US embassy cable - 04BRUSSELS4025

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 004025 
 
SIPDIS 
 
DEPT FOR E - U/S LARSON, EB, EUR/ERA, NEA/I 
PLEASE PASS USAID FOR PPC/DCO 
 
E.O. 12958: DECL: 09/21/2009 
TAGS: PREL, EAID, PGOV, MOPS, IZ, EUN, USEU BRUSSELS 
SUBJECT: EU FUNDING FOR IRAQ:  EB A/S WAYNE MEETING WITH 
COMMISSION OFFICIALS 
 
REF: BRUSSELS 3983 
 
Classified By: USEU POLOFF LEE LITZENBERGER; REASONS 1.4 (B,D) 
 
1.  (U) Action request:  See para 12 below. 
 
2.  (C)  Summary.  Commission Deputy DG Leigh told EB A/S 
Wayne on September 21 that the EC agreed that the goal for 
the upcoming Tokyo conference is to get more support from 
donors for Iraq.  To do this, Leigh said, Iraqi officials 
must present a strategy and their specific assistance needs 
rather than having the US take the lead.  France and Germany 
are considering making assistance offers in Tokyo, Leigh 
added, but it is essential that Arab countries also deliver. 
On election support, the EC is looking at how to monitor the 
election process from Amman, rather than provide direct 
observers in-country, due to the security situation.  The EC 
may also provide some additional funding out of its 
election/democracy funds.  In addition, the EC is looking to 
see if it can fund directly some components of a UN 
protection force, but the focus is on member states, who have 
so far offered 10 million euros.  Questions remain, though, 
on what the UN actually needs, whether any troops have been 
offered, and how funding will be transferred to troop 
suppliers.  A/S Wayne updated Leigh on the Forum for the 
Future meetings in New York; Leigh said the EC would 
participate and share information on its existing programs in 
the region, but he was not sure it could contribute funding 
to the initiative.  End Summary. 
 
Tokyo Donors' Conference 
------------ 
3.  (C)  On September 21 in Brussels, EB A/S Tony Wayne met 
with European Commission Deputy Director General Michael 
Leigh to discuss Iraq.  A/S Wayne briefed Leigh on US 
planning for the Tokyo meeting, informing him that the focus 
will be on showing Iraqi leadership and plans, accelerating 
disbursements, stock-taking of where donors stand on the 
pledges made one year ago at Madrid and hopefully adding some 
new offers of aid.  Leigh said the Commission remains 
engaged, as a Core Group member, and by having recently sent 
an exploratory mission to Iraq.  All 200 million euros of 
Commission funding for Iraq pledged at Madrid has been 
committed to the UN and WB trust funds, he said, and the EC 
is preparing to make a similar commitment for 2005. 
 
Let Iraq, not US, present needs 
----------------- 
4.  (C)  Leigh agreed the goal for Tokyo should be to get 
more support for Iraq, particularly from those countries that 
did not pledge at Madrid (i.e. France and Germany) and 
suggested that Iraqi officials be present to make their case 
directly.  For example, he suggested that rather than have 
the US explain its decision to switch priorities for 
assistance, which will open up gaps in other areas, Iraq 
should explain its development strategy and the needs that 
flow from it.  Leigh also said it would be important for Iraq 
to show that it has been tracking the assistance it has 
received from donors.  For its part, the EC is working with 
all EU member states, both to take stock of the assistance 
provided by those that pledged in Madrid, but also to work 
with the French, Germans and others who Leigh said are 
considering announcing assistance at Tokyo.  In this regard, 
he said, it will be important for the UN and WB to evaluate 
the effectiveness of the trust funds, and how they will be 
handled in the future. 
 
Will Arab countries pledge at Tokyo? 
------------ 
5.  (C) Leigh asked whether Saudi Arabia and other Arab 
countries would be announcing assistance at Tokyo.  A/S Wayne 
briefed him on Iraqi-Jordanian discussions about possibly 
Jordan offering to host the next reconstruction fund meeting. 
 (On this latter point, Leigh said his understanding is that 
Japan is not seeking to transfer chairmanship to another 
donor following the Tokyo meeting, but instead was keen to 
identify a new host.)  Wayne noted that he would be meeting 
GCC officials next week in Washington and would press the 
Saudis and others on the need to announce assistance to Iraq 
in Tokyo.  Leigh reiterated the importance of having the Arab 
states deliver in Tokyo. 
 
Elections:  Remote Monitoring, not Direct Observation 
-------------------- 
6.  (C)  Leigh and his staff explained that the EU's recent 
exploratory mission returned from Iraq having concluded that 
the security situation precluded the EC from mounting a 
classical election observation mission.  Even the MNF had 
said it could not provide security for large numbers of EU 
observers dispersed around the country.  For its part, the UN 
reportedly told the EC in clear terms that observation would 
not be possible for the January elections; perhaps for future 
rounds, but not now.  The EC now plans to send an experts 
mission in early October to Amman to look at alternatives to 
direct election observation.  They will meet with the Iraqi 
election commission and other officials to determine how the 
EC can monitor the election process from Amman. 
 
7.  (C)  Leigh said the EC was also looking at ways to 
respond to the UN's election appeal, and had identified 
potential funds for both 2004 and 2005.  In addition, the EC 
was thinking about placing election experts on the UN's 
election team.  Leigh noted that Iraqi PM Alawi had been 
invited to the November 5 EU Summit, and this was a logical 
time to announce EU election support. 
 
UN Protection Force 
-------------- 
8.  (C)  Leigh's staff explained that under strong pressure 
from member states the Commission continues to explore legal 
ways to fund some part of the UN protection force directly, 
although this is problematic.  EC officials will meet in New 
York with UN officials this week to explore the possibility 
of funding the "inner core" security band for the UN -- if 
this involves securing buildings and providing equipment, the 
Commission may be able to fund it.  Funding direct military 
operations is not possible. 
 
9.  (C) The focus therefore remains on member state 
contributions, but even here questions remain.  On funding 
needs, although the figure of $26 million seems agreed, the 
Dutch are telling the EC that in fact there is only a $10 
million gap, but it's not clear what the origin of this 
figure is.  Currently, Leigh said, EU member states have 
offered about 10 million euros (reftel), but the UN's exact 
needs still aren't clear.  In addition, the EC has heard that 
there aren't any troops available, even if the funding is 
found.  Finally, the funding mechanism to be used is not 
clear.  A/S Wayne agreed to check on these issues and provide 
updates to the EC based on our current understanding. 
 
Forum for the Future 
----------- 
10.  (C)  A/S Wayne briefed Leigh on US plans for the 
September 23-24 Forum for the Future meetings in New York, 
noting that they were preparatory events for a full Forum 
meeting later in the year.  A/S Wayne said we are very 
pleased that nineteen ministers and a good representation of 
civil society/private sector representatives were attending. 
He also noted that Secretary Snow would be hosting another 
preparatory meeting with Finance Ministers around the October 
2-3 Bank/Fund meetings.  Leigh said the EC will participate 
actively in New York and share information on the assistance 
it provides the region through its existing Barcelona 
process, and through the proposed new European Neighborhood 
Instrument that will be set up starting in 2007 (subject to 
Council and Parliamentary agreement), but noted he was not 
sure what the EC could contribute to the Forum directly. 
 
New EC Funding Mechanisms 
------------ 
11. (SBU)  Leigh explained that, as part of the preparations 
for the Commission's 2007-13 budget, the EC is streamlining 
its assistance.  Current funding mechanisms such as TACIS 
(Technical Assistance to the CIS), CARDS (Community 
Assistance for Reconstruction Development and Stabilization) 
and MEDA (which funds the EU's Barcelona Process with Middle 
East and North Africa) will disappear.  In lieu of the 
current fifty funding instruments, the Commission is 
proposing a streamlined four new funds.  The first, for the 
European Neighborhood Initiative, will cover EC assistance 
for the current Barcelona countries, Ukraine, Moldova, 
Belarus, the three Caucasus countries, and Russia.  This fund 
will include a new, unprecedented facility for cross-border 
programs between EU and neighboring states, e.g. Poland and 
Ukraine.  The second, for Enlargement, will cover the Western 
Balkans, Romania, Bulgaria and Turkey.  The third, for 
Economic Cooperation and Development, will apply to all of 
Asia (including Central Asia) and Latin America.  The fourth, 
a Stability Fund, will in fact be a reserve to meet emerging 
crises.  (The European Development Funds (EDF) for the 77 
Africa, Caribbean and Pacific countries joined to the EU 
under the Cotonou Agreement is currently off-budget, though 
the Commission has proposed bringing it on-budget as well.) 
 
Action Request 
-------------- 
12. (SBU) That Department advise USEU of latest status of UN 
funding requirement for a UN Protection Force in Iraq, list 
of potential troop-providing countries, and possible 
mechanisms for transfer of funds. 
13. (U) A/S Wayne cleared this message. 
SCHNABEL