US embassy cable - 04BRUSSELS4129

C O N F I D E N T I A L SECTION 01 OF 02 BRUSSELS 004129 
 
SIPDIS 
 
E.O. 12958: DECL: 09/24/2014 
TAGS: PREL, IZ, TU. CY, EUN, USEU BRUSSELS 
SUBJECT: EB A/S WAYNE'S MEETING WITH GERMAN EU PERM REP 
SCHOENFELDER 
 
 
Classified By: Rick Holtzapple, PolOff, Reasons 1.4 (B/D) 
 
SUMMARY 
------- 
 
1. (C) In a September 21 meeting with Assistant Secretary for 
Economic and Business Affairs Tony Wayne, German EU Permanent 
Representative Wilhelm Schoenfelder observed that Iraq 
continues to dominate US-EU relations.  While clearly in 
Europe's interest to contribute to stabilization, 
domestically in Germany it would cause "major problems" to 
get involved in-country.  On Cyprus, Schoenfelder said it has 
been "extremely difficult to get any signs of flexibility" 
from the Greek Cypriots.  He was optimistic an aid package 
could be approved, if no money is spent on "contested 
territory" or infrastructure on such land; but was less 
confident a trade package could be agreed.  On Turkey, unless 
penal code reform is completed, the Commission could only 
issue a "yes, if..." recommendation on opening accession 
negotiations.  Despite European public opposition, 
Schoenfelder argued the EU had already gone too far to say 
"no" -- the choices should only be between "yes" or "yes, 
if..."  Schoenfelder also shared his views on the EU's top 
priorities over the next year.  END SUMMARY. 
 
IRAQ 
---- 
 
2. (SBU) Schoenfelder opened the meeting by saying that the 
Iraq was still the dominant issue in transatlantic relations, 
especially with European public opinion. It was important to 
figure out how to change that.  He acknowledged that the 
transfer of sovereignty to the interim government was 
important in addressing this, but that there remained serious 
questions about when the Iraqis themselves could assume 
responsibility for security and US troops could start pulling 
out.  It was in everyone's interest to contribute to 
stabilizing Iraq, and Schoenfelder pointed to the EU 
financial contribution and German efforts on training Iraqis 
outside of Iraq.  But he added that it would cause "major 
problems" for the German government domestically to try and 
do any such activities within Iraq. 
 
CYPRUS 
------ 
 
3. (C) Schoenfelder recalled that he had been visited by a 
Turkish Cypriot delegation (including the agriculture 
minister and mayor of Nicosia) two weeks ago, and they had 
made a good impression.  He contrasted that with his 
experience in the EU Perm Reps' Committee (COREPER), where 
his Greek Cypriot colleague was being "extremely inflexible", 
clearly on instructions from Nicosia.  Schoenfelder 
reaffirmed the rest of the EU's desire to end the isolation 
of northern Cyprus, but admitted is was proving extremely 
difficult, since financial assistance must be unanimously 
agreed and legal arguments continued over whether trade 
measures would also require consensus.  The trade package 
remains the more difficult one.  Schoenfelder was optimistic 
that, if the two pieces were decoupled the aid package could 
be approved.  But he underlined that even these measures 
would be heavily constrained, as there was already agreement 
within the EU that this aid would not be spent on 
infrastructure projects in "contested territory"; and his 
understanding was that as much as 85 percent of northern 
Cyprus could fit in that category.  He also acknowledged that 
the Turkish Cypriots put more importance on the trade package 
than on the financial assistance. 
TURKEY 
------ 
 
4. (C) Schoenfelder said he understood the Commission's 
position was clear, if Turkey did not complete the reform of 
the penal code, then the best the Commission could do was to 
issue a "yes, if..." recommendation, which could well mean 
that the Commission would have to prepare a subsequent report 
assessing any such reforms before the Council could take a 
final decision on opening accession negotiations.  This would 
risk a delay in such a decision.  Schoenfelder also gave a 
rather negative assessment on the value of Turkish accession, 
arguing that from the EU point of view it would only cause 
great strains institutionally and on such policies as the 
Common Agricultural Policy (CAP) and regional funds, and from 
the German point of view it would only help stir up extreme 
right-wing politics.  Nonetheless, he said that the EU had 
"passed the point of no return" in 1999 in Helsinki when EU 
leaders declared Turkey a candidate country.  Turkey would 
not be satisfied with an offer of a "special relationship" 
with the EU.  So EU leaders could not simply say "no," the EU 
had already gone too far for that, and Turkey was much too 
important to treat that way.  While it would be a difficult 
decision, Schoenfelder felt the EU would have little choice 
but to say either "yes" or "yes, but..." on opening 
negotiations. (In subsequent discussions, Dutch and Polish 
officials reaffirmed their commitment to push ahead for a 
"yes" decision in December.) 
 
EU PRIORITIES FOR THE COMING YEAR 
--------------------------------- 
 
5. (SBU) Asked by A/S Wayne about key issues facing the new 
Commission, Schoenfelder replied that the most important 
issues facing the EU right now were not directly within the 
Commission's competence.  First was ratification of the EU 
Constitutional Treaty; "in two years we'll know if we can do 
it."  Second was agreement on the EU's Financial Perspective 
for 2007-2013.  He forecast very difficult negotiations. 
When A/S Wayne commented that this might present an 
opportunity for significant revision of the CAP, 
Schoenfelder's response was firm:  "nobody will touch" the 
agreement of October 2002 made by French President Chirac and 
German Chancellor Schroeder setting the terms of CAP spending 
for this period.  In areas more within the Commission's 
realm, Schoenfelder highlighted the Services Directive, 
financial markets liberalization, and conclusion of the Doha 
Round as top priorities. 
 
6. (U) A/S Wayne has cleared this cable. 
 
SCHNABEL