US-EU CONSULTS: POST- LISBON EU FINDING ITS

C O N F I D E N T I A L SECTION 01 OF 04 UNVIE VIENNA 000021

SIPDIS

DEPT FOR IO, ISN, EUR, IO/GS, IO/UNP, ISN/MNSA, IO/UNP,
EUR/ERA

E.O. 12958: DECL: 01/27/2020
TAGS: AORC PARM SNAR IAEA KNNP KTNBT UNCND EUN
SUBJECT: US-EU CONSULTS: POST- LISBON EU FINDING ITS
FOOTING IN VIENNA IOS

Classified By: Ambassador Glyn Davies for reasons 1.4 b and d

Summary
--------------


1. (SBU) The Spanish and EU Missions (Ambassadors Jose Luis
Rosello Serra and Lars-Erik Lundin, respectively) co-hosted
semiannual US-EU consultations on issues related to
Vienna-based international organizations January 22; these
were the first bilateral consultations held by the
amalgamated EU/Spanish Presidency in Vienna. Much of the
discussion focused on transitional arrangements under the
Spanish Presidency for EU representation in Vienna
organizations pursuant to entry into force of the Lisbon
Treaty. While the Spanish Presidency will retain overall
responsibility for external messaging, the EU Mission will
co-chair all meetings and EU Mission officers are "twinned"
with Spanish counterparts. During this transition, the EU is
seeking to sort out its observer status at the IAEA and CTBTO
and to coordinate with New York and Geneva as to
representation at UN agencies and bodies. At the IAEA as
elsewhere this presents some institutional and practical
difficulties. The EU circulated a note to all members on the
transitional arrangements and is under instructions to
operate on this basis until July 1. Beyond that date the EU
Mission is uninstructed, including with respect to the
Belgian Presidency in the second half of 2010, but projects
to add another Ambassador and 15 Vienna diplomats over time.


2. (C) On IAEA issues, the EU continues to be solid with
respect to Iran, and Spain shared our expectation (following
an IAEA DG meeting with FM Moratinos) that Director General
Amano will be factual in his assessment of safeguards
implementation in Iran. The EU and Spanish reps were much
less conversant on the Syria nuclear file in response to U.S.
concerns about "drift" on this issue. They were supportive
of a proposed June timetable for Board of Governors'
consideration of the IAEA fuel reserve but cautioned that
Amano may be reluctant to push the issue; the UK is also
looking to table its assurance of supply proposal at the
March Board. While the EU has no coordinated position on the
IAEA budget, they anticipated a substantial contribution to
the Safeguards Analytical Lab (SAL). The EU and Spanish reps
also shared our priorities on the Nuclear Security Summit.
However, they expressed pessimism as to the prospectsfor a
successful NPT Revcon absent resolution of the Middle East /
Israel conundrum, and feared that this issue could lay bare
internal EU divisions.


3. (SBU) The EU and Spanish reps expressed appreciation for
U.S. activism at the CTBT Prepcom and proposed coordination
of contributions to CTBTO. The EU expects the G-77 will be
aggressive at the June Prepcom on adoption of amendments to
the Rules of Procedure. The U.S. signaled that agreement on
the thorny issue of Palestinian Observership may be possible.
Responding favorably to our preview of Afghanistan and
Pakistan Regional Stabilization Strategy, the EU and Spanish
reps stressed the need for it to consider drugs and crime
strategically, particularly in the transnational and
transregional context. The EU reported that it supported
UNODC's Terrorism Prevention Branch (TPB) programs, and
announced it would be dedicating more funding, in general, to
counterterrorism programs, in Pakistan and Yemen. On finance
and governance, the EU promoted the need for the Independent
Evaluation Unit and whether to upgrade UNODC in the UN
system. The EU and Spanish representatives agreed with the
need to work closely together to avoid the appearance of
divisiveness on drug and crime issues, particularly at the
Crime and Narcotics Commissions meetings. The EU noted its
participation in the Vienna "Energy Club" and UNIDO's overall
role in energy issues. The U.S. and EU/Spanish reps agreed to
continue close consultations in advance of upcoming meetings
at Vienna organizations.End Summary.

Managing the Lisbon Transition
--------------


4. (SBU) Noting this was their first joint consultation, EU
Ambassador Lars-Erik Lundin and Spanish Ambassador Jose Luis
Rosello Serra, flanked by their respective staffs, walked us
through the transitional arrangements for EU representation
in Vienna pursuant to Lisbon Treaty implementation (The EU
delegation also circulated a nonpaper to EU members on the
arrangements agreed with the Spanish Presidency). While for
the time being the Spanish Presidency would remain
responsible for EU representation and coordination in Vienna,

UNVIE VIEN 00000021 002 OF 004


the EU and Spanish Ambassadors would co-chair all meetings
and integrate/"twin" their staffs, e.g. the EU DCM would
shadow the Spanish DCM. The intent, Serra explained, is to
prepare the EU Mission for the eventuality of "flying solo"
once the rotational EU Presidency is phased out in accordance
with the Lisbon Treaty. Lundin expected that this
eventuality would require the addition of a second EU
Ambassador, splitting the UN affairs and nonproliferation
portfolios, and a substantial augmentation of the EU Mission
staff to about 15 diplomats. The EU Mission will take
instruction from both the EU High Representative and the
Commission, he noted, for example on energy/nuclear issues.
Putting a team in place (i.e. recruitment) and raising the
profile of the EU Mission in Vienna were priorities for the
transition. In a further illustration of the EU and
Presidency division of labor, the nonpaper also proposes
"special effort" to increase the external visibility of the
EU delegation by hosting meetings with the heads of
international organizations while leaving the Spanish
Presidency in charge of political dialogue and outreach.


5. (C) Ambassador Davies questioned the practical effect on
U.S.-EU coordination of the "twinned" EU-Spanish Presidency,
citing the positive example of his own close coordination
with Swedish Ambassador Lundberg on Middle East issues at the
2009 IAEA General Conference during the Swedish Presidency --
in practice, who would will our interlocutor now be? Serra
acknowledged how Lundberg had leveraged U.S.-EU coordination
to derive a common position among EU members on Middle East
issues during the GC. He noted that the U.S. position
counted more than that of Brussels in this regard, and
anticipated that he would do the same when presiding, i.e.
use the U.S. position or strategy on an issue to settle
internal EU disagreements (Comment: During the last GC,
Spain was one of the EU countries seeking accommodation of
Arab group positions but the Spanish Mission in Vienna has
toughened on these issues in recent months. End comment).
During the Spanish Presidency, Serra pledged that the EU
delegation and Presidency would seek to appear "as one" but
by the time of the General Conference, the EU delegation
should be "in command." He added that Spain was conducting
outreach on Middle East issues with Egyptian Ambassador
Fawzi. Landin said he would ask Brussels for guidance on the
question. Ambassador Davies underlined the importance of the
U.S.-EU relationship and looked forward to continued
coordination in IAEA fora and the NPT Revcon.

Challenges Ahead
--------------


6. (C) The EU Mission had no instructions as to what would
happen at the conclusion of the Spanish Presidency June 30.
Landin underscored that the EU would not "take any risks" in
its institutional transition, including with respect to the
incoming Presidency, and fully expected the Belgian
Presidency to be helpful with respect to Lisbon Treaty
implementation. (Comment: Separately, the Belgians have
approached the UN Affairs Section at the Mission for
consultations and expect to be an "activist" Presidency,
somewhat contradicting the impression Landin gave at the
lunch. End Comment.)


7. (SBU) Sorting out EU representation in UN and other
international organizations posed a real challenge, Serra
advised, requiring a re-examination of by-laws. The
transition nonpaper specifies that priority should be given
to the IAEA, where Euratom (represented by the EU delegation)
has observer status, and CTBT where the EU lacks any observer
status, and notes that EU representation at other UN bodies
and specialized agencies must be coordinated with New York
and Geneva. Serra cited the example of the IAEA Board of
Governors where the EU Presidency currently delivers the EU
statement at the opening of the Board debate on a particular
agenda item. For the time being, Spain would retain the
coordination role on EU Board statements (e.g. on Iran, Syria
etc.) but with the EU delegation as very much part of the
"team." It was not clear, however, what would happen in the
future when the "EU speaks" since the EU cannot be a member
state of the IAEA Board -- would the EU take the floor as a
non-Board member under Rule 50 at the end of the debate?, he
mused. (Note: When non-Board member states have held the EU
Presidency, they delivered the EU statement at the opening of
the debate along with G-77, NAM and regional groups. End
note.)

IAEA and NPT Issues

UNVIE VIEN 00000021 003 OF 004


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8. (SBU) Looking ahead at the next six months, IAEA Counselor
presented U.S. priorities at the IAEA (March and June Board
meetings) as well as the Nuclear Security Summit and NPT
Revcon. The EU and Spanish reps expected broad convergence
of U.S. and EU positions at the IAEA. With respect to the
budget, there would not be a common EU position but the EU
was preparing to make a "substantial" contribution to help
fund the modernization of the Safeguards Analytical
Laboratory (SAL) and shared the U.S. view of this as a
priority. Landin asked whether an additional U.S.
contribution to SAL was forthcoming. Among the other
"headline" issues, Serra reported a recent EU demarche on DG
Amano on assurance of nuclear fuel supply. The EU had
advocated that there not be a Board working group this issue
so as to not give the G-77 the opportunity to block it.
Serra cautioned that Amano seemed "very reluctant" to take
the first step on assured supply/fuel banks and was inclined
to leave this issue to Member States and the Board Chair to
sort out. "We are not in safe waters," Serra concluded given
the lack of consensus on the Board and noted the need for
outreach. He also confirmed that the UK expected to put its
Nuclear Fuel Assurance proposal forward for consideration at
the March Board. Ambassador Davies took issue with the time
horizon DG Amano had in mind with respect to Board approval
of the IAEA fuel bank, considering that November to be too
far away. The EU and Spanish reps agreed with the June Board
timeframe proposed by the U.S. and while they hoped for less
confrontation on this issue, did not believe consensus
approval of the IAEA fuel bank was possible. They also noted
that the Secretariat was thinking in terms of a discussion of
the IAEA fuel bank in June followed by Board action in
September. Ambassador Davies solicited EU help in cleaving
off key G-77 states to increase support for the fuel bank.


9. (C) On Iran, the EU and Spanish reps underlined that the
EU was united and saw sanctions as inevitable. They awaited
Amano's first DG report on Iran. Serra reported that Amano
in an introductory call by Spanish FM Moratinos was factual
in his presentation of the Iran dossier but also very
cautious. Amano apparently told Moratinos that there had
been no formal reply by Iran on the Tehran Research Reactor
(TRR) deal when the media was reporting otherwise. Neither
the EU nor Spanish participants would be drawn out on Syria
even as IAEA Counselor warned that allowing the Syrian issue
to "drift" would undermine IAEA safeguards authorities. In
contrast, they fully shared our focus on nuclear security and
looked forward to the April Summit. The Spanish indicated
that EU coordination for the NPT Revcon would be the
responsibility of the Presidency. Both the EU and Spanish
reps were fairly pessimistic about the Revcon, Landin
assessing that the outcome would be "not too bad" or "very
bad" absent resolution of the Middle East issue. Mission
representatives underscored the need to address both sides of
the NPT bargain. EU and Spanish representsatives shared the
view that while the U.S. had a good story to tell on peaceful
use and disarmament, the Middle East issue could tip the
balance at the Revcon. They regretted that the Middle East
debate had contaminated everything else and feared that this
issue could expose EU internal differences.

CTBT
--------------


10. (SBU) On CTBT, the EU might seek formal observer status
at the June Prepcom. The EU and Spanish reps appreciated
U.S. activism at the Prepcom and proposed coordination of our
possible extrabudgetary contributions. They expected the
G-77 will aggressively push their amendments to the Rules of
Procedure at the Prepcom. Arms Control Counselor indicated
that agreement on Observership for the Palestinian Authority
is possible, though we had reservations on the amendments
pertaining to NGOs and non-signatory states. More broadly,
the EU and Spanish reps understood that the U.S. cannot move
forward on CTBT ratification unless certain of success, and
would continue to hold the line with the G-77 in the interim.

UN Organizations
--------------


11. (SBU) Turning to UN organizations, we previewed the
just-released Afghanistan and Pakistan Regional Stabilization
Strategy and stressed the need to develop synergy among the
various UN organizations in Vienna, focusing on drugs, crime,
corruption, border security, trafficking, and terrorism. The

UNVIE VIEN 00000021 004 OF 004


EU and Spanish representatives welcomed copies of the
counternarcotics portion of the strategy, stressing that the
EU wanted to take a strategic outlook in Vienna. The Spanish
representative also noted the nexus between UNODC and the
OSCE on border management issues and reported that the UNODC
would participate in the European security dialogue summit on
transnational threats. With regard to UNODC's
counterterrorism programs, the EU agreed that UNODC's
Terrorism Prevention Branch provided solid assistance.
Agreeing that TPB had real value-added with regard to the
promotion of international nuclear terrorism conventions, the
Spanish representative offered to organize a U.S.-EU meeting
with TPB head Ruthstrom-Ruin. The EU also reported that it
would be providing 15 million euros for legal capacity
building in Pakistan.


12. (SBU) The EU and Spanish representatives agreed that
efficient finance and governance within UNODC was critical to
ensure its continued effectiveness. The EU representative
stressed the importance of ensuring the Independent
Evaluation Unit becomes fully operational as soon as
possible, and the Spanish representative noted the need to
consider "upgrading" UNODC in the UN system. We stressed the
importance of working together in the UNODC context and
offered to host regular working-level Major Donors' meetings
in order to ensure that we, the EU, and other Major Donor
countries were communicating well and regularly in order to
minimize divisive public discussions. In this regard, we
stressed the need to work together closely in the run-up to
the March Commission on Narcotic Drugs (CND) in order to
avoid the heated public disagreements of 2009. The EU and
Spanish representatives welcomed these suggestions.

13. (SBU) With regard to UNIDO, the EU and Spanish
representatives stressed the effectiveness of UNIDO head
Yumkella and indicated its overall support for UNIDO
programs. Ambassador Davies noted he had met with Yumkella
and agreed with the EU's assessment of his abilities.
Ambassador Davies added that we were in the process of
learning more about UNIDO and its programs, but that any
discussions of the U.S. rejoining UNIDO would be well into
the future. The Spanish representative added that the EU was
a participant in the Vienna "energy club," which included
UNIDO, OSCE, OPEC, IAEA, IRENA, and IIASA (Note: Mission
will provide further information on the club septel End
note.)


14. (C) Comment: While the EU and Spanish reps put the best
face on internal coordination under the Spanish Presidency,
they spent more time explaining how this will all work than
in discussion of substantive issues at Vienna organizations.
During this time of transition, we expect the EU -Presidency
dynamic to continue to unfold as the EU seeks greater
institutional clarity vis-a-vis international organizations.
With a strong Spanish Mission and with a less complicated
Vienna meeting cycle in the first two quarters, the next six
months should go smoothly. The second half of 2010 will be
much more complicated as we head to the IAEA General
Conference where will be looking again for European
leadership to help manage the contentious Middle East issues.

DAVIES