SCENESETTER: CHANCELLOR MERKEL'S VISIT TO

C O N F I D E N T I A L BERLIN 001373 SIPDIS WHITE HOUSE FOR THE PRESIDENT FROM THE AMBASSADOR E.O. 12958: DECL: 10/29/2019 TAGS: PGOV PREL ECON MNUC GM SUBJECT: SCENESETTER: CHANCELLOR MERKEL'S VISIT TO WASHINGTON, NOVEMBER 3-4 Classified By: Ambassador Philip D. Murphy for reasons 1.4 (b,d). ¶1. (C) Summary: This meeting will be an opportunity to engage Merkel on achieving several common goals: success in Afghanistan, preventing a nuclear weaponized Iran, and dealing with climate change. You may also wish to discuss the closing of Guantanamo, engaging Russia productively, and advancing arms control. Merkel is a pivotal leader in moving the German public forward to support a greater leadership role for Germany in the world. For her part, Merkel will want to make a case to Congress and the new Administration for emissions targets, international regulation of financial markets, and free trade. She will want to return to Berlin having demonstrated toughness in representing Germany's national interests but also seen as a close and critical partner of the United States. End summary. Merkel's Dream Team and a Left-Leaning Opposition -------------- -------------- ¶2. (C) Angela Merkel will arrive in Washington less than a week after being sworn in as Chancellor for her second term and having realized her goal of forming a center-right coalition government. She has emerged from the September 27 elections still Germany's most popular and trusted politician. You will be meeting with Merkel just after her attendance at the EU Summit in Brussels and days before Germany's historic celebration of the 20th anniversary of the Fall of the Wall at which Secretary Clinton will represent you. This meeting will differ from your last with her in that Merkel is now not constrained by the demands of a political campaign and the affects of short- and near-term domestic public opinion. ¶3. (C) This election marks a continuation for Merkel, but a significant break with the past politically, ushering in her 'dream coalition' with the FDP (Free Democratic Party). Merkel will be focused on setting her own priorities for the next legislative term and will seek U.S. cooperation in promoting economic recovery and growth, progress in addressing climate change, and strengthening Germany's international profile. Progress in these areas will cement Merkel's international leadership role and her party's role in advancing Germany's interests. It will become Merkel's major challenge during this term to strengthen her own party while governing with an on-the-rise FDP. The latter is now feeling its oats after 11 years in the opposition and wanting to deliver on campaign promises such as tax relief. Merkel's new Foreign Minister, FDP leader Guido Westerwelle, however, is inexperienced on foreign policy and may have to take Merkel's lead in the first instance. ¶4. (C) Former Foreign Minister Steinmeier and new SPD Caucus leader will be challenged in managing a left-leaning opposition, both with regard to domestic and foreign policy. The push for a strategy and timeframe for withdrawal of the Bundeswehr from Afghanistan is likely to build within this opposition and could constrain the Chancellor's ability to deploy additional German troops in the North in support of an expanded international effort. Merkel and Westerwelle are aware of this and may try to move forward with unpopular issues early on in the term before the opposition solidifies its positions. Climate Change -------------- ¶5. (C) Chancellor Merkel desires strong U.S. leadership going into the Copenhagen Summit and might encourage the President to attend the conference. Merkel has made environmental concerns a priority and she was a driving force behind Germany's ambitious domestic (40 percent of 1990 levels by 2020) and EU reduction targets. German officials remain hopeful, but have lowered their expectations for the possibility of reaching an agreement at Copenhagen, and they are looking for further evidence of a U.S. commitment to domestic and international actions that will allow us to collectively meet ambitious targets. Merkel,s advisors have expressed concern that both the Administration's and the Congress, mid-term climate goals are inadequate. Merkel wants to avoid any singling out of the U.S. at Copenhagen. Afghanistan -------------- ¶6. (C) The security situation in the North has significantly deteriorated in recent months, and there is recognition at Senior (State Secretary) levels in both the MFA and MOD that additional troops, trainers and resources are necessary to turn the tide and implement McChrystal's strategy. Germany strongly supports COMISAF GEN McChrystal's counterinsurgency strategy and its emphasis on protecting the population over combating insurgents, believing it closely corresponds to the "networked security" approach it has favored all along in Afghanistan. The Germans also share the view that the window of opportunity for achieving success in Afghanistan is closing and that efforts need to be re-doubled to change the current negative dynamic. ¶7. (C) Until recently, there was hopeful talk that the new government would significantly increase the troop ceiling to as high as 7,000 (from the current 4,800) when the parliamentary mandate for ISAF comes up for renewal in December. But with the continuing stalemate over the Afghan presidential election, the ongoing policy review in Washington and SPD threats to oppose any troop increase, the new government is being cautious with proposals to significantly boost its military and civilian contributions in the short run. The Chancellor has decided that any possible increases in troops or civilian assistance can come only after the proposed international conference on Afghanistan, which the Germans hope can be held as early as late January. ¶8. (SBU) Germany is the fourth largest provider of civilian development assistance in Afghanistan and is an enthusiastic supporter of the U.S. Focused District Development (FDD) civilian police training program, which it joined in January of this year. Germany's plans for FDD are relatively unknown and under-appreciated, a message of recognition and appreciation of this and its overall development effort would help ensure Germany follows through with its plans and continue close coordination with U.S. officials. Iran -------------- ¶9. (C) Germany supports the U.S. dual track policy of engagement and pressure regarding Iran,s nuclear program and agrees that a nuclear-armed Iran is not acceptable. This position is not expected to change under the new ruling coalition. Germany is prepared to move forward on new sanctions only after a serious attempt at pushing for a new UNSCR. They will need the "cover" offered by a failed UNSCR attempt in order to get domestic buy-in for EU-wide measures or even like-minded measures. The Chancellor has made it very clear with her staff that she wants Germany to be supportive on the "pressure track" and wants to try at all costs to avoid the alternatives of a military intervention or a nuclear armed Iran. FM Westerwelle's aides have told Embassy officers that his commitment to non-proliferation and Israel's security is stronger than his concerns about the German business community and that he shares the Chancellor's policy on Iran. Meanwhile, Germany has been a close partner in export control efforts pointed at Iran and other countries. Arms Control -------------- ¶10. (C) Germany should prove an enthusiastic partner in support of USG disarmament goals. Foreign Minister Westerwelle's campaign mantra of "peace through disarmament" was repeated in the coalition agreement, further signaling that this issue will figure highly amongst priorities at the MFA. However, the coalition agreement also includes specific language calling for the government to seek discussions on the removal of nuclear weapons from Germany -- both within NATO and bilaterally with the U.S. Somewhat disingenuously, Westerwelle argues that his plan is simply "Germany's contribution" to helping President Obama reach his "Global Zero" goals. ¶11. (C) We should be prepared to address the issue of tactical nuclear weapons in Europe directly with Chancellor Merkel in order to help shape German efforts and manage expectations before the Foreign Ministry maps out its way forward. We should expect that Westerwelle will champion this issue aggressively. MFA officials are already linking this effort to one of Germany's top arms control goals -- implementation of the Adapted Treaty on Conventional Forces in Europe (A/CFE). In their view, an effective A/CFE might encourage Russia to abandon its strategy of using tactical nuclear weapons as a way to overcome deficiencies in its conventional forces. Russia -------------- ¶12. (C) We expect Germany to be less forgiving of Russian bullying of its eastern European neighbors through cut-offs of natural gas supplies, especially given the departure of former Foreign Minister Steinmeier -- known for his relatively pro-Russian views. Still, we expect Germany to continue to place a heavy emphasis on maintaining good relations with Russia, believing that constructive engagement and assistance with modernization are the best way to deal with this difficult "strategic partner." G-20/German Economy/Doha -------------- ¶13. (C) The Chancellor was pleased with the outcome of the G-20 Summit in Pittsburgh, including progress on her signature project, the Charter for Sustainable Economic Activity. So far, the Germans have been keener on the G-20's regulatory agenda than on addressing global imbalances. Germany has already passed legislation that comprehensively limits executive remuneration, but is concerned the healthcare debate in Congress is diverting attention away from serious financial reform. ¶14. (C) On the domestic economy, both Merkel and the new Finance Minister, Wolfgang Schaeuble, have hinted that growth may take precedence over balanced budgets. Her coalition government has proposed tax cuts totaling 24 billion euros by ¶2011. It is unclear, however, whether the cuts will ever materialize given the ballooning budget deficit or come in time to make a difference, let alone improve the current account. The German economy is expected to shrink by 5 percent in 2009, and see modest growth of about 2 percent in ¶2010. ¶15. (C) The new government appears likely to continue the previous government's position on the Doha Round, which is to accept the deal on the table rather than negotiate for greater market opening or transparency, particularly with regard to manufactured goods in advanced developing countries. The Germans argue the gains from reduced barriers between developed countries alone would justify an agreement. The German government is worried that the process will lose steam unless a deal is concluded in the near future, with repercussions on world trade and economic recovery. Pentagon Contract for New Aerial Refueling Tanker -------------- -------------- ¶16. (C) The Chancellery has indicated that Merkel might ask about DOD,s latest attempt to contract for a new aerial refueling tanker. DOD just recently released its draft request for bids and has provided 60 days for public comment. When DOD announced its initial decision last year to award the $35 billion contract to Northrop Grumman and the European Aeronautic Defense and Space Co. (EADS),Merkel publicly welcomed it as a great example of transatlantic defense cooperation and praised the U.S. for its open government procurement practices. Now that the contract will be re-let, after Boeing successfully challenged the Pentagon decision, Merkel will want to emphasize the importance of ensuring a fair and open competition in which non-U.S. companies have an equal chance to win the contract. Murphy