AMBASSADOR VISITS PRAGUE TO DISCUSS CZECH EU

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SIPDIS

E.O. 12958: DECL: 12/30/2018
TAGS: PREL PGOV EUN SENV EFIN ECON ETTC IR EZ
SUBJECT: AMBASSADOR VISITS PRAGUE TO DISCUSS CZECH EU
PRIORITIES

Classified By: USEU POL MinCouns Chris Davis for reasons 1.4 (a) and (d
)


1. (C) SUMMARY: The Czech EU Presidency, which takes over on
January 1, wants the new American president to meet the EU-27
heads of state in early April in Prague to discuss climate
change and the Middle East. Czech FonMin Schwarzenberg is
considering a trip to Washington in early February to meet
his new counterpart; he will likely propose having SecState
participate in a Gymnich meeting. The January 9 U.S.-EU
PolDir meeting in Prague will discuss Iran, the Eastern
Partnership Initiative, Afghanistan/Pakistan, and
(internally) the Medvedev security proposal. Ambassador
Kristen Silverberg discussed these matters on December 17 in
Prague with U.S. Ambassador Richard Graber, the Deputy Vice
Prime Minister, the Deputy Minister of the Environment, the
MFA Political Director, and the MFA Americas Director. She
also met with Czech think-tank representatives, and was
interviewed by Czech television and print media. She was
accompanied by Embassy Prague PolEcon Counselor and Officers,
and by USEU Pol M-C.


2. (C) On the Middle East, Ambassador Silverberg countered
worries within the Czech EU presidency that the new U.S.
Administration would be slow off the mark on Middle East
peace. A greater worry, she said, is lack of Quartet
discipline (e.g., the French EU strategy paper) regarding the
Israeli-Palestinian dialogue. Known to be close to Israel
and eager to schedule an Israel-EU troika summit, the Czech
EU presidency is also considering a troika with the
Palestinians, given EU member state interest. Ambassador
Silverberg cautioned against movement on the EU Association
Agreement with Syria, absent clear evidence from Damascus
that it is, among other things, stopping the transit of
foreign fighters to Iraq. She welcomed the coming PolDir
discussion on Iran, expressing satisfaction that the EU is
considering new Iranian entities and individuals for
sanctioning. The Ambassador encouraged the EU to better
counter Afghanistan's culture of corruption at the local
level by deploying EUPOL outside of Kabul. The Czech
presidency is exploring a February EU ministerial troika with
Pakistan, and a possible EU-Pakistan summit. Ambassador
Silverberg expressed enthusiasm for the Eastern Partnership
Initiative, but cautioned against a premature invitation to
Lukashenko to attend its inaugural summit.


3. (C) On the economy, Marek Mora, the Deputy to the Vice PM,
advocated a moderate stimulus approach to recover from the
financial crisis, and hopes the Czech Presidency can focus on
increasing EU economic competitiveness. The Ambassador
welcomed the Czechs' plan to organize the Transatlantic
Economic Council in May, and she advocated a balance between
strategy and practical projects in the TEC. On energy
security, a Southern Corridor summit, tentatively scheduled
for March 19, may be shifted to May or June. Czech Prime
Minister Topolanek has undertaken a sensitive initiative with
Cyprus, apparently related to Turkey opening the Energy
Chapter toward EU accession. Relieved that the EU climate
change and energy package legislation was adopted that same
day by the European Parliament, Czech Deputy Environment
Minister Jan Dusik listed as his other priorities
preparations for the UN climate change conference in
Copenhagen, ozone depletion, waste management, and soil
protection. END SUMMARY

MEETING THE NEW U.S. ADMINISTRATION


4. (C) Eager to engage the next U.S. Administration, the
Czech government is as keen as ever to host an informal
summit meeting, preferably in Prague, before or after the
April 3-4 NATO summit. Marek Mora, Deputy Vice Prime Minister
(aka State Secretary) for European Affairs, told Ambassador
Silverberg that the EU 27 heads of state or government would
discuss climate change and the Middle East with the new
American president. Interest in an informal summit was
reiterated by MFA Political Director Martin Povejsil and MFA
Americas Director Katerina Fialkova during Ambassador
Silverberg's December 17 visit to Prague.


5. (C) As for contact with the new Secretary of State, MFA
Americas Director Fialkova said plans were afoot for Foreign
Minister Karel Schwarzenberg to visit Washington February
9-10. Political Director Povejsil said the Czech EU
presidency would like to invite the Secretary of State to a
Gymnich (informal EU-27 FonMin) meeting March 27-28; however,
Ambassador Silverberg noted (to Povejsil and to Mora) how
close that was to the planned G-20 and NATO summits in early
April. She suggested that the March 5 NATO informal
ministerial meeting might offer an opportunity for a U.S.-EU
ministerial troika, or else a Gymnich-like meeting in May.
The Ambassador urged Fialkova to lay the ground work for

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speedy agrement for her successor, so that the next USEU
Ambassador could be enlisted early on to help with these
desired meetings.


6. (C) Jan Dusik, the First Deputy Minister of the
Environment, told Ambassador Silverberg that his minister
would seek to meet his new U.S. counterpart(s)in Washington,
and she quickly reviewed for him the fresh nominations by
President-elect Obama for EPA, CEQ, and White House Counsel
for the Environment - the latter not requiring confirmation
and presumably available earlier.

AGENDA FOR EARLY JANUARY: GAC and POLDIR MEETINGS


7. (C) PolDir Povejsil told Ambassador Silverberg there would
be, on January 8, an informal General Affairs Council (GAC)
hosted by Deputy PM Alexandr Vondra with three topics on the
agenda: transatlantic relations, energy security, and the EU
institutional framework. Povejsil said a food-for-thought
paper would steer the TA discussion toward economic
cooperation (notably the TEC),energy security, the Middle
East, and cooperation in Afghanistan and Pakistan. State
Secretary Mora indicated that FM Schwarzenberg will lead the
discussion on these transatlantic relations topics at the GAC
lunch. Mora said the food-for-thought paer would likely be
a short internal EU document.

8. (C) On January 9, the Political Directors meeting with A/S
Fried in Prague proposes to cover Iran, Eastern Partnership,
and Afghanistan and Pakistan. There will also be an
"internal" discussion on the Medvedev security initiative,
according to PolDir Povejsil.

DIVISION OF LABOR ON EU ISSUES, AND "EUROPE IN THE WORLD"


9. (C) Ambassador Silverberg asked Deputy Vice PM Marek Mora
how the EU portfolio would be divided between the Prime
Ministry and the MFA. Mora said he now has the title of
State Secretary for EU Affairs, the better to capture his
role as coordinator for all the Czech government ministries.
For general matters, he said, "always feel free to call me."
For foreign affairs, privileged MFA contacts would be Deputy
FM Tomas Pojar, PolDir Povejsil and Director General Secka,
he said.


10. (C) Mora confirmed that "three E's" (economy, energy
security, external relations) resumed the overall priorities
of the Czech EU Presidency. He announced that external
relations would henceforth be known as "Europe in the World,"
since that formulation preserved the 3-E formula in more
languages, including Czech.

THE MIDDLE EAST: EU/ISRAEL AND EU/PA SUMMITS, SYRIA


11. (C) In Ambassador Silverberg's meeting with PolDir Martin
Povejsil, he told her the EU would need to manage the Middle
East peace process should the U.S. disengage somewhat because
of the transition. The Ambassador responded there was little
chance of that; rather, a bigger risk was extraneous
initiatives - such as the recent French EU action strategy
paper - disrupting bilateral Israeli-Palestinian discussions
under Annapolis. She reminded Povejsil that Israeli FM Livni
quickly snuffed the French paper to prevent it becoming a
distraction during the Israeli election campaign. Povejsil
said Prague was somewhat more nervous about what HMG FM
Miliband might undertake. (Note: Czech PM Topolanek visited
British PM Brown in London December 18. End Note)


12. (C) USEU Ambassador Silverberg also cautioned State
Secretary Mora about distracting the Israelis and
Palestinians from their trust-building dialogue. Reiterating
Povejsil's desire to see EU-Israel relations deepen, Mora -
who admitted, "I'm not a diplomat" - said he was somewhat
surprised to learn just how close Israel considers the Czech
Republic. Hopeful to see an Israel-EU troika summit, Mora
said it would likely be a hard sell with some EU member
states. On the flip side, however, Mora mentioned that
FonMin Schwarzenberg had announced, on December 15, that the
EU would explore the possibility of a troika with the
Palestinian Authority.


13. (C) Ambassador Silverberg cautioned the EU against
handing Syria the carrot (an allusion to the revived
Association Agreement) before concrete improvements in Syrian
behavior, not only with regard to Lebanon, but also regarding
transit through Syria of foreign fighters heading to Iraq,
non-proliferation, and the sheltering of terrorist groups.
Mora averred that this question would be in the hands of the
foreign ministry.

IRAN


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14. (C) Noting Iran on the agenda for the PolDir meeting
January 9, Ambassador Silverberg expressed to PolDir Povejsil
USG satisfaction that the EU is considering additional
designations of Iranian individuals and entities under the EU
Common Policy on Restrictive Measures Against Iran. She
highlighted Iranian Shipping Lines (IRISL) as an important
target not yet designated by the EU. She surmised that the
new U.S. administration would also support stronger EU
sanctions against Iran, noting that Senators Obama and Biden
had co-sponsored the Iran Sanctions Act and had spoken during
the campaign on the need for stronger sanctions.

AFGHANISTAN and PAKISTAN


15. (C) In anticipation of the possible discussion on
Afghanistan at the PolDir meeting January 9, Ambassador
Silverberg reiterated to PolDir Povejsil and to Marek Mora
USG desire to see the EUPOL deploy outside Kabul.
"Afghanistan is not just a NATO conversation," the Ambassador
noted, emphasizing the EU's responsibilities on the civilian
and police side. On Pakistan, Mora mentioned the possibility
of an EU-Pakistan summit under the Czech Presidency.

EASTERN PARTNERSHIP: WHAT ABOUT BELARUS?


16. (C) Along with the Western Balkans and the transatlantic
relationship, the EU's Eastern Partnership Initiative will
occupy a prominent position in the Czech presidency's Third
E: Europe in the World, according to Marek Mora. He spoke of
the summit hosted by the Czech Presidency to launch the
Initiative, saying it would be the EU-27 "plus the five or
six, depending on Lukashenko." As she had done in her
meeting with PolDir Povejsil, Ambassador Silverberg said the
USG was enthusiastic about the Initiative, but not about an
invitation which would prematurely rehabilitate the
Belorussian president. Mora responded that the summit would
be held after the six-month suspension (Note: of travel
restrictions against certain officials of Belarus, including
Lukashenko, adopted formally at the November 10 GAERC, during
which time Minsk should make electoral code and other
reforms). The Ambassador urged that any invitation to
Lukashenko not go out before a review of this six-month
period.

THE FIRST E: ECONOMY/FINANCIAL CRISIS RESPONSE


17. (C) Deputy Vice PM Mora said that, were it not for the
current financial crisis, the focus for the "first E" was to
have been on improving Europe's economic competitiveness
through research and development, education, flexible labor
markets, and a WTO accord. He was still hopeful the March
18-19 European Council could return to this agenda. But in
the short term, the Czech presidency will need to finish the
emergency financial regulatory and stimulus initiatives
started under the French presidency. Mora, who said he was
an economist by training (Note: and who worked for more than
three years recently for the EC's DG for Economy and
Finance),agreed it was important to have a stimulus package;
however, it should amount to what is needed, and not be a
stimulus competition. He embraced what he said was Angela
Merkel's more restrained approach. Noting that the Czech
Republic was not in the Eurogroup, Mora said its president,
Jean-Claude Juncker, would brief Prague as necessary before
the monthly ECOFIN meetings the Czechs would chair.


18. (C) Ambassador Silverberg warned against "opportunism,"
such as the EU proposing (through Internal Market
Commissioner McCreevy) that credit rating agencies be
domiciled in Europe, which would run counter to the principle
of a coordinated Transatlantic response (a point she also
made to the Czech think tank representatives). Mora
responded that the Czech presidency will not always agree
with the Commission, and will listen to U.S. concerns.

ECONOMY/TEC: FINDING THE RIGHT BALANCE


19. (C) PolDir Povejsil said that the TEC needed to be more
strategic and focus on medium-to-long-term planning to stay
relevant. Saying Deputy PM Vondra would chair the next TEC,
likely in May, Americas Director Katerina Fialkova told us
that more strategic and political issues would attract
high-level interest. Recognizing that the Commission and the
French presidency often worked at cross purposes, Fialkova
said the Commission would have a larger role in organizing
the next TEC than under the French presidency, and could use
U.S. encouragement. Germany and the northern European
countries would most likely reinforce the message, she said.


20. (C) The Ambassador told Fialkova that she was pleased the
Czech presidency was contemplating a TEC in the next
semester. She told all her interlocutors she was sanguine

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about the TEC's future, given the positive TEC meeting the
week before, including, for example, progress on accounting
standards. Parliamentarians, too, had a good discussion on
100-percent container scanning. The Ambassador noted that at
the TEC both sides agreed the TEC was important, and they
vowed to produce a work plan by the end of 2008. She added
that getting the agenda out earlier will improve transparency
and Czech stakeholder buy-in. While there may be a place for
strategic discussions, stakeholders should be alert to
"middle-ground" practical outcomes as well. Had sustainable
bio-fuels been discussed a year ago at the TEC, she
suggested, we could have avoided divergences in our proposed
regulatory responses. In the meetings with Mora and Deputy
Environment Minister Dusik, Ambassador Silverberg spoke about
promising "Lighthouse" projects in green technology, hoping
that the Czech presidency can help get the Council to approve
the necessary amendment to the TEC Framework to do them.

ENERGY SECURITY: APPROACHING CYPRUS


21. (C) On the subject of the second overall priority for the
Czech EU presidency, energy security, Marek Mora favored a
summit to discuss the Southern Corridor, which he said would
likely take place in May or June. The Spring European
Council meeting of March 19-20 should bless an energy action
plan, he told us. Moldova, as a transit country, would be
invited to the summit, which, Mora stressed, was not intended
to provoke Russia. Ambassador Silverberg welcomed the
prospect of an inter-governmental agreement on Nabucco,
however difficult, noting that high-level attention to
Azerbaijan is paying off. She added that Turkey was also
being more cooperative.


22. (C) On Turkey, the Ambassador encouraged the EU not to
confine its rhetoric to the explicit expectation of just two
accession chapters to be opened per presidency, though
acknowledging that the potential chapters were increasingly
finite in number; Turkey needs encouragement. She said she
hoped the Czech presidency could persuade Cyprus to open the
Energy Chapter with Turkey, adding, "We're ready to help."
Mora answered that Prime Minister Topolanek has undertaken
some "trials" in this regard, which were very sensitive. He
would say no more, other than to characterie his Prime
Minister as a friend of Cyprus and Turkey.

CLIMATE CHANGE: LEADERSHIP ON EMISSIONS REDUCTIONS


23. (C) First Deputy Environment Minister Jan Dusik told the
Ambassador he was pleased the European Parliament had that
very day approved the EU's climate and energy package,
relieving the Czech presidency of having to manage a second
reading of the legislation. Despite compromises, the EU's
"unilateral" 20 percent emission reduction -- with the
possibility of 30 percent, if there is a global agreement
after Copenhagen, Dusik said -- was a "positive signal." The
Ambassador raised the implications of ongoing internal EU
debate for Copenhagen, to which the Minister's Envoy for
Climate Change, James Hunt, defended the "common
differentiated responsibility" as being very clear. Hunt
then shifted the discussion to the promise of adaptation
funding for emerging economies, notwithstanding the "Mexican
standoff" over UN control of such funding. Hunt said South
Africa had a balanced view and was well respected, and
suggested that the U.S. make it its first stop on a G-77
trip.


24. (C) The Ambassador asked what the EU thought about
president-elect Obama's pledge to reduce emissions to 1990
levels by 2020. James Hunt responded that while such a
reduction would show substantial efforts by the U.S. and
satisfy the proponents of "comparable cost," it would not
convince those advocating greater political commitment. In
Hunt's view, the U.S. "shared vision for 2050" would be
easier to sell in Europe, but would increasingly require
moving away from reference years toward using absolute levels
per capita, such as 2.5 tons of carbon emissions per person
by 2050. Hunt said this shift in thinking will not be
adopted in Copenhagen, if only because current estimates for
China are 6 to 6.5 tons per capita. He said the U.S. pledge
to cut emissions by 80 percent by 2050 is praiseworthy;
however, setting intermediate goals would make it more
credible. Dusik and Hunt both said the need to pass domestic
legislation in 2009 would complicate the Obama position.


25. (C) Deputy Minister Dusik underscored that the top Czech
EU presidency climate change goal is to prepare for
Copenhagen, to include solving financing. His other EU
presidency agenda (with the European Parliament) includes
ozone depletion, industrial emissions directives, electronic
waste, bio waste, the marketing of recycled products, and
soil protection directives. Dusik said he had had meetings

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recently in Brussels with U.S. businesses regarding
industrial emissions. James Hunt said, as Chair of the
Environmental Experts Group of Finance and Investment, he
took the position that the current financial crisis is not an
excuse to ignore climate change, and that it actually
presented win-win opportunities for stimulus packages to
favor green options. He asked us to identify and put him in
touch with a U.S. counterpart in charge of environment
finance and investment, which Embassy Prague EconOff
undertook to do.

SILVERBERG





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