Identifier
Created
Classification
Origin
10PRAGUE86
2010-02-16 10:30:00
CONFIDENTIAL
Embassy Prague
Cable title:  

DAS QUANRUD'S FEBRUARY 9 PRAGUE VISIT

Tags:  AF ENRG EPET EZ IR MARR PREL RS UP 
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PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHPG #0086/01 0471030
ZNY CCCCC ZZH
P 161030Z FEB 10
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC PRIORITY 2146
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 03 PRAGUE 000086 

SIPDIS

E.O. 12958: DECL: 02/16/2020
TAGS: PREL, ENRG, EPET, MARR, AF, IR, RS, EZ, UP
SUBJECT: DAS QUANRUD'S FEBRUARY 9 PRAGUE VISIT

Classified By: Deputy Assistant Secretary Pamela Quanrud, reasons 1.4 (
b) and (d).

C O N F I D E N T I A L SECTION 01 OF 03 PRAGUE 000086

SIPDIS

E.O. 12958: DECL: 02/16/2020
TAGS: PREL, ENRG, EPET, MARR, AF, IR, RS, EZ, UP
SUBJECT: DAS QUANRUD'S FEBRUARY 9 PRAGUE VISIT

Classified By: Deputy Assistant Secretary Pamela Quanrud, reasons 1.4 (
b) and (d).

1. (C) Summary: During February 9 meetings with a variety
of Czech government, media and think-tank interlocutors, DAS
Quanrud explained that principled pragmatism was the heart
of the U.S. "reset" with Russia, and pushed back on Czech
assertions that the U.S. had sacrificed European security for
better relations with Russia. Quanrud detailed the overall
scope and timeline of the missile defense Phased Adaptive
Approach (PAA); some of those who had favored the
previously-proposed radar site now seem more comfortable with
PAA. Across the board, Czechs with whom Quanrud met
expressed concern about developments in Iran's nuclear
program. Government officials reiterated support for moving
ahead with sanctions on Iran and advised that the U.S. pave
the way for transatlantic cooperation by sending a high-level
official to brief the EU's Political and Security Council
(PSC) ambassadors on U.S. thinking on sanctions. MFA Energy
Envoy Vaclav Bartuska said that the Czech Republic's tender
for up to five nuclear reactors, for which Westinghouse is
competing, is an issue "bigger than the radar" and will
define the country for decades. Both he and Senator Alexandr
Vondra told Quanrud that Westinghouse needed to be more
active and do a better job of explaining its advantages. End
Summary.

2. (U) During a February 9 visit to Prague, DAS Pamela
Quanrud met with MFA officials, including Political Director
Ivo Sramek and Energy Envoy Vaclav Bartuska, MoD Deputy
Defense Policy Director Libor Boleslav, Social Democrat Party
(CSSD) shadow FM Lubomir Zaoralek, Senator (and former DPM)
Alexandr Vondra),and a small group of media and think tank
representatives.

Westinghouse Bid
--------------

3. (C) (C) Czech MFA Energy Envoy Bartuska called the
nuclear tender "bigger than the radar." It is a choice of
which civilization the Czech Republic wants to be a part of
and that choice will define the country for decades. He said
he is completely neutral between Westinghouse and Areva and
will not lobby for any one firm. He is lobbying, however,
against the Russian AtomStroyExport on security grounds. He
/>expected the Russians to have a significantly lower bid than
the others. AtomStroyExport will also be supported by a
number of Czech firms that will tell the government that they
will go bankrupt unless the Russian firm gets the contract.
In a separate meeting, Senator (and former DPM) Alexandr
Vondra claimed that among influential politicians, only
former PM Topolanek and CEZ head Martin Roman support the
Westinghouse bid and urged Westinghouse to be more active.
Challenged on the assertion that Roman really supported
Westinghouse, Vondra replied, "Well, maybe he was just saying
this because he knew he was talking to Vondra, but that's
what he told me."

4. (C) Bartuska suggested that to counter AtomStroyExport
Westinghouse needs to highlight its advantages, such as lower
operating costs -- a significant factor given that the
reactors are expected to be in operation 60 years. Also if
Czech firms want to participate in the global nuclear
renaissance they need to partner with a Western firm that is
on the cutting edge of technology. Partnering with
AtomStroyExport will limit their participation to projects in
the former Soviet space. Partnering with Westinghouse or
Areva would give Czech suppliers the opportunity to
participate in the global nuclear renaissance. In any case,
Bartuska added, for the tender to make sense, Czech companies
must become part of the winning firm,s supply chain. This is
another area where Westinghouse excels.

Energy Security
--------------

5. (C) Bartuska claimed that most of the roughly 3.5 billion
Euro approved by the EU for energy projects as part of the
European Economic Recovery Plan (EERP) went to Western Europe
as the newer member states were unprepared to take advantage
of the program. Older member states had specific
well-developed draft proposals while newer members projects
were generally still in the early planning stages. Thus the
sixth French-Belgium gas interconnector got funded while the
much more critically needed Bulgaria-Greece interconnector
did not. Bartuska noted that the V-4 had agreed last year
that a key priority should be LNG terminals in Poland with a
north-south link connecting Poland with the Czech Republic,
Slovakia, Hungary and Croatia. Since no one, however, was
willing to oversee the project and do the hard work, nothing
had happened.


PRAGUE 00000086 002 OF 003


6. (C) Bartuska continued that PM Fischer would be attending
the February 24 Budapest Energy Summit and added that there
were two things that united all the countries in the region:
the need to learn how to get more EU money, and the need to
discuss with new Energy Commissioner Oettinger (assuming he
attends) the form of the new annual EU instrument to fund
energy projects which will replace the EERP. Bartuska
reported that at the Summit the Czechs would again push for a
north-south gas link and propose discussion of how to find
alternative sources of oil to replace those currently
received through the Druzhba pipeline. The Czechs get two
thirds of their oil from the Druzhba, but Bartuska expects
oil from this source to dry out as Russia re-routes supplies
to its newer more modern pipelines. He noted that for Russia
Druzhba has become "just a minor asset that delivers oil to
not very important countries."

7. (C) Bartuska noted that Germany paid less and the Slovaks
paid more for Russian gas than the Czechs did and agreed that
transparency and a unified price at the EU border made sense.
The Czech EU Presidency and the European Commission had
tried to conduct a survey on how much the companies in each
country were paying for Russian gas but were told this was
none of their business. The private companies kept this
information confidential and the state did not have the power
to force them to talk. For 20 years the former Soviet
countries have been demolishing the state seeing it as evil.
While the U.S. might have the power to require this
information on security grounds, the new member states feel
they do not. Only Poland seemed to understand that a strong
state is needed to ensure security and this was probably
because the Poles felt the most threatened. Bartuska
suggested that rather than trying to push the policy of
transparency and a unified price through the member states,
it was better to try to work through DG Enterprise.

8. (C) Bartuska also reiterated the Czech Republic,s strong
support for the Southern Corridor but noted that this
depended on Turkey. He noted that Russia is a bit paranoid
regarding Europe and refuses to believe that when it comes to
a unified energy policy Europe is "so helpless." On Ukraine,
he noted that Yanukovich understands that is better to be
"President of an independent Ukraine than Governor of the
Kievsky Oblast."

Russia
--------------

9. (C) DAS Quanrud emphasized that the "reset" with Russia
was a principled pragmatic approach, focused on areas where
we thought cooperation was possible, including Afghanistan,
Iran and START. Both MFA Political Director Sramek and
Senator Alexandr Vondra commented on what they perceived as
Russian domination of the February 5-7 Munich Security
Conference. Sramek speculated that much of this was a
reaction to Secretary Clinton's Paris speech.

10. (C) MFA Security Policy Director Ivan Pocuch expressed
concern that Russia believed the U.S. had "conceded" by
agreeing to the Phased Adaptive Approach (PAA) to missile
defense. He asked whether the U.S. had a "timeline" or
benchmarks for judging whether USG engagement with Russia is
working. Quanrud said PAA was not a "concession" to Russia;
it was a response to current missile threats. With Russia,
the U.S. seeks concrete successes on appropriate timelines.
For instance, the goal with the START talks was not agreement
for agreement,s sake by a set deadline, but rather a good
agreement for both sides.


11. (C) Senator (and former DPM) Alexandr Vondra said Russia
had been boosted by what it perceived as its success in
Georgia. He personally was troubled by the fact that
President Obama had not made "even a single phone call" to
President Saakashvili. DAS Quanrud defended the USG record
of support for Georgia and argued that we that we also want
to see concrete efforts in Georgia to consolidate democracy
and a market economy and make the country an increasingly
attractive alternative to disaffected populations in South
Ossetia and Abkhazia.

Missile Defense/PAA
--------------

12. (C) DAS Quanrud explained the overall timeline for PAA
and how PAA would develop to eventually protect all of
Europe; Czech government interlocutors appeared more
comfortable with PAA. Pocuch called the U.S. offer to pay
for the PAA "generous"; Sramek called PAA "a good strategy."
MFA interlocutors did press, however, on what role the USG
envisioned for the Czech Republic. In this area Quanrud
noted that the PAA is evolving so not all roles are fully

PRAGUE 00000086 003 OF 003


defined as yet, but that at the current time we welcomed the
Czech participation in Shared Early Warning. MoD Defense
Policy Deputy Director Boleslav said he viewed PAA as part of
U.S. Article 5 commitments.

Afghanistan
--------------

13. (C) On Afghanistan, Defense Policy Deputy Director Libor
Boleslav said the Czech government was doing what it could.
Defense Minster Bartak was pressing for additional Czech
personnel in Afghanistan, but public support for Czech
involvement in Afghanistan was not as strong as he would
hope. DAS Quanrud noted Russian support on lethal transit and
other signs that Russia increasingly understood the danger of
an unstable Afghanistan and wanted ISAF to succeed.

Iran
--------------

14. (C) DAS Quanrud said that Iran's recent announcement
that it was advancing enrichment efforts to 20 percent was an
ominous step toward developing weapons-grade. Czech
government interlocutors reiterated support for U.S. efforts
on Iran. MFA Political Director Ivo Sramek reaffirmed Czech
support for "autonomous" U.S. and EU sanctions should he UNSC
route not produce satisfactory results. Sramek reiterated
his suggestion that a visit to the EU PSC by high-level U.S.
official to discuss concrete U.S. proposals on possible
sanctions would help the U.S. and EU reach consensus. MoD
Deputy Defense Policy Director Boleslav called developments
"a huge security concern" and said the Czech government would
"contribute what we can" to the effort to convince Iran to
rein in its nuclear program.

Eastern Partnership
--------------

15. (SBU) DAS Quanrud noted that USG officials will be
heading to Brussels at the end of February to meet with
European Commission officials to align and coordinate our
objectives and programs with the six nations included in the
EU,s Eastern Partnership. Ambassador Martin Kosatka
commented that the Czechs were very pleased to have the USG
join the recent discussions in Madrid on the Eastern
Partnership and that it would be very useful to have us
discuss alignment of concrete projects in Brussels. He also
noted that it would be important to keep the Spanish
involved, as they hold the EU presidency.

16. (U) DAS Quanrud has cleared this message.
Thompson-Jones