Identifier
Created
Classification
Origin
09UNVIEVIENNA491
2009-10-29 15:24:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
UNVIE
Cable title:  

OPPONENTS TO IAEA 2011 BUDGET GROWTH MOBILIZING

Tags:  AORC PREL KNNP IAEA UN 
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DE RUEHUNV #0491/01 3021524
ZNR UUUUU ZZH
O 291524Z OCT 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0238
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHEBAAA/DOE WASHDC PRIORITY
RUEANFA/NRC WASHDC PRIORITY
UNCLAS UNVIE VIENNA 000491 

SENSITIVE
SIPDIS

IO FOR ANDERSON; ISN FOR JENKINS; DOE FOR NA-24, NA-25,
NA-21; NSC FOR SCHEINMAN, HOLGATE, CONNERY; NRC FOR DOANE,
SCHWARTZMAN

E.O. 12958: N/A
TAGS: AORC PREL KNNP IAEA UN
SUBJECT: OPPONENTS TO IAEA 2011 BUDGET GROWTH MOBILIZING

REF: UNVIE 368

UNCLAS UNVIE VIENNA 000491

SENSITIVE
SIPDIS

IO FOR ANDERSON; ISN FOR JENKINS; DOE FOR NA-24, NA-25,
NA-21; NSC FOR SCHEINMAN, HOLGATE, CONNERY; NRC FOR DOANE,
SCHWARTZMAN

E.O. 12958: N/A
TAGS: AORC PREL KNNP IAEA UN
SUBJECT: OPPONENTS TO IAEA 2011 BUDGET GROWTH MOBILIZING

REF: UNVIE 368


1. (SBU) SUMMARY: In a speech October 21 at the U.S.
Institute for Peace, Secretary Clinton implied USG support
for a further increase in the IAEA's budget and authorities.
Formal negotiations among Member States to determine the 2011
level will not begin until later this winter, but the UK and
other zero growth hawks have already warned Mission that they
do not welcome another increase. (Budget negotiations
earlier this year resulted in a moderate increase of 5.4
percent for 2010; the increase was a coup for the U.S. and
was achieved over the objections of our closest allies.) The
point of departure for negotiations over the 2011 level is
unclear; much will depend on the expressed desires of Member
States and the inclinations of incoming Director General
Yukiya Amano. Finnish Ambassador and Budget Group Chair has
expressed a strong preference for a more member-driven
process. For these reasons, Mission urges Washington's early
consideration of the budget issue, with the goal of
determining a firm, top-line position by the end of December.
Once clear about our goal, USG should take advantage of the
April Nuclear Security Summit, May NPT RevCon and ongoing
meetings of the G8 Non-Proliferation Directors Group to
highlight the importance of resourcing the IAEA. Securing an
increase in the 2011 budget is not outside the realm of
possibility, but our allies are already cementing their
positions in favor of zero growth. Bringing them around to a
more flexible position requires thoughtful argumentation and
early, frequent, and high-level action. END SUMMARY.


2. (SBU) Public statements by the U.S. Administration over
the past year clearly affirm the importance of the IAEA's
mission and the need to transcend the zero-real-growth policy
applied across the UN system. This policy approach was
implemented on the ground in Vienna, leading to Member State
approval of an increase in the IAEA's 2010 budget.
Unfortunately, the hard-won, real increase of 2.7 percent
(5.4 percent nominal, with price adjustment) isolated the
U.S. from our traditional allies and created a schism among
major donors that diverted friend and foe alike from priority

issues such as Iran, Syria and North Korea. The budget
controversy also meant that Member States failed to come to a
strong consensus on indicative figures for the second half of
the two-year biennium (i.e., 2011). Instead, the 2009
General Conference approved the Regular Budget (RB) for 2010,
per its statutory duty, but labeled the 2011 figures
"preliminary" and "subject to the outcome of deliberations..."


3. (SBU) The 2011 "preliminary" figures envision an 11.4
percent real increase (approximately 14 percent nominal, with
price adjustment). While these figures would fund the Agency
in 2011 below the level recommended by DG ElBaradei in his
February 2009 proposal for the biennium 2010-11, they still
project significant growth and, thereby, run contrary to the
desires of the mostly European "budget hawks" (UK, France,
Germany, Italy, Switzerland, et. al.). France and Germany
are the least flexible, having adopted positions that are not
only fiscally conservative, but incorporate a
near-philosophical rejection of additional resources for
technical cooperation activities. Mexico, a "swing state"
between the OECD and G-77, was recently described by a
Secretariat observer as "militantly zero growth." Canada is
similarly entrenched, stemming from a much-publicized
position of zero growth for international organizations.
Mission suspects that the budget hawks are silently supported
by a minority of middle-income, G-77 countries, such as South
Africa, Brazil and Argentina. (Note: This silent split in
the G-77 renders the larger group useless to the U.S. in
budget negotiations. Even if the majority of G-77 Members
support an increase - as is likely the case - they refuse to
break G-77 solidarity by vocalizing their opinion. End
Note.)


4. (SBU) In reftel para 5, commenting on the Board's
recommendation for the 2010 budget, we noted the unresolved
capital requirements of the IAEA's safeguards lab and that
"Member States are depending on re-engaging in budget
negotiations after a short hiatus." Indeed, shortly after
this year's General Conference, European diplomats began
gingerly approaching us about the 2011 budget. The questions
foremost in their minds were: "Will the U.S. support the 2011
preliminary overall increase of 11.4 percent? If not, would
the U.S. support any real increase in the IAEA budget?"
Spanish Counselor Jose Luis de Guzman pointedly reminded
MsnOff that the 2011 numbers were "merely preliminary."
Spain's approach typifies similar overtures in the past month
from the missions of Switzerland, Germany, Canada and Italy.


5. (SBU) The IAEA Secretariat is reportedly in some disarray
over how to present the 2011 budget at the informal meeting
of the Program and Budget Committee in February. One option
would be simply to leave the preliminary figure of an 11.4
increase as they are and present nothing new. Another option
would be to drop the 2011 preliminary figures and propose new
figures that are more realistic and closer to zero growth.
The final decision will fall to incoming Director General
Amano, who takes the reins December 1. (COMMENT: Amano's
desire to avoid an early confrontation with the Europeans and
take into account Japan's own fiscal constraints may compel
him to retreat from advocating a double-digit percentage
increase. On the other hand, Amano floated with USG
officials - in several encounters on the margins of the
General Conference - the ambitious idea of marshalling new
resources for worldwide nuclear security activities through a
G-8 appeal modeled on the 2002 "10 Plus 10 Over 10" campaign
and Global Partnership for cooperative threat reduction. END
COMMENT.).

UK: DISPARITY BETWEEN POLICY AND PURSE?
--------------


6. (SBU) In Vienna, UK representatives have been the most
forthcoming about discussing their likely zero growth
position for 2011. Former UK Deputy Head of Mission Tim
Andrews, currently seconded to the IAEA's Office of Nuclear
Security, noted UK general elections will take place on or
before June 3, but that both major parties had already staked
out zero growth positions for international organizations.
First Secretary Creena Lavery echoed this view, warning
MsnOff that the U.S. had behaved prematurely and unilaterally
in its drive for a budget increase last year. Lavery
counseled the U.S. to take a conservative approach to the
budget that would maintain "Geneva Group solidarity" in order
to 1) maintain a solid front in the face of thorny Middle
East issues, 2) ensure smooth relations in the run-up to the
May NPT Review Conference, and 3) support incoming IAEA
Director General Amano. Lavery felt the U.S. could do little
to loosen the UK's zero growth position, though she admitted
the April 12-13 Nuclear Security Summit in Washington would
be an opportunity for nudging the UK away from zero growth.


7. (SBU) Away from Vienna, calls for robustly resourcing the
IAEA have come from the highest levels in the UK and seem to
be at odds with the fiscal conservatism our contacts here
represent to us. PM Brown's July 2009 report to Parliament
entitled "The Road to 2010; Addressing the Nuclear Question
in the Twenty-First Century" speaks boldly about nuclear
issues and dedicates an entire chapter to the IAEA. In this
report (http://www.cabinetoffice.gov.uk/
media/224864/roadto2010.pdf),PM Brown claims the UK is
"playing a leading role in tackling nuclear challenges" and
notes his desire to ensure that nuclear material does not
fall into the hands of terrorist groups or hostile states.
Chapter Six on "International Governance and the IAEA"
acknowledges the need for IAEA reform, but also calls for
strengthening of the safeguards regime. In a telling comment
(paragraph 6.3) that seems to contradict a zero growth budget
position, the Report states that the UK wants the IAEA "to
maintain and strengthen its position as the lynchpin of the
international community's efforts to ensure a safe and secure
nuclear future." Paragraph 6.11 states the belief that the
IAEA needs to be "properly resourced." Paragraph 6.15 calls
for an expansion of the Nuclear Security Program to ensure
that the IAEA has the funds and expertise to underpin its
activities. Paragraph 6.12 proposes that the UK host a
senior-level meeting of the Geneva Group of major donors to
"discuss future funding and staffing requirements of the
IAEA."


8. (SBU) In short, there seems to be ample UK political
declaration in support of a robust IAEA. This stance differs
fundamentally from the approach of France and Germany, two
large contributors that do not appear to have invested in the
IAEA at the political level. Unfortunately, we have not seen
the UK's political commitment translate into budgetary
flexibility in Vienna or high-level activism. (Lavery
confessed, for example, that there had been no movement on
the Report's proposal to hold a Geneva Group meeting of
senior officials from capitals.) The "Road to 2010" is
there, however, and should be used to pressure the UK into a
more flexible position. Regarding the Nuclear Security
Summit, Washington may even propose that the UK publicly
support a regular budget increase for the IAEA as their
Summit "house gift."

DECIDE EARLY AND LOBBY OFTEN
--------------


9. (SBU) COMMENT: The Secretary's remarks at the U.S.
Institute for Peace clearly indicate U.S. commitment to
adequate financing and an expanding mission for the IAEA. PM
Brown's report appears to mirror this commitment. Mission
admits to some alarm, however, at how quickly the UK and
other traditional allies in Vienna have moved to draw the
line at zero growth for 2011. Clearly, we will need to go
over the heads of local representatives if we expect London
and other capitals to "put their money where their mouths
are." Washington action to determine our own budget position
would enable Mission to keep Vienna expectations from
hardening around zero. Specifically, Mission advocates that
USG set its top-line position on the 2011 budget level as
soon as possible and fix specifics on the position by the
first week of January. (Mission will submit a formal
guidance request septel, but plants this seed now for
inter-agency consideration.) Further, the earlier the U.S.
determines its budget position, the sooner Washington can
begin incorporating this position into preparations for the
April Nuclear Security Summit, the May NPT RevCon, and
meetings of the G8 Non-Proliferation Directors Group. Though
it will take months of negotiations throughout 2010 to effect
even a moderate increase in the 2011 budget, early, emphatic
and high-level action will put us on the path toward
achieving the goal. END COMMENT.

DAVIES