EUR A/S GORDON'S JULY 3 MEETINGS WITH THE EU

C O N F I D E N T I A L SECTION 01 OF 06 STOCKHOLM 000418

SIPDIS

E.O. 12958: DECL: 07/09/2029
TAGS: EUN PREL PGOV IR RS SW
SUBJECT: EUR A/S GORDON'S JULY 3 MEETINGS WITH THE EU
POLITICAL DIRECTORS

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Classified By: CDA LAURA J. KIRKCONNELL FOR REASONS 1.4(B) AND (D)

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SUMMARY
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1. (U) Assistant Secretary for European and Eurasian Affairs
Phil Gordon met with the 27 EU Member State Political
Directors in Stockholm July 3. He then met with the EU
Political Directors "troika," comprising Swedish PolDir Bjorn
Lyrvall, EU Council Secretariat DG Robert Cooper, EU External
Relations Commission PolDir Karel Kovanda, Spanish PolDir
Alfonso Lucini, and EU Council Secretariat Policy Coordinator
Helga Schmid.


2. (C) On Iran, A/S Gordon emphasized that post-election
developments have not altered the Obama Administration's
fundamental approach to the nuclear question, and UK PolDir
Mark Lyall-Grant urged the EU to be in position "to move
rapidly" with new sanctions at the beginning of the Spanish
EU Presidency in January 2010. On the Middle East peace
process, the United States was focused on creating the
conditions necessary for peace before proposing full-scale
negotiations. This would require a stop to Israeli
settlements and efforts to build up Palestinian security
capacity and an end to violence and incitement. French
PolDir Gerard Araud raised the possibility of an EU security
force in support of a possible agreement. Regarding the
U.S.-Russia relationship, Gordon said that the Russians are
testing the Obama Administration to see if it will compromise
on its principles; it won,t.

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IRAN
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3. (C) Swedish MFA Political Director Bjorn Lyrvall opened
A/S Gordon's discussion with the EU 27 PolDirs by noting
growing concern over internal developments in Iran following
last month's presidential elections. Terming as "outrageous"
regime statements blaming the unrest on foreign actors,
Lyrvall discussed the importance of EU unity in response to
the detention of local employees of the British embassy in
Tehran and noted that the EU Political Directors had
discussed "possible responses" to the detentions during their
meetings earlier in the day. Asked to brief on the nuclear
file, EU DG for External and Politico-Military Affairs Robert
Cooper replied that he had little to say. The post-election
unrest in Iran seemed to entail "no new cooperation, perhaps
rather less," and the Iranian regime was now weaker and less
legitimate. Cooper continued that "the prospects look
difficult" for a meaningful Iranian response to the P5 1
offer, and that we had always seen this year as the key year
for addressing this issue. Cooper concluded that, in the
second half of this year, we must have "the beginning of a
breakthrough."


4. (C) In his introduction, A/S Gordon expressed the
importance the Obama Administration attaches to working with
Europe, stressing that the U.S. realizes that it cannot
handle matters alone and that Europe is our most natural
foreign policy partner. Concerning Iranian election unrest,
he said that the Administration's policy had denied the
regime the opportunity to blame the U.S. so now it was
turning to the UK. Asked about links between the
post-election domestic situation and the negotiations on the
nuclear file, A/S Gordon suggested that the regime might
pursue one of several options. It might decide to engage the
P5 1, which A/S Gordon (and other EU PolDirs) assessed as
unlikely. Or it could pretend to engage, while forestalling
meaningful action. Lastly, it could refuse any dialogue.


5. (C) While now is not the time for the USG to increase its
engagement, it is also not the time to reduce it, Gordon
continued. The President's approach would continue to
highlight the path Iran would need to take to address
international concerns. But the clock was ticking as long as
enrichment continued, Gordon added, so he urged the PolDirs
to start thinking now about actions they might need to take
by the end of the year to increase pressure on Tehran. "Each
day that passes sharpens the binary choice between accepting
a nuclear Iran or a military strike, either by Israel or the
U.S.," Gordon continued. The successful development of a
nuclear capability by Iran would spell the death of the
Non-Proliferation Treaty, he concluded, because the
international community would not be able to maintain
credibility with other would-be nuclear powers.


6. (C) UK Political Director Lyall-Grant agreed that the
prospects for negotiations with Iran were not good, but

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argued that the P5 1 must persevere "because the alternatives
are grim." If talks do not yield progress soon, then the EU
must "discreetly" think about additional sanctions even in
the absence of a UN Security Council resolution, which would
be unlikely given the Russian and Chinese positions. The EU
should be in position "to move rapidly" at the beginning of
the Spanish EU Presidency (in January 2010) with a set of
sanctions that are "very substantive" in the areas of "trade,
banking and possibly the hydrocarbons sector." He also
expressed gratitude for U.S. and EU solidarity with the UK
concerning its local embassy employees in Tehran.


7. (C) Iran was turning into "a military dictatorship with an
extremist ideology," stated German Political Director Volker
Stanzel. Therefore, the international community must not
"play the game the Iranian leaders want" and must not
escalate in response to Iranian escalations. Rather,
engagement with the Iranian opposition should continue where
possible. Moreover, the international community should press
Tehran for a "yes/no" answer to the P5 1 proposal by the time
of the UN General Assembly in September. Efforts to keep
Russia and China "in the boat" would be important, but even
without them the EU and United States should "go ahead
anyway" with additional autonomous sanctions.


8. (C) Spanish PolDir Alfonso Lucini noted "consensus that we
need to prepare a Plan B," but asked whether enhanced
sanctions would "be enough" if Russia and China were not on
board. Saying he preferred further UNSC action on Iran, A/S
Gordon acknowledged that PRC leaders' concerns regarding
China's internal stability*which requires sufficient oil
imports to maintain economic growth*was a key factor in PRC
policy on Iran. And while Russia did not want to see a
nuclear Iran, it might also be motivated by a desire to
ensure that the United States and the EU do not enjoy a major
foreign policy success in the Middle East. Indeed, some in
Moscow might see advantages for Russia if Israel or the
United States used force against Iran, which in their view
would seriously damage U.S. standing in the region, as well
as dramatically increase the price of oil. Even if Russia
and China refused to support a new UNSC, joint U.S.-EU
actions would have a powerful impact on trade -- and be a
powerful statement with respect to regime legitimacy. And if
there were no new effort on sanctions, that failure to act
would send a message to the rest of the world about the low
risk of pursuing a nuclear program.

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MIDDLE EAST PEACE PROCESS
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9. (C) Turning to the Middle East peace process, A/S Gordon
noted that after extensive consultations in the region,
Special Envoy Mitchell had concluded the time was not ripe
for full-scale negotiations between the Israelis and
Palestinians. Rather, the conditions for successful
negotiations needed to be created first. The United States
had "visibly and publicly" called for Israel to halt all
settlement activity, which helped create an atmosphere in
which we could ask that Arabs do hard things as well. S/E
Mitchell has been urging Arab governments to support the
Palestinian Authority's security services in an effort to
enhance security in the West Bank and Gaza. The U.S. saw no
logic to engagement with Hamas until it renounces violence
and recognizes all past agreements, A/S Gordon continued.
While the U.S. and EU both need to remain engaged with both
the Israelis and the Palestinians, there might be benefits in
Washington focusing its efforts on getting a stop to
settlement activity while the EU focused on efforts to build
security in the PA-administered territories.


10. (C) Lyrvall said the EU very much welcomed the U.S.
approach and the President's Cairo speech. The gap between
the Israelis and Palestinians is very deep. Greek PolDir
Tryphon Paraskevopoulos stated that "no one in the Middle
East thinks Iran will actually use nuclear weapons against
Israel." Rather, they think Israeli concerns over the
Iranian nuclear program are motivated by a desire to not lose
their strategic dominance. He noted that whenever the
international community took actions against Iran, Iran
responded by firing up Hamas and Hizbullah to cause trouble.
A regional approach, therefore, was needed, including
improved ties with Syria. The Greek PolDir concluded
elliptically that Qatar and Saudi Arabia needed to "stop
playing with fire." A/S Gordon noted that Syria is the
conduit for Iranian arms into the region, and that U.S.
diplomacy is focused on weaning Syria away from Iran.


11. (C) French PolDir Araud said that we should not get into
any prolonged negotiations with the Israelis on settlements;

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the core issue is negotiations between the Israelis and
Palestinians. The Knesset is unable to act. We already know
the parameters of the peace agreement. If there is no strong
international commitment to working this, the parties will
not negotiate, he said. Nothing will be possible if the
U.S., the EU, and the Arab states are not united in pressing
both sides. He also raised the possibility of an EU security
force in support of a possible agreement. A/S Gordon agreed
with Araud on settlements, but said that we need to improve
the context for real negotiations by making progress on
smaller issues, and that the U.S. call for stopping
settlements resonates with the Arabs, and helps with asking
them for funding for the PA and reaching out to Israel.

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AFGHANISTAN/PAKISTAN
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12. (SBU) A/S Gordon outlined the significant steps the Obama
Administration was taking in Afghanistan: 21,000 additional
troops, the appointments of SR Holbrooke, LTG McChrystal,
Amb. Eikenberry, as well as certain changes in strategy such
as on narcotics. He asked that European governments do more
to explain to their publics that the EU is not helping the
Americans with "an American war." Afghanistan and Pakistan
are global problems with serious security and humanitarian
concerns for Europe. Lyrvall agreed, pointing to ongoing
discussions within the EU on doing more on the civilian side,
and noting that the upcoming Afghan elections were crucial.
European Commission PolDir Kovanda stated that the EU will
deploy 250 observers from Member States, PRTs and local
missions to monitor the elections along with 8,000 Afghan
observers, and expressed gratitude for NATO,s indispensable
in extremis support.

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RUSSIA
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13. (C) At Lyrvall's request, A/S Gordon offered some
impressions to the group on U.S. relations with Russia. He
said that we are looking to restore relations while also
stressing our core principles; e.g., no spheres of influence,
democracies have the right to choose alliances, and
non-recognition of Abkhazia and South Ossetia. The Russians,
for their part, are exploring U.S. willingness to compromise
in the name of better relations, which we will not do. A/S
Gordon said that with regard to the Medvedev proposals, the
U.S. is not prepared to compromise on European security.
Lyrvall asked about expectations for the Moscow Summit. A/S
Gordon said we were not trying to overstate expectations, but
we are talking seriously with the Russians on arms control
and Afghanistan. Lithuanian PolDir Eitvydas Bajarunas urged
a common U.S.-EU approach on Belarus and Georgia, and A/S
Gordon replied that we can only interpret the Zeltser release
as an expression of Belarus's interest in better relations,
and that he was planning to go to Belarus himself. He said
Georgia was a good example of the U.S. not compromising its
principles in the name of better relations with Moscow-- in
fact, Russia had been isolated on decisions regarding OSCE
and UNOMIG ) and he noted the Vice President's upcoming trip
to Georgia and Ukraine.

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TROIKA MEETING
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14. (U) After his meeting with EU27 PolDirs, Gordon held a
smaller meeting with the EU Political Directors "troika,"
comprising Swedish PolDir Bjorn Lyrvall, EU Council
Secretariat DG Robert Cooper, EU External Relations
Commission PolDir Karel Kovanda Kovanda, Spanish PolDir
Alfonso Lucini, and EU Council Secretariat Policy Coordinator
Helga Schmid. This smaller discussion focused on Russia, the
Eastern Partnership region, the Western Balkans, and
non-proliferation.

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RUSSIA
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15. (C) A/S Gordon conveyed that the U.S. may be making some
progress with Russia on START follow-on negotiations, and may
also be making progress with regard to cooperation on
Afghanistan. We have little to no progress to report
regarding Georgia. The Russians are testing the Obama
Administration to see if it will compromise; it will not.
Lyrvall commented that there have been no breakthroughs in
EU-Russia Partnership and Cooperation Agreement (PCA)
negotiations, and noted that the Russians see the EU's

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Eastern Partnership initiative through a zero-sum lens; if it
encourages closer EU ties with six former-Soviet states, it
must be anti-Russia. Lucini recommended engaging Russia in
the Eastern Partnership through cooperation on concrete
projects. Helga Schmid praised the OSCE Ministerial in Corfu
for its emphasis on the indivisibility of Euro-Atlantic
security.

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GEORGIA
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16. (C) Schmid commented that the Geneva process is useful
because it is the only venue which includes all parties to
the Georgia conflict. She encouraged the U.S. to press
Georgia to work with the Abkhaz; the Abkhaz have been
rebuffed in their overtures to the Georgians, and are left
with no option but to seek Russia's support. Kovanda
similarly urged outreach to the Abkhaz; they are looking for
some daylight with the Russians, and we should help. EU
negotiations on visa facilitation with Georgia are not going
well. Lucini said we need to let Georgians know we support
them without giving Saakashvili "a blank check."


17. (C) A/S Gordon said the Georgians have shown reasonable
restraint with protesters lately, marking a departure from
previous behavior. Vice President Biden's upcoming trip to
Georgia will emphasize the need to strengthen democratic
institutions. A/S Gordon inquired about potential U.S.
participation in the EU's Georgia monitoring mission. An
American contribution*either official USG or via NGOs--would
showcase our commitment, and could potentially deter future
Russian misbehavior. Schmid noted that U.S. participation
would also mean opening the mission to Turkey and Ukraine;
U.S. political support might be preferable. Cooper agreed
that it would be hard for the EU to resist Turkish
participation in the EU monitoring mission if the U.S.
participated, as Turkey is an EU candidate country. Turkish
participation would not necessarily be a bad thing, but it
would "need some thinking about."

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BELARUS
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18. (C) Schmid said the Belarusians are under huge pressure
from Russia to recognize Abkhazia and South Ossetia; the
Belarusian FM told her so personally at Corfu. Belarus is
bankrupt, and therefore vulnerable to Russian exploitation.
The EU is looking into possible European Bank for
Reconstruction and Development and IMF support, on the order
of two to three billion dollars. Schmid said "I don't like
Luka, but(" the Zeltser release was clearly intended as a
signal.

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EASTERN PARTNERSHIP
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19. (C) A/S Gordon said the U.S. understands this; we would
like to associate ourselves with the EU's Eastern Partnership
initiative. Lyrvall said an EU-Ukraine FTA is looking
increasingly unlikely due to Ukrainian squabbling; Moldova is
likewise "a mess." It is difficult to anchor those countries
into the European integration process. On Armenia, A/S
Gordon said that resolving Nagorno-Karabakh is the key to
unlocking Turkish-Armenian relations, and consequently
regional energy supplies. The Russians have been reasonably
productive on this account, but it is unclear whether they
are just going through the motions or are seriously engaged,
particularly as a Nagorno-Karabakh solution would facilitate
a Southern Corridor gas route. Cooper asserted that if the
Russians really wanted to resolve Nagorno-Karabakh, they
would have done so already. On Ukraine, A/S Gordon asserted
that the U.S. does not want to unconditionally bail Ukraine
out of its economic troubles. We should let IFIs
(particularly the IMF) help Ukraine. The U.S. and EU need to
urge Ukraine's unwilling government to take difficult steps
in this regard.

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WESTERN BALKANS
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20. (C) Pointing to EU High Representative Solana/Vice
President Biden's and Swedish FM Bildt/Deputy Secretary
Steinberg's recent joint engagement in the Balkans, A/S
Gordon said the more high-level U.S.-EU cooperation we can
organize in the Balkans, the better. Lyrvall said that
Sweden wants to keep the EU's enlargement agenda moving

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during the Swedish Presidency. Montenegro's application is
with the Commission, and Macedonia may receive a relatively
positive EU progress assessment. Fairly or unfairly,
Macedonia may have to compromise on the name issue in order
to move forward on EU accession. In Serbia, implementation
of the interim agreement is "deadlocked," and Dutch FM
Verhagen's recent trip to Serbia is unlikely to assuage the
Netherlands' concerns.


21. (C) On Bosnia and Herzegovina, FM Bildt and Deputy
Secretary Steinberg planned to meet the following week to
discuss the Prud process. It is critical that BiH takes
ownership of the 5 2 process, Lyrvall said. The EU is
enthusiastic about a transition in BiH as long as the
conditions are met. There has to be recognition that the
EUSR mission would be less "intrusive"; rather, the EU would
present a "pull factor" for reform, he added. EU enlargement
policy has been a successful incentive for reform elsewhere
in the region. A significant shift in the Althea mission
should not take place until transition is secure on the
civilian side, Lyrvall concluded. Cooper said there might
come a point where we need to "force the issue" of state
property; if we do not resolve this before the autumn PIC,
then we'll lose two years because of the Bosnian elections.
Cooper added that after a "miserable" PIC, we should insist
on conditionality. BiH Croats have gotten the message from
Zagreb to be productive.


22. (C) A/S Gordon asked whether the Swedes might invite the
parties and the U.S. to Stockholm to resolve the state
property issue. The U.S. agrees that OHR is not doing well,
but we are reluctant to take away the crutch and make a leap
of faith. He recounted a side conversation with French
PolDir Gerard Araud, who said that if we wean the Bosnians
off of the "drug" of OHR, then the EU can be the "methadone."
Furthermore, to conduct a military transition at the same
time as the OHR/EU transition would send the wrong signal and
might invite problems. Lucini said EU member states are
talking to their militaries about the need to stay in BiH,
but militaries are pushing back. Lyrvall conceded the need
for "a comfort blanket."


23. (C) On Macedonia, A/S Gordon said the U.S. is still
letting UNSR Nimetz lead, and noted that Deputy Secretary
Steinberg has talked to the Greeks. While the Macedonians
need to "climb down" on issues such as naming their airport,
they have a reasonable case on other topics such as their
language, the name of their citizenship, etc. Some "climbing
down" is needed on both sides.


24. (C) On Serbia, A/S Gordon said that while we haven't
spoken to ICTY prosecutor Brammertz, the U.S. is trying to
provide further FBI and forensic assistance. The U.S. is
trying to determine what Serbian steps are required in order
to get the Dutch on board with Serbia's EU accession process.
What is the gap between "full Serbian cooperation" and what
the Serbs are currently doing, and how can it be filled?
Cooper said we are caught in a vicious circle with Brammertz,
who feels he cannot utter the words "full cooperation" but is
trying to indicate as much in other terms.


25. (C) On Kosovo, Lyrvall noted the sensitivities raised by
the fact that five EU member states do not recognize Kosovo's
independence. However, even these recalcitrant member states
would like to move forward with Kosovo's Euro-Atlantic
integration. Lyrvall noted the issue of visa liberalization
in the Balkans, and said the EU has leverage on the Serbs in
this regard. Cooper stated that we have had some small
successes in Kosovo and some failures. The Battle of Kosovo
Polje anniversary passed without incident, with the Serbian
royal family making some usefully anodyne speeches. But
decentralization in Kosovo will not succeed. Serbian
President Tadic has said that Serbia cannot call on Kosovo
Serbs to vote in Kosovo,s elections. EUSR for Kosovo Pieter
Feith thought we should think of 2011 as a deadline for
bringing the ICO process to an end: according to Feith, once
a state is up and running, the international community should
step back. The "six point" agenda is largely dead. A/S
Gordon relayed that Deputy Secretary Steinberg told Kosovo
leaders that their comments on UNMIK were not helpful.

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NON-PROLIFERATION
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26. (C) Lyrvall said that the EU was very encouraged by the
Obama Administration's approach on non-proliferation. A/S
Gordon said that the Administration is serious about the goal
of a world free of nuclear weapons, but realistic. If the
international community hopes to promote a Fissile Material

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Cut-off Treaty and create an international nuclear fuel bank,
we must back the IAEA with resources. The Administration
will try to get the Comprehensive Test Ban Treaty ratified;
the prospects for ratification are uncertain, but are better
now than before, in part due to improvements in scientific
modeling over the past ten years. Regarding START talks with
Russia, the Administration seeks a framework that permits
fewer weapons than the Moscow Treaty and that also includes
delivery vehicles and warheads. Both sides want an
agreement, but ratification is always a question. Raising
Iran, Cooper pointed out that a nuclear-armed Iran would
"blow the NPT out of the water." If we allow Iran to develop
the bomb, how can we credibly say "no" to the Egyptians and
the Saudis?


27. (U) Assistant Secretary Gordon has cleared this cable.
KIRKCONNELL