FOREIGN MINISTER BAKOYIANNIS' VISIT TO WASHINGTON

C O N F I D E N T I A L ATHENS 000235 SIPDIS E.O. 12958: DECL: 02/19/2019 TAGS: PREL PGOV GR MK SUBJECT: FOREIGN MINISTER BAKOYIANNIS' VISIT TO WASHINGTON Classified By: AMBASSADOR DAN SPECKHARD. REASON: 1.4 (B) AND (D). ¶1. (C) SUMMARY: Greek FM Dora Bakoyiannis will use her visit to Washington to define, publicly and privately, Greece's relations with the Obama administration. A charismatic yet practical politician, Bakoyiannis relishes her job as Foreign Minister, and will offer to work with us on a broad range of multilateral issues. As OSCE Chairman-in-Office, she has moved swiftly out of the gate, pressing creative proposals to maintain an OSCE presence in Georgia and achieving a technical rollover of OSCE's Georgia Military Monitors that keeps them on the ground through June. She will offer to use her contacts with leaders in the Middle East to assist our efforts in the region. And she will cite Greece's ratification this week of NATO accession protocols for Croatia and Albania as a sign of their commitment to the Alliance and its expansion. She will also use the opportunity to press for swift action on their most wanted deliverable: inclusion in the Visa Waiver Program. We also see this as an opportunity to reinvigorate and reorient our bilateral relationship. That means urging additional Greek contributions to NATO operations in Afghanistan, encouraging energy diversity, and urging Greece to resolve its disagreements with Turkey quietly and bilaterally. Finally, we should urge the GOG to continue to work within the UN process to resolve its dispute with the Republic of Macedonia. END SUMMARY. NEW ADMINISTRATION, NEW MOMENTUM ¶2. (C) PM Karamanlis' recent cabinet reshuffle left Dora Bakoyiannis at the helm of the MFA, a job she has held for nearly three years. The daughter of former PM Mitsotakis, she is his strongest potential rival for the New Democracy party's leadership (she consistently polls as Greece's most popular politician),yet (despite near-endless press speculation) she and Karamanlis have worked together cooperatively. They need to. Karamanlis' government was re-elected with two-seat Parliamentary majority in September 2007 that has since shrunk to a one-seat majority. The government has taken additional body blows since then: alleged involvement in various scandals, sinking economic growth, and criticism over its handling of December's police shooting of an Athens teenager and the extensive rioting that followed. The rioting has been followed by a resurgence of domestic terrorism, which Dora takes personally; her first husband was killed by the terrorist group November 17. ¶3. (C) New Democracy has fallen 3-4 points behind its main opposition, socialist PASOK, in opinion polls (though PM Karamanlis personally outpolls opposition PM-in-waiting George Papandreou by about the same margin). Looking for electoral advantage, Bakoyiannis will spin her visit to Washington as signaling a new era of cooperation, both on bilateral and multilateral issues. Greeks have overwhelmingly welcomed the Obama administration; Bakoyiannis will be looking for "takeaways" that demonstrate our ability to work with the Karamanlis government. However, that will require some hard work from Greece as well. VISA WAIVER: GREECE'S BILATERAL GOAL ¶4. (C) For Greece, inclusion in the Visa Waiver Program tops, by far, every other issue in our bilateral relationship. Yet their own footdragging means they have missed the boat not once, but twice; they are the only member of the original EU 15 not to participate. Two out of three key pieces (the HSPD-6 Agreement and VWP MOU) are either in place or nearly complete. The third, the agreement on Preventing and Combating Serious Crime (PCSC) was under review in the Ministries of Justice and Interior since October. We finally received Greek comments on February 20. The Secretary can assure Dora that we will examine it rapidly, and intend to work together to meet DHS requirements as rapidly as possible. PROMOTING MULTILATERAL COOPERATION: IN NATO AND AFGHANISTAN . . . ¶5. (C) Greece has contributed 638 troops to NATO operations in Kosovo, 140 to NATO operations in Afghanistan. 50 to NATO's counter-terrorism operation in the Mediterranean and 45 to the EU's military mission in Bosnia. Greece also contributes directly to U.S. military operations in the Middle East and Mediterranean through the U.S. base at Souda Bay, Crete. But we are pressing our most NATO-skeptic ally for more, particularly in Afghanistan -- including additional trainers, heavy lift helicopters, and funds to sustain an enhanced Afghan National Army. We have also asked them to lift a self-imposed caveat restricting Greek forces to the Kabul region, and have informal indications that may be in the works. On February 17, the Greek Parliament ratified Albania and Croatia's accession protocols; the Secretary will want to congratulate Bakoyiannis on this important step. . . . IN OSCE . . . ¶6. (C) Greece took on the chairmanship of the OSCE in January, and has moved quickly and effectively out of the gate. FM Bakoyiannis has already travelled to Vienna, Albania, Kosovo, Serbia, Georgia, and Russia in her capacity as OSCE Chairman-in-Office. Under her direction, Greek diplomats have crafted proposals (still under review) to maintain a long-term OSCE presence in Georgia, and have achieved a technical rollover of the OSCE Military Monitors in Georgia through June 30, 2009. The Secretary can commend Bakoyiannis' commitment to the OSCE, her work so far, and suggest we cooperate closely throughout the year. The Secretary may also want to highlight our interest in the OSCE's human rights work, including with Roma communities and against human trafficking. Bakoyiannis is keenly interested in hearing the U.S. take on Russian suggestions related to European security. . . . IN THE AEGEAN . . . ¶7. (C) Greece sees an uptick in "provocations" by Turkey in the Aegean, including overflights. Bakoyiannis will underscore the Karamanlis government's commitment to good relations with Turkey (Karamanlis' visit to Ankara last year is the first in fifty years),but will express concern that the Turkish "deep state" has impeded PM Erdogan's ability to deliver on better Turkish-Greek relations. Bakoyiannis will likely to seek the Secretary's help with Turkey in reducing these "provocations." We have encouraged the GOG to respond in a low-key manner and with restraint to any perceived "provocations" and to raise concerns directly with Turkish counterparts. . . . . IN THE BALKANS . . . ¶8. (C) Greece sees the Balkans as its backyard, and is a major investor in the region. That is one reason why Greece has put forward the candidacy of their Ambassador to the United States, Ambassador Mallias, for EUSR (also High Representive) in Bosnia. We have told them that we prefer the UK candidate (Sir Emyr Jones Parry). Nevertheless, we expect Bakoyiannis may make at least a pro forma pitch for him. Greece has not yet recognized Kosovo but during her February visit to Kosovo, Bakoyiannis publicly emphasized that she had come as a "neighbor, and friend," as well as OSCE CIO. Greece is also contributing personnel to the International Civilian Office and its strongest NATO troop contribution is to KFOR. Greece also continues to take a constructive role in promoting a European orientation for Serbia. ¶9. (C) A key issue, for both Greece and for us, is Macedonia. Greece continues to believe that our recognition of the Republic of Macedonia by its constitutional name in 2004 was a betrayal of our bilateral relationship. The Karamanlis government feels it took a major step forward when it agreed that a composite name could include the word Macedonia -- and are aggrieved by the Gruevski government's actions (such as a recent renaming of a planned highway built with EU, including Greek, funds after Alexander the Great). Greece's refusal to approve Macedonia's NATO invitation in 2008 despite the provisions of the Greek/Macedonia Interim Accord was a major source of disagreement. UN led negotiations continue. Bakoyiannis will likely urge us to press the GoM for flexibility. . . . IN THE MIDDLE EAST . . . ¶10. (C) Bakoyiannis is interested in Middle East issues, and has developed contacts with a number of leaders in the region. She may offer her good offices to assist in promoting dialogue there. Greece has an Embassy in Iran, and Bakoyiannis may also offer to facilitate dialogue there. She has been a strong promoter of dialogue among women leaders, and will likely invite the Secretary to participate in a conference to be held in Athens in April on Women Against Terrorism (held uner the auspices of the Women Leaders' Working Group). . . . ON CYPRUS . . . ¶11. (C) Bakoyiannis recently discussed Cyprus with Codel Durbin, and will support efforts by the leaders of both communities to find a settlement. She shares the Karamanlis government's commitment to EU entry for Turkey, and knows that a resolution of the Cyprus issue is essential for Turkey's candidacy to move forward. Yet Greek support for Cyprus' own position in EU fora is expected, both in Athens and in Nicosia. In addition, Bakoyiannis will reiterate that Turkey must meet all EU criteria, and cannot choose among them "a la carte." . . . ON ENERGY DIVERSITY . . . ¶12. (C) We should encourage Greece to promote energy diversity, including within the EU. Currently, Gazprom suplies approximately 90 percent of Greece's pipeline-sourced natural gas supplies. Alternatives include the Turkey-Greece-Italy (TGI) pipeline that will receive Caspian gas, as well as increased reliance on LGN and interconnections between European energy infrastructure. . . . AND THE ECONOMY ¶13. (SBU) The global economic crisis is beginning to have an impact on Greece's real economy. Growth slowed to 3.0 percent in 2008, and the government projects it will slow even further in 2009 to 1.1 percent. While it is only one of a handful of Eurozone countries projected to have any growth in 2009, the slowdown is exposing some weaknesses in the Greek economy; large current account (14.5 percent of GDP in 2008) and fiscal deficits (3.7 percent of GDP in 2008) and a high level of public debt (94.6 percent of GDP in 2008) constrain the GOG's flexibility to develop expenditure programs that can mitigate the slowdwn. SPECKHARD