US embassy cable - 04BRUSSELS87

UNCLAS SECTION 01 OF 03 BRUSSELS 000087 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR UNDERSECRETARY LARSON, EUR A/S JONES AND 
PDAS RIES, AND EUR/ERA 
 
E.O. 12958: N/A 
TAGS: PREL, PGOV, MARR, EFIN, ETRD, EAID, EI, EUN, USEU BRUSSELS 
SUBJECT: OUTLOOK FOR THE IRISH EU PRESIDENCY: KEEPING 
TRANSATLANTIC RELATIONS ON COURSE 
 
REF: 03 DUBLIN 1744 
 
SUMMARY 
------- 
 
1. (U) As our engagement with the Irish Presidency picks up 
momentum with next week's Task Force and Political Directors' 
meetings in Dublin, it is important to keep in mind the 
political and institutional changes that will buffet the EU 
during the next several months.  The Irish have a fuller 
plate of largely unwanted internal issues (IGC, Stability 
Pact) to lead on than they had planned (REFTEL), and both the 
European Parliament and the Commission are increasingly lame 
ducks.  A looming round of elections (including Greece, Spain 
and EU-wide for the EP) could also limit the EU's appetite 
and ability to focus on many new initiatives.  While the 
lengthy Task Force and PolDir agendas underscore the breadth 
of our transatlantic ties, it will be important to quickly 
sort out our most important priorities for concerted work 
between now and the June US-EU Summit.  Our short list would 
include: developing a joint approach to the Greater Middle 
East and sustaining EU support for reconstruction in 
Afghanistan and Iraq; keeping the ESDP-NATO relationship on 
an even keel as the EU prepares for a follow-on to SFOR in 
Bosnia; harnessing Ireland's self-proclaimed emphasis on 
sustainable development to develop broader cooperation with 
the EU on Africa; containing potential trade and economic 
strains caused by a strong euro, slow growth, and pending WTO 
actions; improving coordination on counterterrorism and 
homeland security measures; and pressing for a solution on 
Galileo.  One new initiative that could get some traction is 
exploring the possibilities for launching a Transatlantic 
Research Area.  END SUMMARY. 
 
2004 - A YEAR OF INSTITUTIONAL CHANGE IN THE EU 
--------------------------------------------- -- 
 
2. (U) Despite its professed emphasis on transatlantic ties, 
the Irish Presidency will be judged within the EU on two or 
three principal tasks -- whether or not it decides to attempt 
resolution of the EU's Constitutional Treaty debate; the 
selection of the next generation of EU leaders (President of 
the European Commission, High Representative for Foreign 
Policy, and Deputy Secretary General of the Council); and 
what might be done to pick up the pieces of the Stability and 
Growth Pact.  While the U.S. has interests in how all of 
these debates turn out, none will directly impact on the 
US-EU agenda for the semester. 
 
3. (U) At the same time, 2004 is a year of institutional 
turnover for the EU.  The Union will grow to 25, and the 
Council itself will officially incorporate the ten new Member 
States with full voting rights on May 1.  The European 
Parliament will end its term the first week of May.  Until 
then, the focus on trying to finish outstanding legislative 
work will be buffeted by pre-election posturing by all the 
major parties.  Parliament will then spend considerable time 
after the June elections organizing itself, choosing its 
leadership, and focusing on confirmation of a new Commission. 
 The Prodi Commission's term ends on October 31, and much of 
that body's legislative activity is already beginning to wind 
down.  The deal-making and horse-trading involved in 
composing a new Commission (with one Commissioner from each 
Member State) and divvying up portfolios, will go on all 
summer.   Looming over all of this (and potentially 
complicating the Constitutional debate in particular) will be 
the beginnings of the EU's battles over it's 2007-2013 budget 
framework, which will determine the broad outlines of the 
EU's spending priorities for that period. 
 
4. (SBU) Further, after something of a hiatus in 2003, 
electoral politics, beginning with Greece and Spain in the 
spring, and followed by June EP elections in all 25 Member 
States, will distract leaders from any initiatives needing 
high-level political attention and could impinge on effective 
EU decision-making. 
 
5. (SBU) All of the above means that the Irish, and the EU as 
a whole, are not seeking out opportunities to begin any other 
major initiatives during the coming six months.  But while 
the EU's internal calendar is full of distractions, there are 
a number of key events in the transatlantic calendar over the 
next six months where we will need to demonstrate progress on 
key issues.  These begin with the US-EU Ministerial on March 
1, and continue through to the G-8, NATO, and US-EU Summits, 
all in June.  Given the many distractions, it will be 
important to quickly whittle down the impressively long 
agendas for the Political Directors and NTA Task Force 
meetings to focus on a few key deliverables.  Our short list 
includes: 
COORDINATING ON THE GREATER MIDDLE EAST 
--------------------------------------- 
6. (SBU) At the working level the EU is in the throes of 
developing its thinking on a more comprehensive approach to 
the issues in the Middle East and the broader Muslim world. 
Certain Member States still cling to the Barcelona Process, 
but there is an emerging consensus that more must be done. 
We will begin a process of engagement on this next week with 
the visit of Alina Romanowski of NEA and, we hope, NEA DAS 
Satterfield soon thereafter.  Ideally, we should follow these 
up with Policy Planning talks in February as promised by the 
Secretary last fall, with the goal of both influencing the EU 
 
SIPDIS 
process as well as seeing what might be done together in the 
Summit context.  These efforts will also provide a context 
for our continuing work to sustain and deepen EU support for 
reconstruction in Afghanistan and Iraq. 
 
KEEPING ESDP ON AN EVEN KEEL 
---------------------------- 
 
7. (SBU) After a rough patch, ESDP developments have taken a 
more positive turn in the past months.  We believe the Irish 
are determined to, and capable of, keeping things headed in a 
good direction.  But important decisions will need to be 
worked on during the Irish (and Dutch) Presidencies.  Most 
important will be ensuring that planning for an EU follow-on 
mission to SFOR goes smoothly, an issue where the UK, as the 
EU's lead nation, should play the central role.  Other key 
developments will include work on setting up the EU Armaments 
Agency to meet the target date of end 2004, and 
implementation of the EU's paper on strengthening of planning 
capabilities including an EU cell at SHAPE and NATO liaison 
office at the EU Military Staff. 
 
BROADENING COOPERATION ON AFRICA 
----------------------------- 
 
8. (SBU)    The Irish have indicated they will make 
sustainable development a priority of their presidency, with 
a focus on Africa.  This provides opportunities for synergies 
with initiatives we are pursuing on the continent, including 
African peacekeeping, and HIV/AIDS. 
 
CONTAINING ECONOMIC AND TRADE TENSIONS 
-------------------------------------- 
 
9. (SBU) While the vast economic relationship has been an 
important stabilizer, managing U.S.-EU economic issues this 
year will continue to require high-level political attention. 
 With the depreciation of the dollar against the euro, 
macroecomic issues could become more contentious than they 
have been for over a decade.  Further appreciation of the 
euro could threaten the eurozone,s fragile economic 
recovery, prompting more strident European criticism of U.S. 
budget and current account deficits as the root cause of 
global imbalances. 
 
10. (SBU) Without the possibility of real progress on the 
Doha round, the trade agenda risks being dominated by an 
array of contentious disputes.  Our immediate focus should be 
on preventing the EU from retaliating on March 1 if Congress 
fails to act on a replacement for the FSC.  We need to work 
with the Irish Presidency to ensure the EU flexibly 
interprets its internal directive to retaliate. 
 
11. (SBU) Containing the potential damage from trade disputes 
would enable the EU and the United States to focus on the 
important areas where we can make progress on our 
&positive8 economic agenda.  These include liberalizing 
transatlantic aviation, deepening financial market 
integration, and strengthening the dialogue among ourregulatory agencies.  We 
also need to pay attention to 
discussion within the Transatlantic Business Dialogue (TABD) 
on building a business consensus on areas that we think can 
move ahead. 
 
INCREASING THE DIALOGUE ON CT AND HOMELAND SECURITY 
--------------------------------------------- ----- 
 
12. (SBU) Direct negotiations between Secretary Ridge and 
Internal Market Commissioner Bolkestein have largely resolved 
differences over airline passenger data and container 
security.  They have also built some trust between the U.S. 
and EU.   Nonetheless, we will continue to see U.S. action 
like recent decisions on placing air marshals on 
transatlantic flights that could generate intense opposition 
here absent careful groundwork and prior consultation.  In 
this context, exploration of launching a broader, more 
comprehensive dialogue on counterterrorism and homeland 
security concerns, which would bring in relevant Commission 
directorates, the Council and the Presidency to discuss 
issues like biometrics, exchange of watch lists, exchange of 
information on stolen passports, and border management, could 
smooth EU cooperation.  At the same time, we should be 
prepared for possible complications related to accession by 
ten new member states, who could use Commission mechanisms to 
challenge our differentiated treatment of EU nationals under 
the visa waiver program. 
 
RESOLVING GALILEO 
----------------- 
 
13. (SBU) The Europeans continue to negotiate assuming they 
must launch the first satellite by early 2005, and the EU 
position on Galileo is unlikely to change with the new 
Commission.  We have tabled a win/win scenario on frequency 
placement for the Open System, and it is important that we 
use the Summit deadline to drive this deal to closure. 
 
EXPLORING A TRANSATLANTIC RESEARCH AREA 
--------------------------------------- 
 
14. (U) Cooperation on science and technology tends to be an 
orphan in the US-EU relationship.  Yet better science is the 
key to resolving some of our most contentious disputes in the 
energy and environmental area.  The Department's Science 
Advisor has been laying the groundwork for a program of 
enhanced exchange between our universities and research 
centers.  Financial and intellectual property issues need to 
be worked out, but this is exactly the kind of new initiative 
that can capture the public imagination and provide some 
practical benefits. 
 
FOSTER