SCENESETTER FOR VISIT OF DEPUTY SECRETARY

UNCLAS SECTION 01 OF 05 DUBLIN 000616

SENSITIVE
SIPDIS

FROM AMBASSADOR FOLEY TO DEPUTY SECRETARY NEGROPONTE

E.O. 12958: N/A
TAGS: PGOV PREL ECON ETRD EINV EAIR SENV MOPPS MARR
EI
SUBJECT: SCENESETTER FOR VISIT OF DEPUTY SECRETARY
NEGROPONTE TO IRELAND


1. (U) Welcome to Ireland. We look forward to your visit.
You will arrive against a backdrop of an Irish Government led
by Prime Minister Brian Cowen that is facing economic woes
and uncertain relations with the European Union following its
rejection of the Lisbon Treaty in a referendum in June 2009.
However, the peace process in Northern Ireland, while
difficult, continues to proceed successfully and Ireland is
increasingly deeply engaged in foreign affairs through the
European Union and the United Nations.

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Domestic Politics/Lisbon Treaty
--------------


2. (U) Ireland's May 2007 general election brought Fianna
Fail, led by Prime Minister (also known as the Taoiseach,
TEE-SHUCK) Bertie Ahern, into a third successive coalition
government; with the Green Party and the Progressive
Democrats as partners. On April 2, 2008, Ahern caught
Ireland by surprise by announcing his resignation. He was
succeeded on May 7 by his heir designate, former Fianna Fail
Deputy Party Leader and Finance Minister Brian Cowen.
Previous to holding the Finance Minister portfolio, Cowen was
Foreign Minister from January 2004 through September 2004.
There have been no significant changes in U.S.-Irish
bilateral relations or Irish foreign policy under Cowen's
leadership. On November 9, the Progressive Democrats
announced they will disband as a political party. However,
this is not expected to have any impact on the governing
coalition.


3. (SBU) Looming large on the political landscape is the
Irish rejection of the Lisbon Treaty referendum on June 12.
Since then, Prime Minister Cowen has attended two European
Council meetings, where the other EU Heads of Government
agreed that Ireland needed time to analyze the outcome of the
vote, and consult internally and with other EU member states
to devise a way forward for EU reform. The European Council
has laid down two markers: the treaty ratification process
will proceed throughout the EU (currently 24 of 27 EU member
states have ratified the Lisbon treaty); and the European
Council will revisit the issue of Ireland's rejection of the
Treaty during its December meeting. Ireland is on the hook
to suggest ways out of the dilemma.


4. (SBU) Recently, Cowen has been discretely floating the
concept of holding a second referendum in late 2009 with
political declarations to protect Irish positions on
abortion, neutrality, and taxation. While speaking at a
business roundtable on October 30, he stated that if Ireland
does not proceed with the next stage of the ratification
process "there will be consequences." However, most other EU
member states want the Lisbon Treaty to be fully ratified
before the June 2009 European Parliament election so the
election can be held under new Lisbon Treaty rules.


5. (U) Long a vital element in the U.S.-Irish relationship,
emigration to the U.S. declined significantly with Ireland's
economic boom in the 1990s and 2000s. In the past several
years, Ireland experienced high levels of inward migration,
mostly from Eastern European members of the EU. However, as
the global recession has eliminated large numbers of jobs in
the construction industry, that trend seems to be reversing.
There is now a renewed interest in emigration to the U.S.,
and immigrants in Ireland are experiencing a disproportionate
effect from the economic downturn.

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Difficult Economic Times Ahead
--------------


6. (U) Until the recent economic crisis, Ireland had one of
the fastest growing economies in the world over the past
decade. Ireland's Celtic Tiger transformation resulted from
a combination of low corporate tax rates, industrial peace,
pro-investment policies, fiscal responsibility, and effective
use of EU support funds. These factors (in addition to
staunchly pro-American business policies) have led over 600
U.S. firms to establish operations in Ireland; the stock of
U.S. investment in the country is, in fact, significantly
more than the U.S. combined total in the BRIC countries
(Brazil, Russia, India, and China). Ireland also became a
magnet for inward immigration, attracting over 100,000 new
arrivals since the accession of ten new EU Member States in

2004. With the economy's slowdown, however, leading
economists are predicting net migration out of Ireland for
the next two years at least.

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7. (U) This year, Ireland's economy began to stumble. The
government predicts a budget deficit of 6.5 percent of GDP
and that the economy will contract by 0.8 percent in 2009.
Leading economists view both figures as overly optimistic.
The government introduced an austere budget for 2009
featuring unpopular spending cuts (in health and education in
particular) and tax increases. In addition to the worsening
macroeconomic picture, the Irish banking system was on the
verge of collapse prior to the government stepping in on
September 30 and guaranteeing the liabilities of the six
major Irish banks. In spite of this guarantee, there is
still a worry among market watchers that the government will
be forced to follow some of its European neighbors and inject
fresh capital into the banking system. The Irish property
market bubble burst in 2008 (with prices falling by up to 40
percent in some sectors of the market) prompting a worry that
the banks would end up holding a significant amount of
impaired assets.

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Northern Ireland
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8. (U) The USG wants to continue to support economic growth
in the North and North-South Cooperation. We have
consistently taken the position that the devolution of
policing and justice is an important and integral part of the
Good Friday Agreement and St. Andrews Agreement. Our
discussions with Irish Government officials indicate that the
Irish believe devolution must be accomplished according to a
timeframe mutually agreed by Sinn Fein and the DUP. The
Irish and the U.S. both agree that there can be no backing
away from this responsibility and obligation. The USG
supported a major investment conference in Belfast in May

2008. During President Bush's June 16 visit to Belfast
(where he met Cowen),the President stressed that devolution
of policing and justice must occur.

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Rendition Allegations
--------------


9. (SBU) Since the issue of alleged renditions broke in
2004, the Irish have publicly stated that they have accepted
assurances that no rendition prisoners have transited
Ireland. Top Irish officials, including the Prime Minister,
have declared that they would take the USG at its word and
not pursue inspections of U.S. aircraft suspected of
transiting Ireland with rendition prisoners without
sufficient probable cause. As recently as December 2007,
then Prime Minister Bertie Ahern and then Foreign Minister
Dermot Ahern categorically rejected Opposition and Irish
Human Rights Commission calls for random inspections of U.S.
aircraft. Current Prime Minister Brian Cowen, then Minister
of Finance, supported this position.


10. (SBU) On October 29, the Government of Ireland
established a Cabinet-level committee to review Ireland's
human rights policies - giving it a mandate to approach the
transition team of the incoming Obama Administration to
review Irish concerns about renditions, the detention
facility at Guantanamo Bay, and intensive interrogation
techniques which are considered torture (such as
waterboarding). The Committee will also review appropriate
authorities to ensure that the national police force (Garda)
and airport authorities have sufficient powers to search and
inspect all aircraft transiting Ireland which are suspected
of being involved in renditions, perhaps through
strengthening the Air Navigation and Transport Acts. The
creation of this committee was, in part, at the behest of the
Green Party coalition partner in government. While formation
of the committee is likely to provide greater government
oversight of human rights concerns, we do not expect it to
result in aircraft inspections or otherwise adversely affect
U.S.-Irish relations.

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Guantanamo Bay Detainees
--------------


11. (SBU) The United States continues its effort to resettle
the 17 Uighurs, 4 Uzbeks and other detainees that cannot be
returned to their home countries due to inhumane treatment
concerns. The State Department is working with a number of
European countries in an effort to put together a group of
countries to step forward and resettle detainees as a

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humanitarian gesture. We have been told in previous
approaches that Ireland is unwilling to consider accepting
detainees. It would be extremely helpful if Ireland would
consider joining the European group in discussing the
possible resettlement of these detainees.

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Changes in U.S. Tax Code
--------------


12. (SBU) The Irish government is concerned about previous
proposals from President-elect Obama that would reduce or
eliminate the tax advantage U.S. multinationals receive for
investing in low-tax jurisdictions overseas. With a
corporate tax rate of 12.5 percent a major contributing
factor, Ireland has attracted a stock of $87 billion in U.S.
foreign direct investment. These U.S. companies generate a
significant portion of the Irish economy's GDP, employment,
and exports. Both the Irish Finance and Foreign Affairs
Ministers have commented publicly that the government will
lobby against and such change to the U.S. tax code, which
they see as a direct threat to Irish economic well-being.

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U.S.-Irish Strategic Relationship
--------------


13. (U) Cowen announced on July 17 in New York that Ireland
would conduct a strategic review of relations between the
U.S. and Ireland, to be led by Irish Ambassador to the U.S.
Michael Collins. Irish officials have clarified that the
purpose of the strategic review is to look beyond the U.S.
cooperation on the Northern Ireland peace process, identify
Ireland's key interests in the U.S., and determine if the
Irish government's resources are being best deployed in
support of those interests. It is not yet clear what
direction the Irish see the relationship taking in future
years.

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Aviation Pre-Clearance at Shannon and Dublin Airports
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14. (U) DHS Secretary Chertoff and Irish Transport Minister
Noel Dempsey are expected to sign the completed U.S.-Irish
Pre-clearance Agreement in Washington on November 17. The
agreement will allow for U.S. customs clearance at Shannon
and Dublin airports in addition to the already existing
immigration clearance. If all goes as planned, full
pre-clearance (immigration and customs) will begin in Shannon
in 2009 and in Dublin in 2010.

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Environment/Energy Initiative
--------------


15. (U) Embassy Dublin has a very active relationship with
the Irish government on environment and energy issues. We
worked with various Irish agencies to put together an ocean
energy workshop in Galway in July, which was attended by
several U.S.-based companies. We are also putting together a
series of visits by U.S. government and private sector
experts, the first of which is a visit by a DOE official to
discuss the USG's public sector energy efficiency program.
We believe that we can effectively partner with the Irish on
the nexus of environmental/energy issues (including climate
change),which would be useful in our broader engagement with
Europe going forward. Ireland is very active in this area
given that they are well above their Kyoto Protocol
commitments and they are worried about their energy security.
They have limited indigenous fossil fuel sources of energy.

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Global and Regional Efforts
--------------


16. (SBU) The U.S. and Ireland have worked closely and
effectively on issues of shared concern, especially through
Ireland's participation in multilateral organizations such as
the UN and the EU. Ireland recently resettled ten Cuban
refugees sheltering at Guantanamo. Ireland's military
neutrality, however, remains an important cornerstone of its
foreign policy, and will need to be considered when proposing
bilateral initiatives.

EU Relations. Ireland and the U.S. share a common commitment
to democracy, human rights, and the rule of law.

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Consequently, the Irish are generally supportive of USG
foreign policy and global issues positions, particularly at
the UN and EU. Nonetheless, the Irish also value extensive
dialogue and consensus, and will, on occasion, adopt
positions at odds with those of the U.S. in order to preserve
consensus, particularly within the EU.

Iraq/Access to Shannon Airport. The USG appreciates
Ireland's steadfast support in permitting U.S. military
transits at Shannon and Dublin Airports (over one million
troops since 2003; 262,000 in 2007),which backstop U.S.
actions in the Gulf region, despite the unpopularity of this
policy domestically. Ireland has also made a commitment of
over three million euros to the EU's reconstruction efforts
in Iraq.

Immigration. The Irish Government continues to consult and
lobby with Congress and Irish-American groups on behalf of
Irish residing illegally in the U.S., variously estimated at
between 5,000 and 50,000. A special unit of the Department
of Foreign Affairs, set up in 2006 to assist the Irish
Diaspora, assists Irish Ambassador to the U.S. Michael
Collins in this endeavor. While the Irish Government
understands that Irish illegal aliens will not be dealt with
separately from comprehensive U.S. immigration reform, the
Irish take this emotive domestic issue to heart. Irish
officials regularly express deep concern for these illegal
aliens and frequently ask the USG to regularize their status
as soon as possible.

Special Visas. Ireland and the U.S. have successfully
negotiated a special visa category (a modified J-1 visa)
which will enable Irish citizens to live and work in U.S. for
up to one year (a duration longer than currently available
under existing visa regulations); and vice versa. The Irish
are impatient to have this new visa program actually commence.

Climate Change. Although the Irish public and media
criticize the United States for remaining outside the Kyoto
Protocol, Ireland's rapid economic growth has made it
difficult for the country to meet its own Kyoto commitments.
Under the Protocol, Ireland pledged to reduce emissions to 13
percent above the 1990 levels by 2012, but emissions now
stand at 25 percent above the 1990 threshold. Ireland has
also signed on to even more stringent EU requirements of
reducing emissions by (up to) 30 percent by 2020. In this
context, the Government has welcomed Embassy proposals for a
cooperative approach to climate change and we are working on
bilateral initiatives focused on ocean/wave energy, methane
capture, and clean coal technologies. As part of this
cooperation, the Embassy and the Irish government co-hosted
an ocean energy workshop in July 2008, which included U.S.
and Irish companies working in the sector.

The Middle East. Ireland supports the international
community in calling for Hamas to renounce violence and to
recognize Israel's right to exist. It also supports the
two-state solution. The Irish are dismayed at violence in
the Middle East and are supportive of the use of USG
influence to make headway in the Middle East Peace Process.

Iran. While Ireland has generally supported international
dialogue with Iran rather than sanctions, it recognizes that
unchecked Iranian development of nuclear capability and its
flouting of UNSC Resolutions represent a threat to the
international community. Ireland supported UNSCRs 1803 and
1835 on Iran.

Irish Peacekeeping/Darfur/Chad. The Irish Defense Forces
have nearly 800 troops serving in multilateral peacekeeping
missions in Kosovo, Chad, Bosnia, Afghanistan, and elsewhere.
Ireland is contributing 455 troops to the ESDP EUFOR mission
to Chad, which is led by an Irish General, and sees this
peacekeeping effort as contributing to the situation in
adjacent Darfur. The Irish Government prefers not to expand
its military engagement in Afghanistan, though it will
consider additional development and humanitarian assistance
there.

Conflict Resolution. In 2007, then Foreign Minister Dermot
Ahern (now the Justice Minister) announced the opening of a
new Conflict Resolution Unit (CRU) in the Department of
Foreign Affairs. The Irish hope to use lessons learned in
Northern Ireland to help other conflict areas of the world.
The CRU's first initiative will be in East Timor.

Development Assistance. Ireland aims to contribute 0.7

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percent of GDP to overseas development assistance by 2012.
Africa is a particular focus.

Cluster Munitions. Ireland is a founding member of the Oslo
Process, which seeks to ban cluster munitions, in part
because of the personal interest of former Foreign Minister
Dermot Ahern (now Minister for Justice),who witnessed the
impact of unexploded ordinance on civilians in Lebanon
following the Israeli incursion in July 2006. During the May
19-30 Dublin Cluster Munitions Conference, the Irish played a
key role in achieving consensus on a Cluster Munitions
Convention that took into the account the concerns that
critical ongoing and future peacekeeping collaboration and
existing alliances not be disrupted, and that the convention
be compatible with the Convention on Conventional Weapons.
FOLEY