reported Greek foot-dragging in Brussels on strengthening Iran sanctions, particularly in advance of the expected June 23 designation of Bank Melli (refs B, C). DepPolCouns stressed that the rest of the EU was getting on board and asked whether Greece was concerned about ending up the lone hold-out. Ayfantis said Greece would not be the last to approve further sanctions, if that was the way the EU was headed, and that Greece would not break an EU consensus. At the same time, Ayfantis signaled that Greece had concerns about the direction of EU Iran policy. ¶4. (C) Ayfantis said Greece desired a broader discussion at the EU on Iran policy. It was important to establish an EU red line on Iran. No one wished to see Iran acquire nuclear weapons, but at this point the evidence did not indicate that Iran was actually trying to build a weapon. It was much more likely that the Iranians were trying to acquire enough Qtrate that they could Qwanted to. The Irania. gain the respect and clout in the Middle East and the world they thought they deserved. ¶5. (C) As for the immediate question of toughening sanctions, Ayfantis said Greece believed whatever we did at this point would have little impact on Iranian behavior. The Iranians now had gone into a wait-and-see mode in anticipation of the U.S. Presidential election. They wanted to see who won the election and would then calculate their next moves based on what they perceived their options to be under a McCain or Obama Presidency. Given this dynamic in Teheran, Greece believed now was not the time to try to stiffen sanctions. Greece assessed that waiting several months until the election made no difference in the larger scheme of things, especially since Iran was unlikely to change its behavior in the short term. ¶6. (C) DepPolCouns pushed back, noting that the evidence did, in fact, indicate that the Iranians were responsive to international pressure, as the U.S. NIE of last December had shown. Indeed, the Iranians appeared more responsive to sticks than carrots. Furthermore, if we assumed that Iranian policy was driven by a desire to gain respect on the international scene, it was all the more important now, when a consensus was developing in the EU for tougher sanctions, for Greece to demonstrate that there were no cracks in Western unity. Iran needed to gain international respect through cooperation and playing by the rules, not through scare tactics and defying the international community. Ayfantis appeared to take this on-board and ended the meeting by reiterating that Greece, despite its misgivings, would not break an EU consensus. ¶7. (C) COMMENT: Greek reluctance to strengthen sanctions on Iran seems to be driven by several factors. One is Greece's oft-stated belief that, in principle, cooperation and discussion are more effective than sanctions. Another factor is the economic interests of Greek shipowners, who apparently have considerable dealings with the Iranians and are a major player in Greek domestic politics with great influence over the Karamanlis government (ref d). A third factor is Greece's historical -- and apparently growing -- self-image as a "bridge" between East and West, whether in terms of Iran or Russia or the Arab states/Palestine and Israel (see, for example, ref e). To accomplish the latter, Greece believes it needs to show that it is an honest broker and more accommodating than others. Greece may, indeed, be able to play such a role, but it would require that Greece produce results. ¶8. (C) COMMENT CONT.: As for the immediate problem of Greece joining the growing EU consensus on stiffening Iran sanctions, including designation of Bank Melli, Greece on just about all other issues has not been willing to buck EU consensus (the one exception is the Macedonia name issue, where it perceives its vital interests are at stake). We have put the Greeks on notice that they are falling behind the EU curve on Iran sanctions and that we are watching. We believe further discussion in Brussels highlighting Greece's increasing risk of isolation could have a positive impact. SPECKHARD