(C) NTI FUEL BANK INITIATIVE: GERMANY WORKING

C O N F I D E N T I A L BERLIN 001058 SIPDIS, STATE FOR ISN AND EUR E.O. 12958: DECL: 08/04/2033 TAGS: KNNP TRGY ENRG KSTC IAEA PARM GM SUBJECT: (C) NTI FUEL BANK INITIATIVE: GERMANY WORKING WITHIN THE EU REGARDING DONATION DECISION REF: A. STATE 68313 ¶B. BERLIN 821 Classified By: Global Affairs Unit Chief Don L. Brown for reasons 1.4 (b) and (d). ¶1. (C) German MFA Commissioner for International Energy Policy, Viktor Elbling, told EMIN and EconOffs in a July 31 meeting that Germany is working within the EU to formulate a common NTI Fuel Bank Initiative (NTIFBI) position and expects a donation decision by this September. Elbling complimented the NTIFBI as a "good initiative" that is philosophically consistent with the Multilateral Enrichment Sanctuary Program (MESP) German proposal. However, he cautioned that the NTIFBI's lack of structure is weakening an EU decision for support. ¶2. (C) Asked for his thoughts on the prospects of NTI, Elbling allowed that NTI is a good initiative and that it is compatible with MESP. However, he cautioned that "everyone" should be reflective about the NTIFBI's "many political implications" and the need to decide exactly how this fuel bank should work. We emphasized to Elbling that all fuel bank initiatives have the same basic goals of discouraging enrichment and that although the NTI has a relatively loose framework, this allows for greater flexibility to work with other fuel bank initiatives. We also pointed out that given the multitude of fuel bank proposals floating around the NTIFBI may offer an excellent opportunity to gain forward momentum. Elbling acknowledged this and hoped that the Non-Aligned Movement (NAM) countries would see fuel banks as an opportunity to gain access to nuclear fuel without discrimination and thus thwart the incentive to develop their own enrichment capabilities. Elbling said Germany still believes the MESP structure would be "a real alternative" and indicated that MESP and the NTIFBI could work constructively together under IAEA control. ¶3. (C) Comment: Elbling expressed a more open tone towards the NTIFBI than did Dietrich Becker, his officer heading the Unit for Nuclear Energy and Non-Proliferation, on June 11 (see REF B). Elbling indicated (contrary to what Becker shared) that the EU is considering pledging support for the NTIFBI before the grant deadline, although he gave no indication whether the potential dollar amount would satisfy the $45 million still needed. At the very least, we should expect some kind of response from the EU by the IAEA General Conference this September. KOENIG