TFGG01: MEDVEDEV CONFIDANT FLOATS WAY FORWARD ON

C O N F I D E N T I A L MOSCOW 002365 SIPDIS STATE FOR EUR/RUS; NSC FOR MWARLICK E.O. 12958: DECL: 08/12/2018 TAGS: PREL ECON PGOV RS SUBJECT: TFGG01: MEDVEDEV CONFIDANT FLOATS WAY FORWARD ON GEORGIA Classified By: CDA Eric S. Rubin for Reasons 1.5 (b) and (d). -------------- Summary -------------- ¶1. (C) In an August 12 meeting with ECMIN, Igor Yurgens, head of the Institute for Contemporary Development, President Medvedev's think-tank for economic and social issues, said Georgia needed to be punished for attacking South Ossetia and that Georgian President Saakashvili should go, but Russia had to avoid a broader confrontation with the U.S. and the West. To that end, he suggested that Russian "liberals" viewed the way forward as a cease-fire, a pull back of Russian troops to Abkhazia and South Ossetia, and EU mediation, possibly including EU troops replacing Russian/CIS forces as peacekeepers. End Summary. -------------- Consequences for Russia -------------- ¶2. (C) Yurgens said he was in the small camp of Russians, mostly "liberals," who felt that Georgia needed to be taught a lesson. The vast majority of Russians, 90 percent, wanted the GOR to go even farther and "destroy" Georgia. Yurgens said this would ultimately be disastrous for Russia. The conflict in Georgia, coming on the heels of TNK-BP and Mechel, had been bad for the Russian economy. However, the economy would recover, provided the conflict did not lead to something worse, such as a return to the confrontation with the U.S. and the West that had characterized the Cold War. ¶3. (C) Yurgens said that with the exception of extreme nationalists, elite opinion was aware of the damage the conflict could do to Russia if it led to confrontation with the U.S. Yurgens said a new Cold War would be detrimental to both sides but more so for Russia. The American economy was much larger and world and European opinion, wrongly, saw Russia as the aggressor. In that regard, Yurgens expressed concern at the increasing rhetoric from both American and Russian leaders, citing specifically Putin's comments about the U.S. airlifting Georgian soldiers from Iraq back to Georgia. ¶4. (C) Yurgens said the psychological threat to Russia posed by the conflict was even greater than the economic threat. The fault lines within Russia's elite were largely over the role of the state in the economy and in society writ large. He acknowledged that so far, the crisis had raised Putin,s profile at the expense of Medvedev. It had also raised the profile of the "siloviki" at the expense of the liberals. He said, for instance, that Finance Minister Kudrin had told him privately that the budget requests from the military and other "power" ministries were enormous and if approved would delay indefinitely plans to modernize Russian infrastructure, a major blow to liberal hopes to cement Russia's economic gains. -------------- A Way Forward -------------- ¶5. (C) Yurgens said the key would be to find a way forward that did not undermine Medvedev. In particular, Yurgens argued that something had to done about Saakashvili. He was too unstable, but beyond that it would be impossible for Medvedev to interact with Saakashvili in the future following the Georgian attack on South Ossetia. ECMIN noted Saakashvili's democratic legitimacy and Yurgens acknowledged that a Russian focus on Saakashvili would reinforce his popularity among Georgians. ¶6. (C) Noting Sarkozy's impending visit, Yurgens suggested that the U.S. consider positively the following approach: a cease-fire; a return by Russian forces to positions inside South Ossetia and Abkhazia; and an invitation for the EU to mediate the conflicts, including a signal the EU peacekeepers would be acceptable in place of Russian peacekeepers, who would now clearly be unacceptable to Georgia. Yurgens said there would be strong opposition to such an approach within the GOR and especially from the separatists in Abkhazia and South Ossetia. However, he planned to forward the idea to Medvedev in concert with other liberals. -------------- Perfidious Georgians -------------- ¶7. (C) Yurgens added that he hosted three weeks ago at the Institute a roundtable to discuss Georgia's relations with South Ossetia. From the Georgian side had been Georgian Reintegration Minister Temur Yakobashvili, Georgian Ambassador to Russia Erosi and former Ambassador to Russia Irakli Abashidze. On the Russian side had been Deputy Prime Minister Ivanov and Federation Council Foreign Affairs Committee Chairman Margelov. ¶8. (C) Yurgens said the discussion had been cordial and positive. The Georgians had indicated readiness to sign a non-use of force agreement provided the Russians pushed the Ossets to negotiate and withdrew the 800 railway troops. The GOR subsequently began withdrawing the troops and indicated it was prepared to push for negotiations. However, given what had then happened in South Ossetia, Yurgens now believed the meeting had been a smoke-screen and that the Georgian Government had been intending to try to settle the dispute by force all along. He said he felt personally betrayed. -------------- Comment -------------- ¶9. (C) Yurgens lacks formal authority, but he does have influence and access with Medvedev. It would appear from this conversation that those in Medvedev's circle might have an interest in ending the conflict sooner rather than later and in a way that preserves some of Medvedev's authority. That said, it is not at all clear that the GOR is prepared to embrace international negotiating formats of this sort, regardless of the views of Medvedev's advisors. RUBIN