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).

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Summary
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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.

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Consequences for Russia
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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.

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A Way Forward
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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.

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Perfidious Georgians
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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.

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Comment
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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