CYPRUS: DEFENSE MINISTRY COMPLAINS U.S. BLOCKING

C O N F I D E N T I A L NICOSIA 000917 SIPDIS DEPARTMENT FOR EUR/SE, EUR/RPM, PM E.O. 12958: DECL: 11/18/2018 TAGS: MARR MOPS PREL CY TU RU SUBJECT: CYPRUS: DEFENSE MINISTRY COMPLAINS U.S. BLOCKING ARMS UPGRADES REF: IIR 6823 0028 09 Classified By: Ambassador Frank C. Urbancic, Reasons 1.4 (b),(d) ¶1. (C) The Ambassador on November 14 paid a courtesy call on Minister of Defense Costas Papacostas and MoD Permanent Secretary (Deputy Secretary-equivalent) Petros Kareklas. After initial pleasantries, Papacostas commented on the good bilateral relationship between the US and the Government of Cyprus and then allowed Kareklas to raise a complaint about the United States. He said that Cyprus was able to purchase military equipment from nearly any country in the world but the United States. It was an insult that the U.S. would not sell equipment or components to Cyprus, while it supplied whatever arms were requested by Turkey. Kareklas went on to say that Cyprus was unable to acquire upgraded avionics for their French Gazelle helicopters because the fuel gauge was manufactured in the U.S., their proposed purchase of Swiss PC-9 aircraft was blocked by the U.S. since the ejection seat was a U.S. component, and that the U.S. should reconsider this unfair policy. ¶2. (C) The Permanent Secretary then said that a few days previously, local newspapers had announced a Ministry of Defense decision for a large defense purchase in 2009. Their information was taken totally out of context, he clarified, and the 2009 budget would not support such a purchase anyway. When the Ambassador asked Kareklas whether these acquisitions from Russia were compatible with the North Atlantic Treaty Organization equipment, he responded with a long-winded sermon on how Russia is a European country, Cyprus has a procurement system that is transparent and does not involve kickbacks, and that the procurement process is honest and above reproach. ¶3. (C) COMMENT: While Papacostas was friendly and amicable, Permanent Secretary Kareklas seemed agitated and confrontational. It was clear as well that both of these senior RoC defense officials admire Russian equipment and see Russia as a viable source for EU arms purchases. The RoC delegation led by RoC President Demetris Christofias is in Moscow this week (Septel). Urbancic