FOREIGN MINISTER DE GUCHT'S SENIOR CABINET OFFICER

C O N F I D E N T I A L SECTION 01 OF 02 BRUSSELS 001457

SIPDIS

STATE FOR EUR/WE SHARP, EUR/RUS, EUR/NB, WHA/AND,
EBB/ENERGY, EUR/ERA, STATE PASS TREASURY VIMAL ATUKORALA;

E.O. 12958: DECL: 09/16/2018
TAGS: PREL PGOV ENRG RU BL VE BE
SUBJECT: FOREIGN MINISTER DE GUCHT'S SENIOR CABINET OFFICER
FOR BILATERAL RELATIONS OFFERS VIEWS ON VENEZUELA, BOLIVIA,
EU ENERGY POLICY, AND RUSSIA

REF: STATE 99473

Classified By: POL/ECON COUNSELOR Richard Eason for reasons 1.4 (B) & (
D)


1. (C) Summary: During a September 19 call on Belgian MFA
Deputy Head of Cabinet for Bilateral Affairs Thomas Lambert,
Poloffs received the Belgian take on reftel demarche, PM
Leterme's current trade and investment trip to Sochi, Russia,
and the EU's evolving energy policy. The GoB was well aware
of events in Venezuela and Bolivia. Lambert informed Poloffs
the EU has sent signals through commercial channels and may
cancel further EU - Andean Community talks that include
Bolivia and Ecuador because of these two countries' pronunced
anti-trade rhetoric. Lambert emphasized that Premier
Leterme's visit to Sochi, Russia, was for economic, not
political purposes. Belgium was anxious not to isolate
Russia, since that could prove politically
counter-productive. The GOB has been frank with Russia
criticizing the gaping hole in Russia's economy caused by its
economic dependence on energy exports without investing in
energy infrastructure. Foreign investors, including key
Belgian enterprises are already pulling money out of Russia.
Lambert provided insight into the EU's evolving views on
energy prior to the new policy expected in mid-November.
Russia's recent behavior, efforts by newer EU members, and
the need to meet climate change and renewables targets has
led to a momentum for policy change. Lambert predicted the
EU would reduce its dependency on energy imports
significantly within the next ten years. He also noted that
Russia and its role in the Baltics and nearby countries would
be central to the agenda of Benelux - Baltic talks scheduled
for mid-October. End Summary.

Venezuela and Bolivia
--------------


2. (C) Poloffs delivered reftel points September 19 to MFA
Deputy Head of Cabinet Thomas Lambert. Lambert said the GOB
was well aware of the situation in Venezuela and Bolivia,
noting Venezuela has been problematic for some time. Signals
of displeasure have been sent at the EU level. Specifically,
the EU is becoming increasingly frustrated by Bolivia (and
Ecuador's) increasingly pronounced anti-trade rhetoric, which
has made EU dialogue with the four-member Andean Community
challenging. He hinted that the E.U. is considering moving
to a purely bilateral commercial dialogue or one with the
other Andean countries but excluding Ecuador and Bolivia.

Leterme's Russia Trip
--------------


3. (C) Poloff inquired about Premier Yves Leterme's current
visit to Sochi, Russia. Lambert called it a primarily
non-political visit. A political discussion occurred
previously during the "frank and open" meeting between FM
DeGucht and Lavrov. DeGucht's feedback from this meeting was
fed to the French E.U. presidency prior to meetings with
Putin. When asked whether the GOB had reconsidered
proceeding with the visit, given the events in Georgia, he
offered an emphatic no. The Belgian position on Russia is
that to de-escalate the situation, lines of communication
must remain open. "We must continue to talk. We do not want
to confirm in their minds that the West is plotting against
them."

Russia and E.U. Energy Policy
--------------


4. (C) In its commercial diaogue with Russia, the GOB has
pointed out Russia's weak spot: energy. Belgian analysis
shows that the economy is based entirely on energy exports,
with the rest of the economy in shambles. Russia is creating
a bottleneck for itself and its European trade partners
through its failure to invest in energy infrastructure. He
noted recent foreign exchange outflows from Russia, as
investor confidence in the Russian economy falls. He noted

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that several major Belgian firms were scaling back
considerably; risk management analysts from a major Belgian
bank have requested meetings to obtain the MFA view. Lambert
noted the impact economic problems would have for Putin, with
his oligarch power base.


5. (C) Lambert was enthusiastic about EU efforts to improve
energy efficiency, which will be one of the main foci in the
new EU energy policy expected in mid-November. Looking
toward the Belgian E.U. Presidency in 2010, the GOB has been
working closely with current and future presidency reps. The
GOB has noted the Czechs, French and Swedes are all
reassessing priorities. Lambert predicts the E.U. will lower
signicantly its energy dependency within ten years. Lambert
also mentioned a paper provided by the Embassy of the
Netherlands to the Belgian MFA, which hints at a shift in
Dutch energy policy. Lambert found the movement surprising,
as the Netherlands has traditionally taken a different view
from Belgium, due to Dutch energy reserves. All in all,
there is considerable momentum for reassessing the E.U.
position. The primary challenge in internal deliberations
occurs when discussions of external market concerns lead to
discussion of internal markets, where the French and Germans
strongly defend their national interests.


6. (C) Lambert also argued that the E.U. needed to show
solidarity with its new members by acknowledging concerns of
central European members. Though Lambert noted that even in
Soviet days Russia never shut down the gas flow to the West,
and limiting energy supply is not an easy weapon to use,
there are in fact other non-geopolitical goals that justify a
change in policy. Reducing imports and increasing energy
efficiency would also help meet climate change and renewable
energy goals. Lambert said Europeans are well aware of the
respectable activity in the U.S. on alternative energy and
climate change by US states, universities, and private
interests.

Benelux - Baltic
--------------


7. (C) The Benelux countries will be meeting mid-October with
the Baltic nations outside of Tallin, Estonia. The agenda
will be heavily Russia focused: Energy and Russia, Georgia
and Russia, and Russia and Its Neighborhood. In Lambert's
opinion, the older members states that had earlier tended to
dismiss East European fears about Russia, now realize they
can learn things from the new members that can add nuance to
their dialogue with Russia.

FOX
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