CZECH-AUSTRIAN RELATIONS: NEIGHBORLY DIFFERENCES

UNCLAS SECTION 01 OF 02 VIENNA 000070

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ENRG ECON PREL CZ AU
SUBJECT: CZECH-AUSTRIAN RELATIONS: NEIGHBORLY DIFFERENCES

REF: 09 VIENNA 173

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1. (U) This is a joint Embassy Vienna/Embassy Prague report.


2. (U) Summary: Twenty years after the collapse of the Iron Curtain,
commercial relations are strong but environmental and other concerns
have caused friction in the somewhat-testy Czech-Austrian
relationship. Czech PM Fischer's visit to Vienna in August 2009
provided a chance to overview Czech-Austrian relations, which show
two nations agreeing on general principles but often disagreeing on
their approach. Austria's nuclear-phobic public appears to be
unsuccessfully mounting a last-ditch effort to halt the Czech
Temelin nuclear reactor expansion. The Brno-Vienna Highway has
foundered on environmental issues on the Czech side. End summary.

Differences on Energy Policy
--------------


3. (U) Austrian Chancellor Faymann, after a meeting on August 24 in
Vienna with Czech PM Fischer, pronounced Czech-Austrian relations
"wide and full of trust," but acknowledged differences on the issue
of energy. While Austria views new gas pipelines such as Nabucco
and South Stream and the development of renewable energy as key to
its long-term energy security, the Czechs view the expansion of
nuclear energy as imperative, hoping to reduce their dependence on
Russian gas and oil (as well as dirty domestic coal).


4. (U) As a result, the majority state-owned Czech energy company
CEZ launched a public tender to install two additional nuclear
reactors at the Temelin Nuclear Power Plant, with an option to
install additional reactors elsewhere in Europe, including at the
Dukovany NPP. Both Temelin NPP (in southern Bohemia) and Dukovany
NPP(in southern Moravia) are near the Austrian border. Temelin's
critics in strongly anti-nuclear Austria assert that the plant is a
hazardous combination of Soviet-era engineering and Western safety
standards and technology. Austrian critics have also charged that
expanding Temelin will not enhance the Czech Republic's energy
independence, because the necessary nuclear fuel would most likely
come from Russia. Czech officials dismiss these claims and note
that while the Russian company TVEL currently supplies the nuclear
fuel for the existing Czech reactors, both the U.S. company
Westinghouse and French Areva (together with the Russian
AtomStroyExport) are competing for the tender for new reactors,
which will include fuel for the new units). Furthermore, the Czech
Republic still mines uranium (which has to be transformed into fuel
abroad, allegedly giving it more leverage in nuclear fuel
negotiations).


5. (U) A recent poll indicated that 71 percent of Czechs support
nuclear power, up from 56 percent four years ago. In contrast,
according to one poll 90 percent of Austrians oppose nuclear energy.
The Czech artist David Cerny mocked Austria's nuclear phobia in his
now-infamous "Entropa" sculpture, which depicted Austria as a green
region covered with nuclear reactors.


6. (SBU) After some unsuccessful attempts at negotiation, Austrian
national politicians have largely avoided confronting the Czechs on
Temelin, preferring to let local governments and NGOs take the lead.
These efforts received a setback in October 2009 when the European
Court of Justice ruled against a suit by the government of Upper
Austria seeking to close Temelin on the grounds that the plant's
proximity to the border posed a danger to the Austrian province.
Nonetheless, Austrian grassroots efforts, led by the Greens and the
NGO Atomstopp, continue unabated. Austrian anti-nuclear activists
have repeatedly blocked border crossings into the Czech Republic to
register their opposition to Temelin. The Austrian activists' best
hope to oppose nuclear energy may be the Czech Greens, who had used
their position within the Topolanek government to block nuclear
expansion. This obstacle, however, disappeared when the Topolanek
government fell in a vote of confidence in March. Hurt by an
internal split, the Czech Greens are polling well below the five
percent national vote needed to win parliament seats and generally
thought unlikely to return to parliament after elections in May.
All other Czech political parties support expanding nuclear power.



7. (U) Three energy firms active in the Czech Republic have
announced plans to build gas interconnectors between the two
countries and to connect the Czech Republic to the Austrian gas
grid. While it is unlikely that all three will be built, the
connection will further enhance Czech security of supply by creating
a third source for gas after Russia (via Ukraine) and Norway (via
Germany).

Brno-Vienna Highway
--------------


8. (U) Despite close economic ties, no major highway connects the
two neighbors, and given the legal problems with the Brno-Vienna
project, this is likely to remain true until at least mid-decade.
In January 2009 Czech Ambassador to Austria Jan Koukal and Austrian

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FM Spindelegger signed an agreement to link highways on both sides
of the border through the Czech border town of Mikulov. However,
controversy surrounding the environmental impact study resulted in
lawsuits by environmental groups, and the European Commission (EC)
withdrew its financial support pending a resolution of the court
battle. The EC expressed concern over the lack of a comparative
economic and ecological study that would assess alternatives routes,
in accordance with Czech and EU laws.

9. (U) In August 2009 Chancellor Faymann announced that the Austrian
part of the road leading up to the Czech border should be finished
by 2013. The Czechs and Austrians have pledged to continue the work
since the GoA has completed one-third of the project, but no
construction has begun on the Czech side. Czech PM Fischer promised
his Austrian counterpart that he would try to earmark funds for the
highway in the next budget, but that seems less likely given the
prospects of a record deficit of the Czech budget both this and next
year.
Sudeten German Restitution Concerns
--------------

10. (U) In October 2009 Faymann expressed his disapproval of Czech
President Klaus' demand to receive an exemption for the Czech
Republic regarding the Charter of Fundamental Rights, a part of the
Lisbon Treaty. Klaus demanded (and received) the exemption because,
he maintained, the Charter could allow Germans and Hungarians
expelled from the Czech Republic after World War II to bypass Czech
courts and enforce their restitution claims at the European Court of
Justice. Although there is an active Sudeten German group in
Austria, there has been no indication that claims of restitution
were gaining momentum either in the courts or the media. (Note: The
Czech Embassy in Vienna recently sponsored two historical
exhibitions on the Sudetenland.)
Carbon Emissions
--------------


11. (U) After missing its Kyoto emissions targets by a wide margin,
Austria in October 2009 purchased 3.5 million additional carbon
emissions credits from the Czech Republic. (While the Czechs are
one of the largest polluter per capita within the EU, they are well
below their Kyoto targets, which were set based on 1990 levels -
i.e. before the Czech Communist-era industrial giants were
dismantled.) A Czech government official said in July that the
country expected to sell most of its 100 million tons of surplus
emissions rights this year to European Union governments and private
companies.
Comment: The Past Still Casts Shadow
--------------


12. (SBU) Twenty years after the collapse of the Iron Curtain,
economic and environmental "neighborly" concerns dominate
Czech-Austrian relations. In part, these concerns and sensitivity
relate to past history, particularly Austria's 400-year occupation
of Bohemia and the post-World War II settlement. This past history
affects the perceptions and attitudes on border issues. The
conflict over nuclear energy is fueled by both differing attitudes
about the risks of the technology, as well as different approaches
to relations with Russia.
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