SCENESETTER FOR SECRETARY CHERTOFF'S VISIT TO

C O N F I D E N T I A L SECTION 01 OF 04 PRAGUE 000674

SIPDIS

STATE FOR EUR/CE

E.O. 12958: DECL: 10/22/2018
TAGS: PREL PGOV EZ
SUBJECT: SCENESETTER FOR SECRETARY CHERTOFF'S VISIT TO
PRAGUE

Classified By: A/DCM JOHN LAW FOR REASONS 1.4 (B) AND (D).


1. (C) SUMMARY: Secretary Chertoff, Embassy Prague looks
forward to welcoming you to the Czech Republic. Your visit
will underscore the importance of our strong transatlantic
partnership, which has received a significant boost from the
President's announcement of the Czech Republic's entry into
the Visa Waiver Program. The Czech government, under Prime
Minister Topolanek, views Missile Defense as the natural next
step in our increasingly close cooperation. The Czechs'
growing engagement internationally - from Kosovo to
Afghanistan - also demonstrates their commitment to our two
countries' shared security priorities. In addition, your
visit will help set the stage for an even closer U.S.-Czech
collaboration during the upcoming Czech EU Presidency on our
transatlantic priorities. END SUMMARY.

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Domestic Context
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2. (C) Nineteen years after the 1989 Velvet Revolution, the
Czech Republic today is a prosperous market economy, a stable
democracy, and a committed American ally. Accession to the
European Union in 2004, like accession to NATO in 1999, has
solidified and accelerated the transition away from the
country's communist past. The economy today remains
relatively strong, with significant investment flows, modern
manufacturing base, conservative banks, low unemployment and
moderate but declining inflation. The country has so far
escaped the worst of the global financial crisis. The Prague
stock exchange has suffered heavy losses, but relatively few
Czechs are invested in the market and few Czech companies use
it as a source of capital. The crisis has also contributed
to a slow down of Czech economic growth, largely by
depressing demand within Western Europe for Czech exports.
Analysts are now forecasting that Czech real GDP will
increase about four percent in 2008 and between two-and-half
and three percent in 2009, after three years of over six
percent growth.


3. (C) PM Topolanek, who will meet with President Bush on
October 29 in Washington, suffered a sweeping defeat in the
country's regional and senate elections. Although his
government survived a no-confidence vote on October 22, the
poor electoral results have seriously undermined his chances
at reelection as chairman of the ruling Civic Democratic
Party (ODS) during the upcoming ODS party congress in
December. If he loses the December contest, Topolanek is
unlikely to survive as prime minister. At the same time that
Topolanek is struggling to shore up his position within his
party, he has to keep on track his government's key
priorities, among them Missile Defense and preparations for
the Czech EU Presidency, which the Czechs assume in January

2009.

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U.S.-Czech Relations
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4. (C) Our two countries enjoy excellent relations. The
Czechs are active in the war on terror, with troops in Iraq,
Afghanistan, and the Balkans. The country is active within
NATO and the EU, and generally supportive of U.S. policy
goals. This is particularly the case regarding democracy
promotion. The Czechs are our strongest partners in Europe
on Cuba, and active supporters of the democratic opposition
in Cuba. Likewise in Georgia, Belarus, Burma, Iraq and other
countries in transition, the Czech government and NGOs work
to support peaceful transformation and pass along the lessons
learned from the Czechs' own history. Prague has been home
to the U.S.-funded Radio Free Europe/Radio Liberty since
1995, and has actively supported broadcasts to countries in
Eastern Europe, Central Asia and the Middle East, including
Iran.

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Visa Waiver
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5. (C) PM Topolanek and his government fully appreciate the
President's personal commitment to the Visa Waiver Program's
expansion. The President's October 17 announcement of the
Czech Republic's entry into the Visa Waiver Program was
widely covered in the Czech Republic. Your visit to Prague
will amplify the President's message of friendship and
partnership. The choice of November 17, if confirmed as the
entry date into the Program, would add further symbolism to
this moment because most Czechs are naturally proud of their

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achievements during and since the Velvet Revolution on
November 17, 1989. During your visit to Prague, PM Topolanek
and his government will seek to play up this much-anticipated
milestone, which eliminates the one major irritant in our
otherwise positive bilateral relationship. While not
formally linked, the Czech public has always connected the
Visa Waiver Program and Missile Defense, given that these
initiatives have advanced roughly in the same time frame.

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Missile Defense
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6. (C) The United States has proposed to build a missile
defense (MD) radar 90 kilometers south of Prague in Brdy.
Coupled with the planned deployment of interceptors in
Poland, the radar facility will provide Europe and the United
States with a defense against ballistic missiles from Iran or
other rouge nations. For PM Topolanek and his government,
Missile Defense is about more than preventing a ballistic
missile attack on Europe. He believes that, in addition to
his country's membership in the EU and NATO, the Czech
Republic must forge a robust trans-Atlantic relationship,
including by partnering with the United States and Poland on
the European MD site. PM Topolanek, who fully appreciates
the importance of U.S. engagement in Europe, views MD as the
natural next step in the U.S.-Czech relationship. In the
wake of the Russia-Georgia conflict, PM Topolanek also views
MD as critical in the context of Russia's assertive policies
toward Central Europe and former Soviet republics. However,
with up to 65 percent of Czech public opposing MD and his own
coalition divided on the issue, Topolanek has taken a great
political risk with his committed pro-MD stance. When
possible, please note that by hosting the MD radar site, the
Czech Republic takes a leading role in its defense as well as
that of its European allies and the United States.


7. (C) In the course of 2007 and 2008, the United States
negotiated with the Czechs two MD agreements, the Ballistic
Missile Defense Agreement (BMDA) and the Status of Forces
Agreement (SOFA). The Czech parliament must now ratify these
agreements, as well as a constitutionally-required resolution
permitting the stationing of U.S. troops on Czech soil. The
government is expecting a tough fight in the narrowly divided
parliament in the coming weeks. PM Topolanek's current
tenuous political position, as well as his less than stable
coalition with the smaller Christian Democrats and the Czech
Greens, raises new questions about his ability to push
through the ratification.


8. (C) We have never tied visa waiver to MD. However, some
in the Czech government and a portion of the public clearly
see the Czech Republic's entry into the VWP, as almost a quid
pro quo for hosting the radar. We expect that the press will
ask you about the relationship between VWP and MD. We do not
want to tie the two, but the timing of your visit and the
announcement of the Czech Republic's participation may help
increase the chances that the parliament will ratify the MD
agreements. By noting that the Czech Republic will join the
Visa Waiver Program along with six other well-qualified
nations, you will simultaneously underscore that the Czech
people earned this privilege by respecting the terms of their
visas and show that Czech participation in the Program was in
no way contingent upon a positive Missile Defense outcome.

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Czech EU Presidency, Russia/Energy, and Justice Issues
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9. (C) The Czechs are increasingly focused on their upcoming
EU Presidency during the first half of 2009. The Czech
agenda has an overarching theme "Europe Without Borders" and
focuses on three priority areas: EU Competitiveness, Energy
Security and Sustainability, and External Relations. Within
External Relations, the Czechs plan to focus on the Western
Balkans, transatlantic relations, and the EU's Eastern
Neighborhood Policy. We share the same broad goals with the
Czechs; the challenge will be finding a way to help the
Czechs forge an EU consensus close to our shared goals. To
reaffirm the United States and the EU's strong relations, the
Czechs have begun to press for an early visit to Prague by
the next U.S. President during their six months at the EU's
helm.


10. (C) A key challenge for the Czech Presidency will
undoubtedly be the EU's policy toward Russia. Overall, the
Czechs are and will continue to be a valuable ally on Russia
within the EU. However, they are keenly aware that as the
incoming EU President, they must temper their government's

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views on Russia to achieve an EU consensus. Energy security
is a related issues, since the Czechs are especially
concerned about the reliability of Russian supplies and
Russian efforts to buy up Central European energy
infrastructure and assets. The Czech Republic is dependent
on Russia for 70 percent of its gas, 65 percent of its oil,
and 100 percent of its nuclear fuel. The level of Russian
crude oil deliveries to the Czech Republic has declined --
ostensibly for technical reasons -- since the United States
and Czech Republic signed the Ballistic Missile Defense
Agreement in early July. Czech energy security goals include
progress on a more united and coherent EU energy strategy,
support for Nabucco and greater outreach to Caspian energy
producers. To this end, the Czechs are planning an
EU-Trans-Caspian Summit, tentatively scheduled for May 2009.
The Czechs have suggested that we can play a useful role by
timely support of Czech energy security-related initiatives
during their presidency.


11. (C) Justice and security-related cooperation falls under
the broad range of Czech EU Presidency priorities covered
within External Relations. Together with the EU we have an
informal High Level Contact Group (HLCG) which focuses on
privacy and personal data protection in the context of the
exchange of information for law enforcement purposes,
particularly related to fighting and preventing terrorism and
serious transnational crime. As a result of HLCG's work, we
now have international agreements between the United States
and EU governing Extradition and Mutual Legal Assistance
(2003),Passenger Name Record data (2007),as well as
agreements with Europol (2002) and Eurojust (2006) governing
personal data exchange. The Czechs have ratified the
Extradition and Mutual Legal Assistance Agreement, but they
will have a role to play in encouraging the final four EU
member states (Belgium, Greece, Ireland, and Italy) to ratify
this document, if this is not completed before the upcoming
U.S.-EU Justice and Home Affairs Ministerial on December 12
in Washington.

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Reliable Allies in Missions Abroad
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12. (SBU) The Czechs remain actively engaged supporting U.S.
and NATO-led coalitions. Czech soldiers are currently
deployed in Iraq (approximately 20 trainers in Baghdad and at
the Iraqi Armor Training Center in Taji) and Afghanistan,
where the number of troops is currently just under 500. In
March 2008, the Czechs established the first provincial
reconstruction team (PRT) in Logar province south-east of
Kabul. Along with the sizable Czech commitments in
Afghanistan, they have an infantry battalion of around 450
troops permanently deployed in Kosovo.


13. (C) The Czech government developed plans to increase the
total number of Czech troops deployed abroad from
approximately 900 this year to just over 1380 in 2009, with
an increase in Afghanistan from 495 in 2008 to 745 troops in

2009. The parliament must now approve the deployments
legislation. The proposed increase of Czech troops in
Afghanistan, coupled with the MOD's failure to reach out to
the opposition, has already generated questions from across
the political spectrum and raised doubts about the deployment
bill's prospects. Therefore, if it is appropriate, we would
encourage you to thank the Czechs for their contributions and
underline how the exemplary service of their soldiers and
reconstruction experts in an increasingly fragile security
environment is helping the Afghan people build a stable and
more prosperous country, a goal of the entire international
community.

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A Strong and Valued Partnership
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14. (C) Despite its small size and at times unsettled
political scene, the Czech Republic has consistently proven
to be a reliable and active ally of the United States. The
Czechs are appreciative of the positive role the United
States has played at key moments of their history. During
your meetings, Czech officials will likely highlight the
country's 90th anniversary and point to President Woodrow
Wilson's support and efforts, which helped bring the
Czechoslovak Republic into being on October 28, 1918. The
Czechs, in turn, are proud of their contributions to
security, democracy, and freedom around the globe since 1989.
For PM Topolanek, the entry into the Visa Waiver Program and
the planned MD radar in the Czech Republic are a testament to
his country's progress and to the strong ties between our

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countries. The key themes for your meetings and public
statements should be: highlighting the country's Visa Waiver
Program entry; recognizing Czech contributions and
partnership in promoting global democracy, freedom and
security; expressing appreciation for Czech willingness to
enhance common defense through participation in foreign
missions and support for the MD shield; and setting the stage
for close U.S.-EU cooperation under the Czech EU Presidency.
Graber