DAS QUANRUD'S FEBRUARY 9 PRAGUE VISIT

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

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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.





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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



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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