FINLAND: PM PUTIN SETS CHILLY TONE WITH PM VANHANEN

C O N F I D E N T I A L SECTION 01 OF 02 HELSINKI 000211 SIPDIS NSC TO J. HOVENIER E.O. 12958: DECL: 06/05/2015 TAGS: EIND ENRG FI PGOV PREL SUBJECT: FINLAND: PM PUTIN SETS CHILLY TONE WITH PM VANHANEN REF: 09 HELSINKI 151 Classified By: Charge d'Affaires Michael A. Butler for reasons 1.4(b) a nd (d) ¶1. (C) SUMMARY. Russian Prime Minister Putin set a chillier tone in his June 3 visit to Finland than did President Medvedev last April. Finnish officials found Putin less cordial and less engaged than Medvedev on the bilateral trade matters that dominate high-level Finnish-Russian meetings. In his meeting with Prime Minister Vanhanen, Putin placed natural gas high on his agenda, first issuing a warning that Ukraine's failure to pay up front for gas could create a "crisis" later this month, then urging the Finns to quickly conclude an environmental assessment of the Nord Stream pipeline project. The Finns could offer no promise of a swift and certain resolution to Nord Stream, and they received no clarity on their main trade concerns, an increase in Russian wood export tariffs and a decision excluding trade via road in favor of rail and ship. The overall lighter tone of Medvedev's visit over Putin's has not left Finns hopeful that resolution of persistent bilateral problems would come from the President's office, as Finnish officials consider Putin to be in charge. Finnish officials hope that the twice-annual high-level meetings themselves create pressures to resolve problems, a hope diminished by Russin policies they see having little substance and oherence. END SUMMARY. ¶2. (C) On June 3 RussianPresident Vladimir Putin visited Finland where h me with Prime Minister Vanhanen and President alonen. In discussing the Vanhanen-Putin meetins, various officials from the Ministry of Foreign Affairs said they focused largely on bilateral economic and trade matters. Finnish officials found tone of the Putin-Vanhanen meeting less cordial than President Dmitry Medvedev's meetings during his first State visit to Finland last April (REF). Putin also appeared less prepared than Medvedev and was less talkative, leaving other Russian officials to address many points. Finnish media described the meetings as "chilly," and one journalist described Putin's impatient attitude at a post-meeting press conference as "strange." The atmosphere likely warmed for the Putin-Halonen meeting, which lasted well beyond the scheduled hour. (NOTE: Foreign Ministry officials could only back-brief on the earlier Vanhanen meeting, not the Halonen 
meeting, which ended at roughly 10 p.m. Septel on Halonen's meeting to follow. END NOTE.) Putin wants Nord Stream decision -------------- ¶3. (C) Though bilateral issues dominated, two wider topics arose. As with Medvedev's visit, the Finns raised the question of Russia joining the World Trade Organization, and Putin echoed Medvedev's response that Russia had done what it could and the matter was in others, hands. Putin raised energy and natural gas. Putin first spoke of Ukraine, saying that if Ukraine was unable to meet its obligations Russia would require advance payment for gas. He then gave a "strong warning" that there could be a crisis at the end of June should Ukraine fail to pay. ¶4. (C) The Finns took Putin's underlining of the problem with Ukraine as a blunt hint about progress on Nord Stream, the proposed natural gas pipeline that would pass through Finnish waters. Turning from Ukraine to Nord Stream, Putin said that Russia does not need the pipeline, that it is something "Europe" wants. Nevertheless, he strongly urged the Finns to quickly conclude their ongoing environmental assessment. Vanhanen replied that the government would follow the appropriate environment review process but added they would try to have a decision by early October. (NOTE: Mikko Hautala, advisor to Foreign Minister Stubb, told Pol/Econ Chief officials expected a decision in favor of the project. However, approval would not conclude the Finnish government's role, and Nord Stream backers would need to secure a building permit in a process that would take them into 2010. END NOTE.) Finnish officials sensed in Putin the irritation of other Russian officials who have discussed Nord Stream with the Finns, i.e., the inability to grasp the Finns, refusal to interfere with or supersede a neutral government process. Finns frustrated with tariffs and transport -------------- ¶5. (C) Vanhanen raised with Putin two issues that Finnish officials say exemplify the complete lack of industrial policy in Russia. Vanhanen followed up on the Russians, decision last year (following a Vanhanen request to Putin) to defer an increase in the roundwood export tariff, which threatens an already ailing Finnish wood industry. Putin replied that the government would decide the matter in the autumn. Later, Finnish officials greeted with great skepticism Putin's assertion in the post-meeting press conference that the Russian wood industry had seen investments since the government imposed the tariffs. They acknowledge that their wood industry is in dire straits, but HELSINKI 00000211 002 OF 002 they see opportunities in matching Finnish expertise and investments with Russian resources. The officials believe the export tariffs have hurt investment in the Russian market, something Russian officials fail to grasp. ¶6. (C) Vanhanen also raised with Putin his concern about the Russian custom authority's decision that in six months trade must move via rail or ship, not via road, a decision Finnish officials say would be hugely detrimental to their economy and that they cannot implement in that time frame. Putin surprised the Finns by justifying the decision on the amount of "contraband" passing out of Russia through Finland. According to Finnish officials, Finnish-Russian cooperation on customs and boarder issues is excellent, and no Russian official has pointed to contraband as a concern; they also assert the Russian transport ministry does not support the custom authority's decision. Custody case causes a stir -------------- ¶7. (C) Vanhanen discussed with Putin the custody case of five-year-old Anton Salonen. Salonen's Russian mother took him to Russia and his Finnish father sought his return through the Russian courts. Though the father obtained official decisions in his favor, border officials prevented Salonen's return to Finland and father and son sought support from the Finnish consulate in St. Petersburg. In May a Finnish diplomat placed the two Salonens in the truck of his car and crossed into Finland. Finnish officials expressed surprise to Pol/Econ chief at Putin's harsh public denunciation of the diplomat. Foreign Minister Stubb publicly brushed away the comment, stating that "good neighborly relations" include speaking directly about such matters. Putin did not call for the boy's return. ¶8. (C) COMMENT. It appears Putin is more comfortable meeting with, and speaking publicly alongside, his former counterpart President Halonen than with his current one, Prime Minister Vanhanen. Any frustration exhibited in the Vanhanen meeting, perhaps stemming from a lack of movement on long-standing bilateral issues like Nord Stream and wood tariffs, and new ones like proposed transport restrictions and the Salonen custody case (which Putin acknowledged learning about on the flight to Helsinki) would not be as strong with Halonen, given Putin's long and warm relations with the President. The overall lighter tone of Medvedev visit over Putin's has not left Finns hopeful that resolution of persistent bilateral problems would come from the President's office, as Finnish officials consider Putin to be in charge. Finnish officials hope that the twice-annual high-level meetings themselves create pressures to resolve problems, a hope diminished by Russian policies they see having little substance and coherence. END COMMENT. BUTLER