WELCOME TO BERLIN

S E C R E T SECTION 01 OF 03 BERLIN 000087 SIPDIS NOFORN SIPDIS E.O. 12958: DNG: CO 01/18/2018 TAGS: PGOV PREL GM SUBJECT: WELCOME TO BERLIN Classified By: DCM JOHN KOENIG FOR REASONS 1.4 (B) AND (D) ¶1. (C) Madam Secretary: Mission Germany looks forward to welcoming you to Berlin January 22-23. In addition to discussions with your P5-plus-1 counterparts on Iran, your bilateral meeting with Foreign Minister Steinmeier will provide an important opportunity to advance our cooperation. Germany is focused on bitterly fought state elections that will be a barometer for next year's nationwide vote. (Chancellor Merkel will be unable to meet with you because she is committed to campaigning in support of Roland Koch and Christian Wulff, two of her party's most important figures, who are battling for re-election in their respective states January 27.) The campaign rancor increasingly suffuses the day-to-day work of Merkel's Grand Coalition, which is growing more fractious. ¶2. (C) Merkel's conservatives and Steinmeier's Social Democrats resemble the proverbial couple that hated each other but stayed together for the sake of the children: the lack of any other viable coalition options is what sustains the partnership between the CDU/CSU and the SPD at this point. On key priorities like Afghanistan and Kosovo (and on certain aspects of Iran),the gap between Merkel and Steinmeier is not so wide, and cooperation with the U.S. is not degraded by domestic politics. Differences are becoming more evident on some foreign policy issues however: Foreign Minister Steinmeier's invitation to Syrian Foreign Minister Muallem, over strong opposition from the Chancellery, is just the latest example. While the partisanship may ebb after this round of elections concludes next month, we can expect Merkel's government to be more hamstrung between now and the fall of 2009 than was the case in its first two years in office. STEINMEIER'S EVOLVING POLITICAL ROLE -------------- ¶3. (C) Steinmeier, who came to office with a reputation as a technocrat, has benefited like most of his predecessors from the visibility conferred on the Foreign Minister. He has become the most popular SPD politician in Germany and the second most popular overall, trailing only Merkel. He recently was named Vice Chancellor, was elected as one of three national deputy chairmen of the SPD, and announced he will run for a Bundestag seat in 2009. Steinmeier is regarded, both within the SPD and among the general public, as an attractive possible chancellor candidate in 2009, should SPD Chairman Beck stumble. ¶4. (C) With Steinmeier's evolution from technocrat to political leader, he must cultivate rank-and-file support within the SPD to a much greater extent than before. This is a particular challenge for him, because on domestic issues he is seen as relatively conservative: he was a key architect of Gerhard Schroeder's economic reforms and watched as Kurt Beck and the SPD's left wing began to roll them back last fall. This is all the more reason for Steinmeier to seek out foreign policy issues like arms control and disarmament on which he can strike chords that resonate with SPD voters (regardless of the shortcomings we find in these ideas). Similarly, in policy toward Russia, the former Soviet space, and the Middle East, Steinmeier misses no opportunity to evoke the legacy of Willy Brandt, elevating dialog and economic engagement above open expression of disagreement as tools of diplomacy. ¶5. (C) These internal factors amplify the tendency of Steinmeier and his Foreign Office to pursue initiatives not in harmony with the Chancellor's instincts or policy preferences. Germany has a weak foreign policy coordination process, and the ability of the Chancellor and her staff to rein in the Foreign Office is limited. A result is that Germany does not always speak with a single, clear voice. IRAN -------------- ¶6. (S) The Foreign Office and Chancellery assure us they remain committed to a strong third UNSCR on Iran, and they have taken this position publicly, including in Steinmeier's public comments after meeting with el-Baradei January 17. German officials point to pressures from their business community (as well as from the Finance Ministry and the CSU-controlled Economics Ministry) as constraints. BERLIN 00000087 002 OF 003 Similarly, they emphasize the importance of the broadest possible international coalition, and thus value highly efforts to keep all members of the P5-plus-1 on board. Privately, senior officials in the Chancellery and Foreign Office have expressed frustration that the NIE has complicated international diplomatic efforts. Merkel said publicly this week that the NIE had slowed the momentum behind further UN sanctions; she simultaneously underscored the seriousness of Iran's nuclear activities and the need for international solidarity. AFGHANISTAN -------------- ¶7. (C) Encouraging greater German involvement in Afghanistan is a key priority of Mission Germany; we have made some progress, but it has been painfully slow. Interestingly, we encounter as much resistance from the Chancellery and CDU-led Ministry of Defense (which has less influence in the German interagency process) as we do from Steinmeier and the SPD. In some respects, the SPD is more prepared than the CDU/CSU to contemplate steps like sending military trainers to the south. In advance of the April NATO Summit, Germany is contemplating additional contributions, although major new commitments (particularly in the south) probably are a bridge too far at present. Germany may agree by the end of January to take over responsibility for the 150-man quick reaction force (QRF) in the north. This is a step we should encourage, because it would represent the first German ISAF contingent deployable on short notice (including possibly in exceptional and temporary circumstances outside the north), which would be a qualitatively new and significant step toward greater involvement in kinetic operations. Secretary Gates' recent proposal to deploy German Special Forces under ISAF also presents an opportunity to refocus German thinking in a beneficial way. RUSSIA -------------- ¶8. (C) There are significant differences between the Chancellery and the Foreign Office on Russia, which invites Russian wedge-driving. Steinmeier was the first foreign visitor to get a meeting with presidential candidate Medvedev after his nomination (a meeting with President Putin was thrown in to boot). Merkel has never shied away from plain talk about disturbing trends inside Russia. Lately, the combination of Russian CFE suspension, backsliding on democracy, and intransigence on Kosovo has pushed even some in the SPD to offer criticism. In particular on CFE, Steinmeier's instinct will remain to try to engage Russia -- we will need to keep up pressure not only among the Quad partners, but also from other key allies (e.g. Turkey and Norway) to make clear that German unilateral CFE initiatives put Quad and NATO solidarity at risk. KOSOVO -------------- ¶9. (C) We discern very little daylight between the Chancellor and Steinmeier on Kosovo, and there is keen interest to work closely with the U.S. to resolve status and seal the EU's leadership role. While the Bundestag will engage in intensive debate following an anticipated coordinated declaration of independence, we expect the multiparty consensus in favor of independence and the KFOR and ESDP missions to hold. ECONOMICS -------------- ¶10. (C) Merkel highly values the U.S.-EU Transatlantic Economic Council (TEC) -- a centerpiece of her 2007 EU presidency -- aimed at reducing regulatory barriers to transatlantic trade and investment. She is concerned, however, about maintaining the momentum in the TEC and fears that the European Commission and future EU presidencies (including France) may lose enthusiasm for the project. German officials also worry that a changing U.S. Administration could derail what they regard as a highly successful new transatlantic economic instrument; we should emphasize our continued commitment to the TEC, and encourage the Germans to maintain a leading role in it. The German economy is expected to grow at only 1.7 percent this year. Previous higher estimates were lowered due to rising oil BERLIN 00000087 003 OF 003 prices, the strength of the Euro, slower U.S. growth, and continuing turmoil in financial markets. German economists and business leaders are also worried about the possibility of a national minimum wage as well as increased labor union demands for wage increases, both of which could affect the economy adversely. Merkel plans to highlight employment gains -- as opposed to minimum wages -- as the focus of her economic plan looking ahead to the 2009 national elections. CLIMATE CHANGE -------------- ¶11. (C) We understand that Steinmeier may raise climate change with you. Chancellor Merkel and the rest of Germany's political leadership remain serious about pursuing aggressive international measures to meet the challenges of global warming. Merkel has made climate change a priority of her Chancellorship and enjoys the overwhelming domestic support on this. Merkel's support for mandatory, targeted global limits on greenhouse gas (GHG) emissions and an international cap-and-trade regime reflects a deep-seated belief that only drastic, concerted efforts on the part of the international community can slow -- and ultimately reverse -- the human contribution to global warming. If anything, Steinmeier supports tougher standards. While the Germans have been willing to consider alternative solutions, such as new technologies for clean coal and renewables, fundamental differences in our approaches to the issue of climate change remain, and could lead to more public disagreement in the future. For example, while Germany will send a delegation to the January 30 Major Economies Meeting (MEM),the German Government remains skeptical about the value that the Major Economies Process (MEP) adds to the UNFCCC track. The Germans are particularly concerned about the need to avoid duplication of effort in the various other climate change-related forums, including the UNFCCC and the G-8. TIMKEN JR