Identifier
Created
Classification
Origin
09LUXEMBOURG196
2009-07-28 12:56:00
CONFIDENTIAL
Embassy Luxembourg
Cable title:  

LUXEMBOURG SCENE SETTER: FOREIGN MINISTER

Tags:  PREL PGOV PINR ECON LU 
pdf how-to read a cable
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OO RUEHAG RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHLE #0196/01 2091256
ZNY CCCCC ZZH
O 281256Z JUL 09 ZDK
FM AMEMBASSY LUXEMBOURG
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6671
INFO RUCNMEM/EU MEMBER STATES
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
C O N F I D E N T I A L SECTION 01 OF 04 LUXEMBOURG 000196 

SIPDIS

E.O. 12958: DECL: 07/27/2019
TAGS: PREL PGOV PINR ECON LU
SUBJECT: LUXEMBOURG SCENE SETTER: FOREIGN MINISTER
ASSELBORN'S VISIT TO THE U.S.

REF: LUXEMBOURG 193

Classified By: A/DCM, Michael A. Via, reasons 1.4(b)(d)

C O N F I D E N T I A L SECTION 01 OF 04 LUXEMBOURG 000196

SIPDIS

E.O. 12958: DECL: 07/27/2019
TAGS: PREL PGOV PINR ECON LU
SUBJECT: LUXEMBOURG SCENE SETTER: FOREIGN MINISTER
ASSELBORN'S VISIT TO THE U.S.

REF: LUXEMBOURG 193

Classified By: A/DCM, Michael A. Via, reasons 1.4(b)(d)


1. (C) Summary: Foreign Minister Jean Asselborn travels to
the U.S. following ratification of a new coalition government
on July 20. Luxembourg is a staunch ally of the United States
and recently pledged four million Euro per year to support
the Afghan National Army. Post began negotiations with the
Government of Luxembourg (GOL) on July 14 to craft an
arrangement to share terrorist screening information pursuant
to Homeland Security Presidential Directive ) 6 (HSPD-6).
Department may wish to prompt Asselborn for GOL commitment to
this initiative.


2. (SBU) The United States and Luxembourg concluded an
Amendment to the &Double Taxation Avoidance Agreement8 on
May 21, 2009. Luxembourg is recognized as a center of
excellence in a variety of business sectors, including
finance/banking, satellites, steel and the media. The local
chapter of AMCHAM currently represents upwards of 96 U.S. or
U.S.-affiliated enterprises, and would welcome the visit of a
Department of Commerce Trade Delegation to strengthen and
expand ties to the host government.


3. (U) Embassy Luxembourg will engage extensively with the
host government in the year ahead with a number of
commemorative events to mark the 65th anniversary of the
liberation of the Grand Duchy and end of World War II.
Jean-Paul Senninger, Luxembourg,s Ambassador to Washington,
has agreed with the newly-arrived embassy staff to work
actively to enlarge participation in the Fulbright Exchange
Program and other academic/cultural activities geared toward
the country,s youth, a generation once-removed from the
flickering remembrances of the World War II era. End Summary.

--------------
Previous U.S. Visits
--------------


4. (SBU) Asselborn visited New York on June 25 to attend the
UN-sponsored &Conference on The World Financial Crisis and
Its Impact on Development.8 As Foreign Minister, Asselborn
has frequently travelled to the U.S. for UN meetings but has
had relatively few bilateral meetings with U.S. officials.

He met with Deputy Secretary Zoellick in June 2006 and with
Secretary Rice on the margins of an EU meeting in 2005. For
this reason, Asselborn feels somewhat overshadowed by the
presence of long-serving Prime Minister Jean-Claude Juncker,
and will no doubt relish this opportunity for a meeting and
photo-op with the Secretary. (Note: PM Juncker met with
President Bush in 2005 and 2008.) Media attention in
Luxembourg for Asselborn,s trip is expected to be quite high
given Europe,s positive first-blush to early initiatives
from the Obama Administration following recent POTUS visits
to the continent.

--------------
New Government Similar to Predecessor
--------------


5. (SBU) Luxembourg is a staunch ally of the United States
and the tone of the relationship between the two governments
is overwhelmingly positive. Luxembourg,s general elections
on June 7, 2009 resulted in a repeat victory for the
governing Christian Social People,s Party (CSV),led by
Prime Minister Jean-Claude Juncker. This is Juncker,s
fourth, five-year term as Prime Minister. The Socialist
Party (LSAP),the second party in the governing coalition
which Jean Asselborn leads while serving as Luxembourg,s
Deputy Prime Minister and Foreign Minster, gained the second
largest number of votes in the June general election. The
current government is similar to its predecessor: only three
Ministers out of fifteen were replaced and several portfolios
were reshuffled (reftel). These minor changes are not
expected to have any major impact on GOL foreign policy
initiatives. The new Minister of Defense, Jean-Marie
Halsdorf, has been a strong supporter of increasing
Luxembourg,s defense expenditures within NATO and is
expected to continue implementing reform of the army,
ensuring sustained participation in European and
international peace missions.

-------------- --------------
Committed To EU Integration and Consensus Building
-------------- --------------


6. (SBU) A multicultural and multilingual state throughout
its history, Luxembourg has consistently based its foreign
policy on active participation in multilateral cooperation at

LUXEMBOURG 00000196 002 OF 004


both the regional and international level. The GOL has
sought to play a key role in UN activities, and this year
assumed the Presidency of the Economic and Social Council
(ECOSOC). The new coalition government will likely continue
to campaign for a non-permanent seat on the UN Security
Council for 2013-2014, and seek support from the U.S. despite
Australia,s and Finland,s candidacies.


7. (SBU) Luxembourg is arguably the EU member state most
committed to deep and strong European integration. Its
leaders recognize that Luxembourg,s national security is
enhanced -- and its voice in regional and international
affairs greatly amplified -- through its role as a founding
member of the EU. It is not a stretch to say that, in many
cases, Luxembourg,s national objective is "agreement which
strengthens cooperation" rather than a specific substantive
outcome. Consensus-building and cooperation to enhance the
EU are ends in themselves.

-------------- --------------
Negotiations on Sharing Terrorist Screening Information
-------------- --------------


8. (SBU) Post began negotiations with the GOL on July 14
working toward an arrangement to share terrorist screening
information pursuant to Homeland Security Presidential
Directive)6 (HSPD-6). Post shared with the GOL a draft
HSPD-6 agreement for review and comment. While the exchange
of terrorist screening information is a win-win, the GOL,s
primary interest in reaching this accord is linked to
continued participation in the Visa Waiver Program (VWP).
Department of Homeland Security has determined that signing
an agreement pursuant to HSPD-6 would satisfy the 9/11 Act,s
requirement for an instrument to exchange terrorist screening
information. Post has been pleased with the GOL,s response
to our overtures thus far. MFA Secretary General Duhr
explained that it is his government's political will to see
that this agreement be reached, and that it be concluded in a
timely manner. The major sticking point for Luxembourg will
be to determine what information it would be willing and
legally able to share with the USG. Given the VWP link, the
MFA will likely be the driver to secure signature and
ratification of this accord.

-------------- --------------
Agreement Reached Ending Luxembourg,s Tax Haven Status
-------------- --------------


9. (U) The United States and Luxembourg concluded an
amendment to the &Double Taxation Avoidance Agreement8 in
Luxembourg on May 21, 2009. Ratification of this agreement
came on the heels of the April G-20 meeting in London, where
Luxembourg was named to an OECD &grey list8 of banking
secrecy jurisdictions (i.e. tax havens). GOL made it very
clear it wanted the U.S. to be the first partner with whom an
agreement had been reached to comply with OECD standards.
Luxembourg has now concluded the necessary agreements with
all required partners and was removed from the OECD,s &grey
list8 on July 8, 2009.

--------------
Asselborn The Man
--------------


10. (SBU) Jean ASSELBORN, (zhahn, ah-sil-born),Deputy Prime
Minister; Minister of Foreign Affairs (Since July 2004),
born April 27, 1949, spent much of his professional career in
the town of Steinfort, a small city on the Belgian border
through which General Patton,s Army passed en route to
Bastogne during the Battle of the Bulge. Asselborn gained
headlines (and the ire of Prime Minister Juncker) in 2003,
for using his position as head of the opposition in the
Chamber of Deputies to publicly criticize Juncker and
then-Foreign Minister Lydie Polfer, for their reticence to
oppose U.S. military action in Iraq. This event helped to
place him as the Socialist Party,s front-runner for the 2004
elections and probably contributed to the Socialists winning
more seats than the DP (Democratic Party). As a result, the
LSAP emerged as the junior coalition partner, with Asselborn
able to lay claim to both the Deputy Prime Minister and
Foreign Minister portfolios.

--------------
Luxembourg: A Financial Capital In The EU
--------------


11. (U) Although small on the geographic and population
scale, Luxembourg is a leading business location and ranks
among the top international financial capitals of the world.
Luxembourg also serves as the headquarters to major European

LUXEMBOURG 00000196 003 OF 004


public institutions engaged in economic affairs, e.g.,
European Investment Bank (EIB); European Court of Auditors;
and the European Publications/Translation Office.


12. (U) Luxembourg is recognized as a center of excellence in
a variety of business sectors.
- Finance: It is the world,s second largest domicile, after
the U.S., of investment fund assets (now Euro 1.5 trillion or
2.1 trillion USD); administrative and custodial services; and
large banking assets.
- Satellites: Founder and home of the world,s largest
satellite operator group, SES (including SES Astra; SES
Americom; and SES New Skies).
- Steel: Headquarters of the world,s largest steel group,
Arcelor-Mittal, with origins dating to the turn of the 20th
century. ARBED, the Luxembourg national steel company (the
&Ar8 in &Arcelor8),merged with French and Spanish steel
companies in 2002 to develop the iron ore industry and other
resources in the southern part of the country (Differdange,
Dudelange, Esch/Alzette). Prime Minister Juncker,s father
worked at the ARBED steel factory.
- Media: Founder and home of Europe,s largest broadcasting
company, RTL Group (Radio Television Luxembourg).
- Aviation: Home to Europe,s largest and most successful
cargo airline, Cargolux, with an all-Boeing aircraft fleet of
747-400F freighters ) launch customer of the new generation
747-8F freighter.
- ICT/e-commerce: Luxembourg launched LuxConnect as a
national initiative to optimize international bandwidth
connectivity. Many prominent U.S. high technology companies
have established their EU headquarters in Luxembourg,
including Amazon, PayPal, Digital River and Macro Vision.
- Logistics: A priority of the Ministry of Economy under
development.
- Health Technologies and Research: launched a cutting edge
medical research center with collaboration from the
Ministries of Economy, Health and Research, the Public
Research Centers, the University of Luxembourg , and leading
U.S. scientific experts, including Nobel Prize winning
biotech leaders Dr. Jeffrey Trent (TGen),based in Phoenix,
Arizona, and Dr. Leroy Hood, based in Seattle, Washington.


13. (U) Luxembourg commerce is enhanced by attractive
regulatory factors and incentives:
- A proactive and pro-business government and economic
development policy; trade and investment offices worldwide to
promote bilateral trade and investment (called &Board of
Economic Development8, with U.S. offices located in New York
and San Francisco, linked to the Luxembourg consulates in
those cities).
- Economic freedom and opportunity (open foreign investment
regime; low transaction barriers).
- Consistently rated &low-risk8 environment (political,
economic, legal, security) and a high quality-of-life
(minimal pollution and personal safety issues).
- Despite a slight decrease in 2008, high degree of
competitiveness, according to annual world surveys (sustained
economic growth up to the current crisis; balance of trade
and low public debt; lowest VAT rates in the EU).

--------------
Embassy Outreach
--------------


14. (U) U.S. Embassy Luxembourg continues to reach out to
youth and young professionals through a number of academic
and cultural channels:
- Each year the embassy selects two to three young Luxembourg
professionals to send to the United States for intensive
professional programs via the International Visitors
Leadership Program. Recent participants have come from the
University of Luxembourg, the Grand Ducal Police, a French
language newspaper and the Ministry of Foreign Affairs and
Immigration.
- The U.S. Embassy supports a scholarship program for
University of Luxembourg students to spend a semester
studying in the United States. Five Students have already
been selected for this scholarship which is funded by the
Embassy and U.S. companies with offices in Luxembourg.
- We reach out to high school students through an annual
student contest which encourages students to engage on
current topics. The most recent contest, which involved
writing a letter to President Obama, drew 200 participants
from 19 high schools from across the country.
- We continue to seek ways to strengthen Luxembourg
participation in the prestigious Fulbright Scholarship
program, which is managed out of Brussels. Two American
Fulbright scholars will be resident at the University of
Luxembourg during the coming academic year. The embassy has
secured a commitment from Luxembourg Ambassador to the United

LUXEMBOURG 00000196 004 OF 004


States, Jean-Paul Senninger, to institute a mechanism to
increase the number of Luxembourghers participating in the
Fulbright program.


15. (U) The U.S. Embassy will be taking part in the Grand
Duchy,s official commemorations of the 65th anniversary of
the liberation of Luxembourg scheduled for September and
December 2009 and May 2010. To help kick off these important
events, the Embassy will be hosting a special &Luxembourg
Greets America8 concert in Luxembourg City on September 19,
performed by the Bettendorf Firefighters Band.

--------------
Comment
--------------


16. (C) Newly-arrived Charge d,Affaires will use his
courtesy call on July 28 to reaffirm our close ties with the
GOL, and with Minister Asselborn, whose relationship with the
Embassy has been strained in recent years by what he
perceived as frequent &back channels8 between the former
U.S. Ambassador and Defense Minister Luc Frieden on matters
of state. Asselborn,s visit may indeed present an
opportunity to recenter the personal and professional
relationship with the Foreign Minister on a more constructive
course both in Washington and with Embassy personnel in
Luxembourg City. Assessment of the courtesy call to be
reported septel.


17. (U) Embassy point of contact is A/DCM Michael Via,
viama@state.sgov, IVG: 8-677-2240.
BIEDLINGMAIER