LUXEMBOURG: SEPTEMBER ISSUE - "DISPATCHES FROM THE

C O N F I D E N T I A L SECTION 01 OF 03 LUXEMBOURG 000288

SIPDIS

DEPT FOR EUR/WE LUX DESK VALERIE BELON

E.O. 12958: DECL: 10/05/2019
TAGS: PREL NATO PINR PGOV EU LU
SUBJECT: LUXEMBOURG: SEPTEMBER ISSUE - "DISPATCHES FROM THE
DUCHY"

REF: A. SECSTATE 088675

B. SECSTATE 092528

C. SECSTATE 090254

Classified By: POL/Econ Counselor Michael Via, reasons 1.4(b)(d)


1. (SBU) Embassy Luxembourg presents the September
"Dispatches from the Duchy" to capture highlights from the
local press, diplomatic and international community, and news
not otherwise reported during the month.



2. (C) Summary: Foreign Minister Jean Asselborn joined
Charge d'affaires for lunch on September 11 following a 9/11
commemorative event held on the Chancery compound. Asselborn
returned to the Chief of Mission Residence (CMR) on September
17 for a private dinner with Special Envoy Dan Fried to
discuss Luxembourg's potential assistance with placement of
Guantanamo detainees. The spread of the H1N1 Virus has risen
to 333 confirmed cases as of September 25. Human-to-human
transmission within Luxembourg is blamed for the majority of
these new cases. The Government of Luxembourg will
accommodate 28 Iraqi refugees from Syria and Jordan in the
framework of the European Union-sponsored resettlement
program. In a break with local protocol, Prime Minister
Jean-Claude Juncker attended the farewell reception for
departing Russian Ambassador Edward Malayan. His Royal
Highness Grand Duke Henri was presented the 2009 Van Thuan
Award by the Vatican "in recognition of his outstanding and
praiseworthy endeavors in the defense of the right to life
and religious freedom." Disgruntled dairy farmers dumped
150,000 liters of milk, valued at USD $60,000, near
Luxembourg City to protest higher prices and lower profit
margins on September 24. Minister of Finance Luc Frieden
announced a projected public budget deficit of 4.4 percent of
GDP for 2010 or approximately USD $2.2 Billion. Possible
amendement to Fulbright Tripartite Commission Agreement
discussed in Brussels. End Summary.


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Lunch with Jean Asselborn; Dinner with Dan Fried
-------------- ---


3. (C) Charge d'affaires hosted Foreign Minister Jean
Asselborn to lunch on September 11 at the CMR following a
9/11 commemorative ceremony held on the Chancery compound
with embassy staff. Still effusive with praise for the
United States and Obama Administration initiatives in the
after glow of his July 30 bilateral with Secretary Clinton,
Asselborn declared that the "dark period of Bush-era Foreign
Policy had now ended" thereby opening the door for a
healthier, more transparent exchange of views with Luxembourg
and with its European Union partners writ-large. He
cautioned that the United States would lose support for
sanctions on Iran from the P-5, specifically Russia, unless
some "flexibility" was demonstrated in U.S. policy concerning
the break-away republics of Abkhazia (Georgia) and South
Ossetia. He suggested that "clarification" of the Ballistic
Missile Defense Shield proposed for either Poland or the
Czech Republic might also soften the Russian position on Iran
and in the Middle East negotiation process. When pressed,
Asselborn offered that the BMD program should be cancelled
entirely if the U.S. hoped to truly "push the reset button
with its former Cold War adversary." Asselborn noted that
sanctions should be considered in the "normal course of
diplomatic activity" and offered to intervene with Russian
Foreign Minister Sergey Lavrov and German Foreign Minister
Frank-Walter Steinmeier, claiming both to be close personal
friends. On Afghanistan, Asselborn said the EU Ministers had
decided against holding a conference in Kabul due to
compelling security concerns and due to the prohibitive
administrative and logistical costs involved. He added that
both Luxembourg and the EU must continue to focus on this
U.S.-led campaign, but admitted that international support
seemed to be dwindling following the German-ordered airstrike
in early September and comments by Prime Minister Berlusconi
alluding to a total withdrawal of Italian troops from the
country. During each encounter with embassy staff, Asselborn
proudly mentions Luxembourg's contribution of 10 troops and
four million Euro to the Afghan effort.


4. (C) Foreign Minister Asselborn and Political Director
Georges Frieden returned to the CMR on September 17 for a
working dinner with Special Envoy Dan Fried, Charge
d'affaires and Executive Assistant Michael Williams to
map-out possible assistance from Luxembourg to the USG on the
Guantanamo detainee resettlement issue. Asselborn stated
that Prime Minister Jean-Claude Juncker and the Christian
Social Party were adamantly opposed to, and would not accept,

LUXEMBOURG 00000288 002 OF 003


any initiative to accommodate detainees in Luxembourg. He
told Fried that now was not the time for Luxembourg to
abandon its ally, and recommended that the sides work
constructively to identify a third country willing to accept
financial, logistical and administrative support from the
GOL. Asked to clarify his offer, Asselborn stated that
Luxembourg could provide funds to transfer detainees to their
ultimate destination, to accommodate (house) for a specified
period of time (to be determined),and to offer occupational
retaining and social reintegration classes. Of the countries
discussed, Albania, Romania and Bulgaria, Asselborn and Fried
agreed that Albania would be the strongest target of
opportunity. (Update: Following initial consultations on
the margins of UNGA the week of September 28, S/GC reported
back to post that Albanian Prime Minister Sali Berisha had
declined to accept assistance from Luxembourg.) Embassy will
provide septel the text of a letter delivered to Asselborn on
October 2 formally requesting GOL approvals for overflight,
landing and transit courtesies at Findel Airport for U.S.
military aircraft.

--------------
Luxembourg to Accept Iraqi Refugees
--------------


5. (U) Immigration Minister, Nicolas Schmit, told local press
officials on September 21 that Luxembourg had agreed to "take
in" 28 Iraqis from Syria and Jordan in the framework of the
European Union-sponsored resettlement program for Iraqi
refugees.

--------------
Major Increase in H1N1
--------------


6. (U) The spread of the H1N1 virus has risen to 333
confirmed cases as of September 25. The new total reflects
an increase of 165 cases for the three-week period from
September 4 to September 25. Unlike previous cases in which
most individuals were reportedly infected while abroad,
human-to-human transmission within Luxembourg seems to
account for the majority of these new cases. Apart from one
individual who died from the virus (exacerbated by other
chronic illnesses) in early September, all others who have
contracted the virus have recovered rapidly without major
complications.

--------------
Juncker Attends Russian Ambassador's Farewell
--------------


7. (SBU) In a break from local protocol, Prime Minister
Jean-Claude Juncker attended the farewell reception for the
departing Russian Ambassador Edward Malayan on September 23.
His attendance, which is the first of its kind since his
participation at a U.S. Embassy reception in 2003, reflects
Juncker's gratitude for Malayan's support to arrange the
successful visit of Russian President Vladimir Putin to
Luxembourg in 2007.

--------------
Grand Duke Henri Receives Vatican Award
--------------


8. (SBU) Luxembourg's Grand Duke Henri was presented the 2009
Van Thuan Award by the Vatican on September 16 "in
recognition of his outstanding and praiseworthy endeavors in
the defense of the right to life and religious freedom." A
private audience with the Pope was held the following day.
Grand Duke Henri made headlines in December 2008 for refusing
to approve a decision by Luxembourg's Parliament to legalize
euthanasia due to reasons of conscience. In the wake of his
rejection, Parliament modified the Constitution to limit the
Duke's power before making Luxembourg the third country in
the EU (after Belgium and the Netherlands) to legally allow
euthanasia. Since the award was presented local press op-ed
pieces, including one written by Alex Bodry, President of the
Socialist Workers Party, (LSAP),the minority party in the
current coalitian government, have been critical of its
presentation to the Grand Duke. Bodry wrote "If the Grand
Duke disregards a 150-year old constitution, he should a
least not be publicly awarded out of respect for a democratic
decision taken by a majority in Luxembourg's Parliament."
The Van Thuan Award is given in memory of Cardinal Van Thuan,
a Vietnamese cardinal who spent 13 years in prison because of
his Catholic faith and whose beatification case was opened in

2007. The Van Thuan Award is conferred to personalities of
distinction who have demonstrated a commitment to the defense
of Human Rights.


LUXEMBOURG 00000288 003 OF 003


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Farmers Protest Milk Price Increases
--------------


9. (SBU) Dairy farmers dumped 150,000 liters of milk valued
at $60,000 near the capital to protest higher milk prices and
lower profit margins on September 24. The protest was
accompanied by distribution of free milk at the central
square in Luxembourg City. The farmers' request for a meeting
with Prime Minister Juncker and Agriculture Minister
Schneider to discuss their grievances went unanswered.

--------------
Budget Deficit Projected for 2010
--------------


10. (U) Finance Minister Luc Frieden announced a projected
public budget deficit of 4.4 percent of GDP for 2010 or
approximately USD $2.2 billion. He acknowledged that the
percentage exceeded the "EU stability pact" of 3%. Frieden
explained that "despite the exceptional circumstances that we
are going through the government is determined to follow its
program". Frieden voiced concern over the government's lower
than normal tax revenue expected for 2010 expecting corporate
tax, Value Added Tax (VAT),and tax on funds (subscription
tax) to each drop by 15 percent. He pledged no increases in
corporate or private taxes for budget year 2010.

--------------
Fulbright Commission Decoupling
--------------


11. (U) Charge d'affaires and PAO Jeffrey Lodermeier
attended the monthly Fulbright Commission Board Meeting in
Brussels on September 23 and broached the topic of possibly
"de-coupling" Luxembourg from the current tripartite
(Belgium-U.S.-Luxembourg) structure to allow for greater
participation by Luxembourg in Fulbright programs. This
concept has been strongly endorsed by Luxembourg Ambassador
to the United States, Jean-Paul Senninger, Treasury/Budget
Minister Luc Frieden (a former Fulbright scholar),and
Minister of Higher Education Francois Biltgen, due in part,
to the announcement that no Luxembourg candidates had been
selected in recent vetting processes and recruitment by the
Commission in Luxembourg has been severely limited. Post
agreed to provide the Commission, Embassy Brussels/EU, and
ECA with a proposal to amend the current agreement, ratified
in 1968, following consultations with the Department.



12. (U) If additional information is required, post point of
contact is Pol/Econ Counselor, Michael Via, e-mail:
ViaMA@state.gov.

BIEDLINGMAIER