DAS Kaidanow's Sept. 1-2 visit to Athens Features Turkey,

C O N F I D E N T I A L ATHENS 001465

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E.O. 12958: DECL: 2019/09/11
TAGS: PREL PGOV CVIS MARR MOPS
SUBJECT: DAS Kaidanow's Sept. 1-2 visit to Athens Features Turkey,
Turkey, Turkey, VWP, Budget... and MK Name

CLASSIFIED BY: Daniel V. Speckhard, Ambassador; REASON: 1.4(B),(D)


1. (C) SUMMARY: DAS Tina Kaidanow visited Athens September 1-2,
meeting with FM Bakoyannis, PASOK Party president George
Papandreou, Deputy FM Valinakis, Deputy MOD Tasoulas, Interior
Ministry SecGen for Public Order Bitsios, Finance Ministry SecGen
Sideropoulos, and Parliament External Affairs Committee president
Kanellopoulo (at which Bouli President Soufias dropped by). DAS
Kaidanow also had several opportunities to meet with business and
opinion leaders, and a cross section of MFA office directors at a
luncheon hosted by PolDir Pareskevopoulos. Her GoG interlocutors
all conveyed a similar message regarding Turkey, noting that Greek
support for Turkey's EU accession was at risk from perceived
Turkish intransigence over Cyprus and escalations of Aegean
airspace provocations. FM Bakoyannis, in particular, noted that
time is limited on Turkey's EU accession prospects, as the EC will
be issuing a report on Turkey's performance in mid-October, and
under current circumstances, she would be politically pilloried
were she to go to Brussels and say Turkey is demonstrating it is a
serious EU candidate. The FM said she had related her concerns to
Turkish FM Davutoglu in a call the day before but had nothing
positive to report from the conversation. On the Macedonia name
issue, the Greeks maintained they were willing to proceed on the
basis of previously identified positions, but claimed they did not
perceive much flexibility from Skopje, despite DAS Kaidanow's
underscoring the strategic importance for the region as a whole of
resolving the issue.


2. (C) Interior Ministry SecGen Bitsios focused on the still
growing challenges of illegal immigration, noting the problem is
now an EU problem, not just Greek, and asking for U.S. support for
obtaining readmission agreements with source countries primarily in
south central Asia and the Middle East. On domestic terrorism, he
said changing public attitudes are permitting the GoG to make
progress using technical means to fight the problem. PASOK
President George Papandreou assured DAS Kaidanow that if in
government, he would continue the broad lines of Greek foreign
policy, but with better atmospherics. Finance Minster SIderopooulos
focused on Greece's very difficult budget, forecasting a rise in
the deficit to 6 percent of GDP - well over the EU threshold for
special supervision of eurozone countries. END SUMMARY.

FM Dora Bakoyannis


3. (SBU) VISA WAIVER: Dora noted that the Greek parliament had
ratified agreements relating to the Visa Waiver Program (VWP). She
asked whether the U.S. side would be able to wrap up its last VWP
related tasks in time for the UNGA meetings later in September.


4. (C) OSCE CHAIRMANSHIP: DAS Kaidanow thanked the FM for her
efforts as CIO, noting the good work the Greeks have done on
Georgia. Dora said she will keep trying to bring the sides
together on Georgia, but thought Russian intransigence on the
Georgia IDP resolution in the UN might threaten the "Corfu Process"
to review European security architectures. Nevertheless, she saw
value in using the informal Gymnich-like format in OSCE meetings
and hoped that the Corfu Process would continue.


5. (C) TURKEY: Asked about Bakoyiannis' call to Turkish FM
Davutoglu, Dora said she was concerned that there was a "clear
qualitative deterioration in activities in the Aegean." Greece,
she said, was ready at any time to engage Turkey on the
delimitation of the continental shelf, and Greece has been a
staunch supporter of Turkey's EU accession without Turkish
reciprocation. She had called Davotoglu because during a recent
TUAF incursion, one F-16 had, according to Greek information,
passed within 100 meters of an approaching Olympic Airlines plane.
An accident that led to civilian deaths would be a catastrophe.
She had asked Davutoglu why these provocations continued, but said
she had not received a clear answer. DAS Kaidanow pointed out that
anchoring Turkey in Europe is critically important, and urged
continued Greek support for its candidacy. FM noted that time is
short for Turkey to show that it is a serious EU candidate; the EC
will issue a report on Turkey's accession progress in mid-October.
The FM said she had told Davutoglu that he could put meaning into
his pledge of "zero problems" with Turkey's neighbors by changing
the Turkish position on "causus belli." The Turkish parliament
could "agree a new defense doctrine indicating explicitly that
Turkey does not threaten any neighbor with war." She said the
"Code of Conduct" that Turkey had passed to the GoG was not
realistic, as it "basically just divides the Aegean down the
middle."


6. (C) CYPRUS: FM Bakoyannis noted that the island will be
reunified when both sides resolve to create a viable state within
the EU. She was concerned at Davutoglu's statement in Cyprus,
which she characterized asinsisting on Treaty Guarantees and
averring the EU should not be a central issue. Such guarantees were
not consistent with Cyprus' current status as a full EU member,
which should bring benefits to all of Cyprus' citizens. DAS
Kaidanow impressed on the FM the short timeframe for reaching a
settlement, and asked the GoG to encourage the Greek Cypriots to
be flexible, which Bakoyannis said the Greek government was doing.


7. (C) MIGRATION: In response to DAS Kaidanow's query on EU
engagement on Greece's migration problem, the FM said the Turks had
complained that the Greeks had raised the migration issue to the EU
level - which was foolish since it will help bring additional EU
resources to bear to help solve the problem. Greece was unable to
address the migration challenge alone, since the solution will
entail joint approaches - at the EU level and with the USG - to
obtain readmission agreements from the source countries of
Afghanistan, Pakistan, Iraq, etc. The GoG also needs EU help to
implement the readmission agreement signed with Turkey two years
ago.


8. (C) MACEDONIA NAME: The FM assured DAS Kaidanow that Greece's
domestic situation will not derail momentum, as both major parties
were in agreement on the essence of the solution - a hyphenated
name with geographic qualifier, used "erga omnes." She cautioned,
however, that she - unlike UN negotiator Nimetz - saw less reason
for optimism given what she claimed was Skopje's "failure to accept
with pride" a name that would involve a geographic qualifier. She
noted as well that "the GoG needs the agreement to be legally
binding at the UN and within FYROM," and said that the GoG would
not agree to a solution that involved a referendum on one side only
-- the Greek parliament would not agree unless there was a similar
referendum in Greece. She suggested that a referendum giving
Macedonian PM Gruevski broad authority to negotiate would be a
preferable alternative, but showed little flexibility on the issue
in the Greek domestic context.

Deputy Foreign Minister Valinakis


9. (C) Valinakis in his earlier meeting forecast most of the FM's
points, emphasizing Greece's fundamental support for the European
prospects of its neighbors in accord with the requirements and
conditions of EU membership. Greece supported Turkey's EU
perspective, he said, but has yet to see improvements in bilateral
relations. He said it would be hard to continue to promote Turkey's
EU accession without a change in Turkish attitudes. On Cyprus,
Valinakis said the solution will have to be submitted to a
referendum in the two communities, and thus the "out of balance"
Annan Plan solutions would have to be changed to be made acceptable
to both sides. This might take time, and "threats of this being
the last chance won't help." The most important elements to be
addressed now were the security elements.


11. (C) On Macedonia, Valinakis said the original UNSCRs called for
a "mutually acceptable solution," and claimed that the U.S. bore
responsibility for Macedonian intransigence when it recognized
Macedonia by its constitutional name in 2004. DAS Kaidanow replied
that the solution to the name issue was not simply a bilateral
issue between Greece and Macedonia, but had serious implications
for the stability of Macedonia and thus the region as a whole. The
USG perceived a willingness in Skopje to move, and trusted that
Greece would engage seriously to resolve the issue as soon as
possible.

Ministry of Interior Secretary General Constantinos Bitsios


12. (C) Ministry of Interior Secretary General Constantinos Bitsios
outlined for DAS Kaidanow September 1 the challenges of illegal
immigration, terrorism, and public order. He stressed that the
migration numbers were - after a brief period of modest improvement
- again getting worse, with a thousand migrants a week transiting
Turkey to Greek islands. The situation was "out of control."
Conditions for the migrants were "terrible." Bitsios said he would
continue to push northern European countries to understand that
this was an EU-wide problem that needed a sustained EU-wide policy.
He asked for U.S. help to encourage source countries to accept
return of their citizens from Europe. He said he had stressed with
Turkish officials the need for improved border enforcement and
cooperation, but the worsening conditions could lead him to go
public in criticizing the Turkish attitude, as he had done several
months ago.


13. (C) Bitsios was more optimistic on domestic terrorism and
public order, stressing public attitudes had shifted in favor of
greater police powers following the December 2008 riots. The
government could now enact new legislation permitting a DNA
database, surveillance cameras and phone taps. The Ministry was
working to implement these reforms, but it would take some tie to
populate the database and to repair cameras not used since the 2004
Olympics. He predicted a "difficult winter" with anarchist groups
using the traditional November 17 Polytechnic anniversary and the
December 6 anniversary of last year's killing of a teenager to spur
protests and violence. The government would not let the situation
get out of hand as it did last December, he said, and was placing
more police on the streets and instructing them to intervene early
in any demonstrations. The police were making progress in their
investigations of hard-core domestic terrorist groups, but it was
only a matter of time before violent Greek extremists establish
ties with extremists among the newly arrived immigrant populations.
He expressed strong support for close coordination with Western
partners on law enforcement and security.

Deputy Defense MInister Costas Tassoulas


14. (C) Deputy Defense MInister Costas Tassoulas noted September 2
to DAS Kaidanow that earlier that day Parliament had passed an
"umbrella" MOU between Greece and SHAPE that eliminates the need
for separate MOUs for each NATO exercise. Picking up on Kaidanow's
suggestion, Tassoulas said there was a broad consensus among the
major Greek political parties on the country's foreign policy
orientation toward the U.S., although it was "not always obvious"
on the surface. For example, even though PASOK had voted against
the MOU, its MPs all but admitted that they had done so because
they were sure the MOU would pass anyway. Tassoulas cautioned that
the biggest threat to positive views of the U.S. in Greece was the
Greek-Turkish issue. Tassoulas stressed recent examples of Turkish
Air Force over flights of Greece. Kaidanow said that the U.S. was
concerned about the escalatory potential of such incidents, and had
raised these concerns with the Turks, though both sides bore
responsibility for not raising tensions. Tassoulas encouraged the
U.S. to continue stressing this point, arguing that U.S. influence
was likely to be the most effective tool for improving the
situation.


15. (C) Kaidanow thanked Tassoulas for Greece's good cooperation in
Afghanistan, including the recent decision to remove a caveat
limiting the Greek engineering battalion to Kabul, and asked if
there was room for Greece to do more. Tassoulas said Greece would
definitely consider it. He noted that Greek Defense Minister
Meimarakis had recently proposed to the EU that expenses for such
missions abroad not be counted in deficit calculations under EU
fiscal rules, commenting that in the current arrangement countries
are in effect punished for contributing to international efforts.
Kaidanow and DCM noted the importance of U.S. Naval Support
Activity Souda Bay in Crete, and asked for Greek help in finalizing
the approvals for construction of a new fuel pipeline there.

PASOK President George Papandreou


16. (C) Lead opposition PASOK party president George Papandreou
offered a tour d'horizon September 1. He said PASOK had pressed
for early parliamentary elections in conjunction with the June
European Parliament elections, and they could happen as early as
October 4, but at any rate the government will be obligated to hold
them in conjunction with the presidential elections next March
(Note: the day after, Greek PM Karamanlis indicated he would call
for early elections, subsequently scheduled for October 14.). The
suffering economy, political scandals, government corruption, and
low public trust in government made it hard for tough decisions to
be taken. Papandreou said this climate also makes Greece's foreign
policy "jittery." Recalling the days in the late 1990s when he had
been Foreign Minister, Papandreou said a PASOK government could
offer a better atmosphere to solve Greece's problems with it s
neighbors. He would take a less confrontational approach with
Turkey, and work with his Turkish counterparts. Greece would
continue to support Turkey's EU accession "though they are at fault
for the current tensions with their over flights." Once Greece
and Turkey resolve their problems together, Papandreou noted, they
would be a great force for stability in the region.


17. (C) On Cyprus, Papandreou said rebuilding people-to-people
relationships was key. Greece will support, but will follow
Cyprus' lead. On the Macedonia name issue, Papandreou supported
the basic government position, but emphasized that with skillful
talks and the right atmosphere, progress could be made.

Ministry of Economy & Finance Secretary General Ioannis
Sidiropoulos


18. (C) DAS Kaidanow and Ministry of Economy and Finance SecGen
Ioannis Sidiropoulos discussed how Greece's economy is faring under
the financial crisis, Greece's economic policy response, and the
impact of potential elections on economic reforms and growth.
Sidiropoulos confirmed that the crisis has arrived in full measure,
with most real economic indicators showing signs of stress: GDP
turned negative in the second quarter of 2009, unemployment is
rising, and production growth has declined 14 months in a row. He
expects to see a fall in GDP by 1 percent by year's end. The GoG
was focused on limiting expansionary fiscal policy, but the budget
deficit would very likely reach 6 percent in 2009. [Note: This is
the first time a GoG official has moved away from the 3.7 percent
budget deficit target established in the formal 2009 budget passed
by Parliament in December. End Note.] He indicated that the
situation in 2010 would very much depend upon the international
economy, particularly Europe, given how intertwined the Greek
economy was with the EU.


19. (C) Sidiropoulos stated Greece needed consistent reforms to
address its persistent structural problems. The GoG is focused on
implementing structural reforms, including ending the trend of wage
growth outpacing productivity growth by making labor markets more
flexible, alleviating the pressures on the pensions system by
increasing the retirement age, and improving public finances
through more efficient taxation. Elections, he acknowledged, could
disrupt the GOG's drive towards reforms; such a situation could
translate into even lower growth for Greece this year.


20. (U) DAS Kaidanow has cleared this cable.
Speckhard