READOUT OF A/S GORDON MEETINGS WITH LATVIAN PM AND

C O N F I D E N T I A L SECTION 01 OF 03 RIGA 000430

SIPDIS

E.O. 12958: DECL: 08/13/2019
TAGS: PGOV PREL NATO ECON OSCE LG
SUBJECT: READOUT OF A/S GORDON MEETINGS WITH LATVIAN PM AND
FM: NO SURPRISES

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Classified By: Bruce D. Rogers, Charge d'Affaires, for reasons 1.4 (b)
and (d)


1. (C) Summary: Assistant Secretary Gordon met on August 12
with Latvian Prime
Minister, Valdis Dombrovskis, and Foreign Minister, Maris
Riekstins. Issues discussed included NATO, Latvia's economic
crisis and IMF/EC agreement, Russian foreign policy and U.S.
engagement with Russia, Belarus and Georgia, Jewish property
restitution, and the Baltic American Enterprise Fund. The
meetings were friendly, productive and without surprises.
A/S Gordon emphasized the U.S. commitment to Latvia's
security and stressed that our engagement with Russia would
not come at the expense of our relationships with the
countries of Eastern Europe. Both the FM and the PM
emphasized the importance Latvia places on the bilateral
relationship as well as our collective security goals under
NATO.
End Summary.

Economy
--------------


2. (C) PM Dombrovskis asked for U.S. support for a positive
IMF Board decision on the next tranche of assistance (USD 275
million),which is scheduled for August 27 or 28. A/S Gordon
responded that the U.S. is supportive, but noted that Latvia
had to meet the criteria set out by the IMF, including the
implementation of structurally sustainable budget reforms.
The PM said that Latvia is on track to meet the budget
deficit target of 10 percent of GDP for
2009 and is currently working on the 2010 budget to meet the
European Commission's requirement of an 8.5 percent of GDP
budget deficit next year. The PM said he expects Latvia to
return to growth in the 4th quarter of 2010, but
acknowledged that there is uncertainty about the economic
outlook. The PM also took the opportunity to urge continued
support for excluding Latvia from being listed in the Stop
Tax Haven Abuse Act. Assistant Secretary Gordon promised to
look into the matter.

NATO
--------------


3. (C) A/S Gordon emphasized that the U.S. remains committed
to Latvia's security under Article V and that the U.S.
appreciates Latvia's commitment to NATO's priority mission in
Afghanistan in light of its severe budget constraints. PM
Dombrovskis opened a broader discussion of NATO by asking for
support for the extension of NATO air-policing flights over
the Baltics to 2014, as a tangible signal of NATO in Latvia.
A/S Gordon responded that the NATO Military Committee has
recommended an extension to 2014 of the air-policing mission
and the U.S. supports that recommendation.


4. (C) Minister Riekstins expressed his pleasure that former
Latvian Ambassador to the United States and NATO, Aivis
Ronis, was chosen for the Experts Group working on NATO's new
Strategic Concept. He suggested that Ronis travel to
Washington to meet with key U.S. personnel in addition to his
discussions with the Experts Group. The FM said it is
important that the Strategic Concept include new threats
under the umbrella of Article V protection, including cyber
attacks. A/S Gordon said the U.S. would gladly welcome a
visit to Washington by Ronis.

RUSSIA
--------------


5. (C) A/S Gordon told the PM and the FM that U.S. engagement
with Russia will not come at the expense of its values or its
friends in Eastern Europe. He also stated that the U.S. is
satisfied that progress with Russia was made during the
recent presidential summit in Moscow, but that the jury is
still out on whether we will see a significant change in
relations. The FM said that he would like to cooperate with
a stable Russia and said NATO-Russian relations will be
important moving forward. However, he noted that there was a
lack of unity amongst EU governments on the best approach
towards Russia, highlighting the differences between eastern
and western Europe.


6. (C) A/S Gordon said he left Moscow with the impression
that there is a difference, if only subtle, between Putin and
Medvedev and asked how the Foreign Minister saw the
relationship between the two leaders. In contrast, the FM
said that he saw no difference between Medvedev and Putin.
He said Russians appear to have lost interest in the
political development of their country, as exhibited by an

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erosion of democracy and freedom of expression. The FM
talked about the propaganda campaigns waged in the
Russian-language media
and described it as brainwashing, saying that it reminded him
of Soviet times.


7. (C) The FM highlighted Russia's creation of a special
history verification commission to ensure only the "true"
history of Russia and the Soviet Union is written. The FM
stated that this commission is part of a broader attempt by
Russia to restore its might, and that in order to accomplish
this, it
had to rewrite history.


8. (C) Political Director Ustubs noted pending Russian
legislation to create some form of identity card for Russian
"compatriots" living abroad. Charge Rogers noted that this
move is intended to create a sense of separation between
the ethnic Russian and local ethnic communities in Russia's
neighbors.

A/S Gordon noted that it is an unfortunate coincidence that
many Russian citizens associate economic progress with
Putin's hard-line rule and economic decline with Yeltsin's
democratization program. A/S Gordon also said that
Russia's hard-line stances on issues often results in its
failure to achieve its objectives by hardening opposition to
its positions even on issues where there may have been room
for compromise. A/S Gordon noted the issue of missile
defense as an example of how Russia's aggressive negotiating
tactics were merely making it more difficult to find common
ground, because even if the U.S. had wanted to make changes,
Russia's stance has made it more difficult to do so.


9. (C) Despite the difficulties in the relationship, the FM
said that Latvia wants to encourage dialogue with Russia,
while ensuring that it not be hesitant to be firm on
questions of principle. The FM said that Russian FM Lavrov
has accepted an invitation to come to Latvia for the second
time later this year, assuming progress on a few bilateral
economic agreements can be made at the technical level (e.g.,
double taxation agreement and investment agreement).

BELARUS
--------------


10. (C) On Belarus, the PM offered his opinion that there
were only two paths to follow: engagement or isolation. The
FM made the same point and emphasized the need to engage.
Both referenced the Eastern Partnership approach as the
framework for engagement. The FM said that isolating Belarus
would only serve to push it further into the arms of Russian
influence, and said that Belarus
has shown an openness to the international community,
including through the acceptance of OSCE election monitors.
The FM highlighted the decision by Belarus not to recognize
South Ossetia's and Abkhazia's independence as positive,
considering the counter pressure that must be coming from
Moscow.


11. (C) A/S Gordon emphasized that he was on his way to Minsk
to make the point that the Obama Administration is open to a
new, positive relationship with
Belarus. However, this new relationship is contingent upon
Belarus making progress on several fronts, including freeing
political prisoners and greater freedom of speech and
assembly. A/S Gordon said the U.S. supports the
Eastern Partnership, but that it is up to the leadership of
Belarus to make progress necessary to transform the
relationship. The FM said that if Belarus bows to Russian
pressure and recognizes South Ossetia and Abkhazia, the
international community should be careful how far it goes in
punishing the country.


12. (C) A/S Gordon asked who the Latvians deal with in
Belarus and the PM mentioned that his predecessor met with
his Belarusan counterpart. Most interaction happens on the
ministerial and technical level. In response to a question
from A/S Gordon, Minister Riekstins stated Lukashenko
wouldn't change the political system in any significant way.
The FM concluded by saying that while the international
community should engage with Lukashenko now, it should also
begin to prepare for the day after Lukashenko.

GEORGIA
--------------


13. (C) The Prime Minister described Georgia as one of
Latvia,s two top foreign policy priorities (the other being

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Afghanistan). The PM hopes the EU and the U.S. will continue
to engage and support Georgia. The FM said that the
breakdown in internal Russian politics has influenced how
Russia now deals aggressively with its neighbors, referencing
the conflict with Georgia as an example showing why the
international community needs to be more assertive in
confronting Russia. The FM lamented the international
community's apparent inability to respond to Russia's
military aggression in Georgia and the continuing occupation
of Georgian territory.


14. (C) A/S Gordon responded that the U.S. has provided USD 1
billion in assistance to Georgia and that Vice President
Biden, the Deputy Secretary of State and he, twice, had been
to Georgia already to show our support. He noted that the
U.S. and allies isolated the Russians in the UN and the OSCE,
forcing Moscow to veto Resolution 1808. A/S Gordon said we
must still make them pay a price, but pointed to the failure
of Russia to get even Belarus to recognize the independence
of South Ossetia and Abkhazia. He also pointed to the
lackluster response to Russia,s proposed European Security
Treaty.


15. (C) A/S Gordon told the PM that while the U.S. was
pressuring Russia to show restraint, it is important for
Georgia to consolidate its democratic government. A/S Gordon
said there is no short-term military solution to the problem,
but that Georgia should be whole again in the long-term.
Both the PM and the FM expressed appreciation for the support
the U.S. has given to Georgia.

Jewish Property Restitution
--------------


16. (C) A/S Gordon asked PM Dombrovskis for an update on
Latvia's efforts to secure communal property restitution for
Latvia's Jewish communities. The PM said that Latvia had
made good progress on this issue, noting that 64 properties
had already been returned, and that talks to restore a Jewish
School are ongoing.

Baltic American Enterprise Fund
--------------


17. (C) The PM and FM both requested A/S Gordon's assistance
in securing Riga as the location for the Baltic American
Enterprise Fund's successor foundation as well as his support
for getting having 100 percent of the returns invested in the
successor entity. A/S Gordon noted that this issue had been
raised in FM Riekstins meeting's with Secretary Clinton and
that we are following up, but couldn't make any promises on
the outcome.
ROGERS