Identifier
Created
Classification
Origin
08RIGA401
2008-07-08 07:06:00
CONFIDENTIAL
Embassy Riga
Cable title:  

NOT LOOKING GOOD FOR SAC IN LATVIA

Tags:  MARR MOPS PREL PGOV NATO LG 
pdf how-to read a cable
VZCZCXYZ0000
OO RUEHWEB

DE RUEHRA #0401 1900706
ZNY CCCCC ZZH
O 080706Z JUL 08
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5078
RUEKJCS/SECDEF WASHDC IMMEDIATE
INFO RUEHXP/ALL NATO POST COLLECTIVE IMMEDIATE
C O N F I D E N T I A L RIGA 000401 

SIPDIS

E.O. 12958: DECL: 07/08/2023
TAGS: MARR MOPS PREL PGOV NATO LG
SUBJECT: NOT LOOKING GOOD FOR SAC IN LATVIA

REF: A) RIGA 391 B) STATE 72295

Classified By: Ambassador Charles W. Larson, Jr. Reason: 1.4 (d)

C O N F I D E N T I A L RIGA 000401

SIPDIS

E.O. 12958: DECL: 07/08/2023
TAGS: MARR MOPS PREL PGOV NATO LG
SUBJECT: NOT LOOKING GOOD FOR SAC IN LATVIA

REF: A) RIGA 391 B) STATE 72295

Classified By: Ambassador Charles W. Larson, Jr. Reason: 1.4 (d)


1. (C) Summary: Despite our direct intervention with the
Prime Minister and the office of the President and the
Foreign Ministry, we see it as highly likely that Latvia will
decide not to proceed with participation in NATO Strategic
Airlift Capability (SAC) Consortium. Direct appeals to the
highest levels of government show an understanding of the
importance of the issue to the Alliance but a genuine focus
on the need to cut costs in the budget. There may be a
chance to get the Latvians back on board if payment for their
share can be delayed until 2009, but we cannot guarantee
that. End summary.


2. (C) Following receipt of ref B instructions on July 7, we
began reaching out to key players in the GOL to urge
continued support for the SAC consortium in the ongoing
discussions of revisions to the 2008 budget. This has been a
regular point in our discussions with the Latvians since
February when the MOU was released and the Latvians expressed
sticker shock at the increased price tag. The MOD continues
to tell us that they are unwilling to predict the outcome of
the cabinet debate on this issue.


3. (C) Late in the evening of the 7th, the Ambassador spoke
to PM Godmanis. As he had in the PM's congratulatory call on
July 4, the Ambassador stressed to him the importance of
Latvian retaining its commitment to the alliance on this
issue and following through with signature of the MOU. The
PM was clearly better briefed than he had been in the
previous conversation and said that he supported the project
generally but that the cost for 2008 (initial costs) were
prohibitively high given the deteriorating economic situation
and need to cut all areas in the budget. he asked if there
was a way to delay payment until 2009, although he did not
promise that such a delay would resolve the problem. The
Ambassador pledged to look into it. Following on information
provided by OSD to ODC, the Ambassador reported to the PM's
office the morning of July 8 that payment would be needed
this year.


4. (C) DCM spoke with MFA State Secretary Penke who affirmed
that the MFA strongly supported the project but that Finance
Minister (and former Defense Minister) Slakteris was strongly
opposed to it and his views carry a lot of weight in cabinet
as a former defense minister. Penke also thought that the
cabinet debate would be July 10 not 8th as we originally
heard. He assured us that FM Riekstins (currently out of the
country) would support the project in cabinet.


5. (C) DCM also spoke with Edvards Stiprais, Chief of Staff
to President Zatlers, and Andris Pelss his foreign policy
advisor, to urge the President's intervention given his
discussion of the issue with Secretary gates in Washington in
April. Stiprais pledged to brief the President and ask him
to raise the issue with PM Godmanis.



6. (C) Comment: We think it highly unlikely that the Latvian
government will proceed with the SAC. Budgetary and
political realities make it too appealing a cut, especially
when balanced against growing public pressure for increased
social spending to address the effects of 18% inflation on
pensions and other benefits. Finance Minister Slakteris'
opposition to the program does not help. We believe that PM
Godmanis well understands the political importance of this
project, but he seems to have made the calculation that he
simply cannot afford it this year. If there was a way to
delay Latvian payment into 2009, it might help, but we are
unwilling to assure that it would make the difference. We
will continue our dialogue with GOL officials until the
cabinet makes its decision.
LARSON