EUR DAS BRYZA,S MEETING WITH ARMENIAN PRESIDENT

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000778

SIPDIS

E.O. 12958: DECL: 09/28/2018
TAGS: PREL
SUBJECT: EUR DAS BRYZA,S MEETING WITH ARMENIAN PRESIDENT
SARGSYAN AND FOREIGN MINISTER NALBANDIAN

REF: YEREVAN 733 (NOTAL)

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Classified By: Classified by DCM Joseph Pennington for Reasons 1.4 (B)
and (D)


1. (C) Summary: EUR DAS Matthew Bryza met with Armenian
President Sargsian and Foreign Minister Nalbandian on
September 13 to discuss Armenia-Turkey rapprochement,
Nagorno-Karabakh (NK),and the Russia-Georgia war. On
Armenia-Turkey relations, Sargsian viewed the visit of
Turkish President Gul to Yerevan on September 6 as an
important step forward and opined that negotiations on
normalizing relations were proceeding in the right direction,
with an agreement already penned on sales of electricity from
Armenia to Turkey. On the NK conflict, Sargsian and
Nalbandian felt now was the time to reach a deal on the Basic
Principles, and welcomed U.S. leadership in pushing through
an agreement. On the conflict in Georgia, both Sargsian and
Nalbandian railed against Saakashvili for making the mistake
of taking on Russian forces and for failing to communicate
with Armenia during the crisis. They denied Russian aircraft
had attacked Georgia from the Russian base in Gyumri,
Armenia. Reftel reported Bryza's discusion about Iran. End
Summary.

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Turkey-Armenia Rapprochement
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2. (C) President Sargsian began the dinner conversation with
EUR DAS Bryza by saying that his historic meeting with
Turkish President Gul on September 6 in Yerevan to watch the
Turkish-Armenia soccer match had turned out well. Sargsian
said Gul had shown real political courage, and had seized the
moment to push for a breakthrough in relations. He thanked
Bryza for U.S. support for the initiative. Sargsian noted
that Armenia had passed a new version of its proposal to
Turkey during the latest round of meetings in Bern, and
Turkish FM Babacan had endorsed the general direction in
which the talks were headed. Sargsian also noted that he had
received a letter from Gul endorsing the negotiations.
Improved relations were already yielding tangible benefits,
with Armenia having recently signed an agreement to sell 1.5
billion kilowatts of electricity per year to Turkey, for
roughly $800 million USD. (Note: Since this conversation,
the electricity deal seems to have encountered political
snags in Ankara. DFM Kirakossian told CDA here that the
Turkish company which signed the deal had later appealed to
the GOAM for help in persuading the GOT to let the plan go
forward. Septel. End Note) Sargsian reported that Armenia had
already renovated the railroad line on its side of the
border, and Turkey could finish the necessary renovations on
its side &within two months8 if an agreement on opening the
border were reached. Sargsian said he was willing to make
internal changes in the government, if necessary, to keep the
Turkey-Armenia rapprochement proceeding smoothly.

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Nagorno-Karabakh
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3. (C) On Nagorno-Karabakh (NK),Bryza began by noting that
Secretary Rice had sent him to the region to demonstrate U.S.
commitment to resolving the conflict and noted high-level
U.S. involvement in seeking to resolve the last remaining
differences on the Basic Principles. Sargsian agreed the
moment was right for an agreement on the Basic Principles,
which he thought represented the best approach for finding a
compromise between the sides. Turkish President Gul had
offered to help by complementing the efforts of the Minsk
Group Co-Chairs through Black Sea economic initiatives and
the establishment of regional links. Bryza agreed that
Turkey-Armenia rapprochement could have a positive impact on
the NK negotiations if it led Yerevan to show greater
flexibility, and noted that Turkey was in fact a member of
the Minsk Group, even if it was not a Co-Chair. Sargsian
noted Turkey,s interests were not congruent with
Azerbaijan,s and thought Turkey could even play the role of
a neutral mediator. Nevertheless, the Minsk Group Co-Chairs
should still play the central role of mediating a solution,
while Turkey,s role should be supportive.


4. (C) On the subject of the Lachin corridor linking Armenia
to NK, Bryza explained that his trip to NK a day earlier had
vividly demonstrated how the corridor was a lifeline for the
population of NK. Bryza asked Sargsian if he could speak
openly with Azerbaijani President Aliyev about a constructive
solution to the corridor. Sargsian replied that he hoped he
could, but that during their introductory meeting in St.
Petersburg in June, Aliyev had mostly talked about how
Azerbaijan was a rising power that the U.S. and Russia would

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have to contend with. Sargsian said he would broach the
topic of the corridor when the time was right, and asked
Bryza not to go into details during his upcoming trip to Baku
(September 17-18). Bryza asked whether, if Aliyev were to
sign a legally-binding Non-Use of Force agreement, Armenia
might soften its insistence that the future status of the
corridor be the same as the future status of NK, and instead
accept a formulation specifying that Armenia would retain
&control8 over the corridor. Sargsian replied that he was
not exactly sure what the word &control8 entailed, and
Nalbandian added that meaningful security guarantees for NK
would have to come from Armenia, not Azerbaijan. Both
Sargsian and Nalbandian agreed that guarantees for the
security of NK were critical, but claimed that Aliyev first
needed to build trust with Armenia before such issues could
be resolved.


5. (C) On the subject of U.S. leadership in seeking an
agreement, Bryza asked if Armenia could agree to U.S.-hosted
meetings with the two Foreign Ministers or the Presidents.
Sargsian replied that he had no problem meeting outside the
Minsk Group format. Sargsian enthusiastically endorsed the
idea of a possible meeting between FM Nalbandian and FM
Mammadyarov hosted by Secretary Rice in New York at the UN
General Assembly.

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Bitterness over Georgian Behavior during the
Russia-Georgia War
--------------


6. (C) On the conflict in Georgia, Bryza noted the situation
in the South Caucasus had changed dramatically with Russia,s
willingness to behave as a belligerent now clear. Simmering
conflicts could erupt quickly into wars and impact the entire
region. Sargsian agreed with Bryza,s general assessment of
Russia,s motives, but argued that in the recent conflict
Saakashvili had made a foolish decision and left Russia no
choice but to attack Georgia. If Georgia had retaken
Tskhinvali without encountering Russian resistance, Russia,s
reputation as a military power would have been devastated.
Bryza countered that the South Ossetian militia reported
through a chain of command led by Russian officers, who
played a role in the events leading up to August 7.
Sargsian shrugged and noted that it was obvious what
Russia,s role had been, but it was nevertheless &idiotic8
of Saakashvili to have fallen into the trap with Russia
standing so ostentatiously behind its South Ossetian clients.
Sargsian said he had warned Saakashvili numerous times not
to succumb to any provocations. Sargsian also complained to
Bryza that Saakashvili had waited three days to return his
phone call at the start of the conflict, while Georgian FM
Tkeshelashvili had refused a 4 am meeting with FM Nalbandian
at the Yerevan airport during a stopover en route to Tbilisi
(Nalbandian had offered to drive out in the middle of the
night to meet her). Sargsian also complained about the
Georgian failure to facilitate the loading of gas trucks in
the port of Batumi that were bound for Armenia.

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Domestic Issues
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7. (C) On the domestic front, Sargsian boasted that
Armenia,s inflation had fallen to just 3.7 percent, while
GDP was growing at 10 percent for the first part of the year.
Separately, Sargsian complained that a confidante of former
President Levon Ter-Petrossian (LTP) had been offered a seat
on the board of directors of Voice of America (Note: Sargsian
may have confused VOA with RFE/RL),which he said was a slap
in the face at him. Bryza pushed back and asked how he could
possibly oppose a decision by an independent media outlet to
appoint their preferred candidate to their board. Sargsian
replied that it was &unnecessary politicization8 of the
media.
YOVANOVITCH