SCENESETTER FOR YOUR JULY 11-12 VISIT TO PORTUGAL

C O N F I D E N T I A L SECTION 01 OF 02 LISBON 000358

NOFORN
SIPDIS

FOR DEPUTY SECRETARY STEINBERG FROM CDA DAVID BALLARD

E.O. 12958: DECL: 07/05/2019
TAGS: OTRA PREL PGOV PO
SUBJECT: SCENESETTER FOR YOUR JULY 11-12 VISIT TO PORTUGAL

Classified By: CDA David Ballard, reasons 1.4 (b) and (d)


1. (SBU) Your participation in the Lisbon Ministerial
Conference of the Community of Democracies (CD) comes at the
conclusion of Portugal's term as Convening Group chair.
Portugal has not been as proactive a chair as we had hoped,
so this Ministerial is an opportunity to reinvigorate the CD
as Lithuania takes over as chair. Portugal continues to be a
strong ally, and your visit closely follows Portugal's being
helpful on several issues, including Guantanamo closure,
NATO's ISAF Mission in Afghanistan, and anti-terrorism and
law enforcement coordination under a Preventing and Combating
Crime (PCC) agreement signed during DHS Secretary
Napolitano's visit to Lisbon last week. This is an opportune
moment to reinforce our shared goals and to call for renewed
support for the CD going forward.

UNPRODUCTIVE TERM AS CD CHAIR
--------------


2. (C) Portugal gave a lackluster performance during its
abbreviated 2007-2009 term as chair of the Community of
Democracies Convening Group. Portugal was largely
unsuccessful in coordinating strong CD statements on
democracy crises, and repeated pushes from the US failed to
energize Portuguese leadership. Portugal's term as chair
will end six months ahead of schedule when Lithuania takes
the chair following the Lisbon Ministerial.

PORTUGAL - STEADFAST ALLY
--------------


3. (SBU) Portugal, a founding member of NATO, is a steadfast
ally that has consistently stood by our side over the years
despite changes in government. President Cavaco Silva and
Prime Minister Socrates -- from opposing political parties --
both regularly stress that transatlantic relations are a
pillar of Portuguese foreign policy and that NATO is the
primary guarantor of European security. Portugal is also a
member of the Proliferation Security Initiative, the
Container Security Initiative/Megaports, and the Global
Initiative to Combat Nuclear Terrorism.


4. (SBU) The Portuguese military is engaged internationally
on numerous fronts. Portugal participates in NATO's efforts
in Kosovo (295) and Afghanistan (102 in place, with a
commitment to double its contingent),as well as the UN
mission in Lebanon (146) and Standing NATO Maritime Group
(SNMG) 1 patrolling off Somalia. Portugal participates in
the EUFOR mission in Bosnia (14),provides 87 personnel to
support bilateral cooperation in five Lusophone African
nations, and has 164 national guard personnel policing in
Timor Leste.


5. (SBU) The Portuguese government provides liberal access to
Portuguese air and seaports for U.S. military operations in
support of Iraq and Afghanistan. This year to date 5,065
U.S. military aircraft have overflown Portuguese controlled
airspace and 1,898 have transited through Lajes Air Base in
the Azores.

INTERNAL POLITICS - GOVERNING FROM THE CENTER
--------------


6. (SBU) Portugal's charismatic Prime Minister Jose Socrates
heads Portugal's moderate Socialist government, which assumed
power in March 2005. The Socialists won an absolute majority
in parliament, which has allowed Socrates to govern from the
center without coalitions and helped him implement an
economic reform agenda. By the end of 2007 the government
had succeeded in reducing the budget deficit below the
EU-mandated limit of three percent, a year ahead of schedule,
but since the onset of the global financial crisis the budget
deficit and unemployment have again increased, to 3.9 percent
and 9.3 percent respectively, through May 2009.


7. (SBU) Portugal has national parliamentary elections and
local elections for municipal officials coming up this fall,
on September 27 and October 11, respectively. Economic
difficulties and an ongoing corruption investigation have
eroded the Socialists' lead in the polls, setting the stage
for a fiercely-contested election with the center-right
Social Democratic opposition led by former Finance and
Education Minister Manuela Ferreira Leite. Socrates'
government took another blow on July 2 when Economy Minister
Manuel Pinho resigned after making an insulting gesture to
the Communist leader in Parliament last week. Finance
Minister Fernando Teixeira dos Santos will assume leadership
of the Economy Ministry until the September elections.


LISBON 00000358 002 OF 002


MULTILATERALIST TO THE CORE
--------------


8. (SBU) Portugal places great emphasis on multilateral
institutions, the European Union foremost among them.
Portugal joined the EU in 1986, and a subsequent infusion of
EU funds made possible the construction of Portugal's
national transportation infrastructure. Portugal remains a
net recipient of EU funds, and a majority of the public views
the EU favorably. In fact, Manuel Durao Barroso abandoned
his Prime Ministership halfway through his term in 2004 in
order to assume the presidency of the European Commission.
He is seeking a second term in the wake of last month's
European Parliament elections. On most important foreign
policy issues, Portugal defers to EU consensus. There are
some exceptions, such as Africa, on which Portugal seeks a
leadership role.

FOREIGN MINISTER AMADO
--------------


9. (C) Foreign Minister Luis Amado has been a great friend of
the US, both in his previous capacity as Minister of Defense
and now as Foreign Minister. He is even-tempered, thoughtful,
and low-key, and regularly seeks opportunities to coordinate
policy with the US. He places great importance on presenting
a united public front, whether within the EU, NATO or with
the US. If there are differences, he prefers to discuss them
discreetly. He met with Secretary Clinton in Washington on
June 5. He is likely to step down as FM after the September
elections.

PRIME MINISTER SOCRATES
--------------


10. (C) PM Jose Socrates is a charismatic leader who worked
hard to improve his English in advance of Portugal's 2007 EU
presidency. He relies on advice from a small circle of
advisors. He is a moderate Socialist who has been successful
at coopting or marginalizing the extremists in his party. He
also aggressively pursued his domestic agenda before assuming
the EU presidency, achieving difficult labor and social
security reforms. Socrates spends most of his time on the
domestic agenda, leaving foreign policy largely in the hands
of FM Amado. Economic diplomacy has been a cornerstone of
Socrates' foreign policy and this government has strengthened
ties to Angola, Libya, Venezuela, Russia, and China in order
to bolster Portugal's energy sources and export markets.

PRESIDENT CAVACO SILVA
--------------


11. (C) Anibal Cavaco Silva is the most popular politician in
Portugal. Although the Portuguese presidency does not wield
the executive power of the US presidency, the position is not
ceremonial. Cavaco Silva is commander in chief of the armed
forces and must approve military deployments. He also chairs
the Council of State, which handles all constitutional
issues. Cavaco Silva hails from the right-of-center PSD
party and he often butts heads with Socialist PM Socrates.
But Cavaco Silva generally strives to be a non-partisan Head
of State, and leaves day-to-day politicking to PSD leaders in
parliament.


For more reporting from Embassy Lisbon and information about Portugal,
please see our Intelink site:

http://www.intelink.sgov.gov/wiki/portal:port ugal
BALLARD