TO RUSSIA WITH LOVE: PM ERDOGAN'S VISIT TO MOSCOW

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 000092 SIPDIS DEPARTMENT ALSO FOR EUR/SE E.O. 12958: DECL: 01/20/2020 TAGS: PREL TU RU SUBJECT: TO RUSSIA WITH LOVE: PM ERDOGAN'S VISIT TO MOSCOW REF: A. ANKARA 87 ¶B. MOSCOW 60 Classified By: POL Counselor Daniel O'Grady for reasons 1.4 (b,d) ¶1. (C) SUMMARY. Prime Minister Erdogan's January 12-13 visit to Moscow produced several key agreements, notably a joint statement committing both sides to continue talks on a nuclear power plant, with a nod from PM Erdogan that he would sign an intergovernmental agreement granting Russia the project if terms can be agreed. Erdogan also offered, again, to lift visa restrictions between the two countries, a proposal that PM Putin seemed to support although the Russian Embassy is dubious this will happen soon. Moscow rebuffed Erdogan's request that Russia pressure the Armenians on Nagorno-Karabakh, but this disagreement seemed to be taken in stride by both sides amid their resolve to expand the bilateral economic and political relationship. Both sides depict the Erdogan trip as a prelude to a major visit to Ankara by President Medvedev in May-June this year to inaugurate a "High Cooperation Council" based on the Germany-Russia model, with numerous cabinet members also present. END SUMMARY. ¶2. (C) Both the MFA and the Russian Embassy portray Prime Minister Erdogan's January 12-13 trip to Moscow as continuing their joint effort to build the bilateral relationship beyond its current focus on energy, and as a prelude to a major visit to Ankara by President Medvedev in the May-June timeframe. Ankara hopes the Medvedev visit will launch a "High Cooperation Council," first proposed by PM Putin but welcomed by the Turks. This council would be similar to the German-Russian model, the MFA said. PM Erdogan and President Medvedev would serve as co-chairs; both sides would have half of their cabinet ministers in attendance. ¶3. (C) Although the level of Russia-Turkey trade slumped by 40 percent in 2009 due to the global financial crisis (from a high of $38 billion in 2008),Russia still remains one of Turkey's most important trading partners, the MFA noted. Turkish construction inside Russia exceeds $30 billion. Turkish direct investment in Russia is $6 billion; Russian investment in Turkey is $4 billion. Some 2.6 million Russian tourists came to Turkey in 2009 (80 percent of them to Antalya),only a small decline from the 2.8 million who visited Turkey in 2008. Energy -------------- ¶4. (C) The main deliverables of PM Erdogan's January 12-13 visit focused on energy. These included a Joint Statement signed by Energy Minister Yildiz and Russian Deputy Prime Minister Sechin which commits both governments to proceed with the construction of Turkey's first nuclear power plant, according to the Russian Embassy's Artur Lyukmanov, who briefed us January 18. Technical consultations will take place as soon as possible to ensure that an actual agreement can be signed when President Medvedev comes to Turkey. Separately, MFA officials told us that the Joint Statement does not identify a specific project nor ensure construction by a Russian company. According to MFA DG for Economic Affairs Mithat Rende, however, PM Erdogan did indicate he would sign an inter-governmental agreement with Russia to build a nuclear power plant in Turkey if acceptable terms can be agreed. ¶5. (C) Lyukmanov told us the Turkish Government also agreed to allow Russia to use part of Turkey's Exclusive Economic Zone in the Black Sea for its South Stream project. Berris Ekinci, head of the MFA Energy Department, however, told us in regard to South Stream, nothing was agreed in Moscow beyond the provisions of the agreements signed in August 2009 when Putin visited Ankara. (Note: In August, Turkey gave Russia permission for a feasibility study and agreed to decide by November 2010 whether to issue a permit for construction of the pipeline through Turkey's exclusive economic zone. End note.) The Russian Embassy said it expects the feasibility study on technical and ecological aspects of the South Stream route, now 90 percent complete, to be presented by April to the governments of Russia, Turkey and Bulgaria. The goal is to ensure that construction of the pipeline begins before the end of 2010. The MFA's Eastern Europe Department head Gokhan Turan emphasized to us January 19 that Russia is not asking for any Turkish financial investment in South Stream. Lyukmanov, meanwhile, argued that while many see South Stream and Nabucco as competitive projects, Moscow's view is that both ultimately will be needed but Russia is prepared to launch South Stream right away while Nabucco still needs investment capital. ANKARA 00000092 002 OF 002 ¶6. (C) Lyukmanov said the Turkish side complained during the Erdogan visit that they are paying too high a price for their gas imports, and asked that this be lowered, but Moscow was able to show the Turks that they already are getting a lower price than Russia's other customers. The Turks seemed satisfied, he said. ¶7. (C) The two sides also agreed to launch a direct rail connection via special ferries that can carry railcars. This link is expected to be between Samsun and Novorosisk. The Turkish Government hopes to build a logistical center, which will include warehouses, in the Novorosisk area. Erdogan's visit also saw an agreement on plant quarantines that will ease agricultural trade in both directions. Visas -------------- ¶8. (C) Although Turkey reintroduced its proposal to lift all visa requirements between the two countries, the Russian Embassy appeared dubious this would happen soon. Turkey has been making this offer over the past decade, but Russian security services have not welcomed the prospect, Lyukmanov said. The Turkish MFA was much more upbeat, pointing out that PM Putin and President Medvedev have both given their public support. The two countries do not have reciprocity now: Russians can obtain Turkish visas upon entry; Turkish citizens must get their Russian visas in advance. Nagorno-Karabakh -------------- ¶9. (C) Discussion of regional issues during the Erdogan visit included a significant disagreement on Nagorno-Karabakh, although Lyukmanov emphasized that Moscow is determined "not to make bilateral relations hostage to regional developments." Erdogan called on Russia to play an increased role in N-K and to put pressure on the Armenians. Lyukmanov said Moscow declined, stating that both parties to the N-K conflict need to increase their confidence in each other, that the joint position of the Minsk Group is not to judge the parties, and that there can be no connection between progress on N-K and Turkey-Armenia rapprochement. ¶10. (C) The MFA's Turan agreed that "these regional issues do not affect our bilateral relations," but argued that the political connection between N-K and the Turkey-Armenia Protocols is paramount for Ankara, particularly as parliamentary elections loom in Turkey. Turan also reported that the Russian side indicated that they would work on the Armenians to move things along in the Minski Group, but noted somewhat bluntly that he "cannot say how sincere they are." Comment -------------- ¶11. (C) The burgeoning Russia-Turkey relationship today stands in sharp contrast to a decade ago when the trade level was a mere $5-6 billion a year, and tensions over Chechnya were at fever pitch. Although the MFA contends that this relationship is merely the "northern dimension" of Turkey's current foreign policy, and is only "complementary" to the main direction of the policy which is to the west, Erdogan's government seems particularly enamored of Moscow -- not least, perhaps, because it provides a model for his own autocratic tendencies; and also because it nurtures a vision for Turkey's future that is less reliant on the dimming prospect of membership in the European Union. Jeffrey "Visit Ankara's Classified Web Site at http://www.intelink.s gov.gov/wiki/Portal:Turkey"