US embassy cable - 05BUCHAREST836

C O N F I D E N T I A L SECTION 01 OF 04 BUCHAREST 000836 
 
SIPDIS 
 
STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH 
 
E.O. 12958: DECL: 04/05/2015 
TAGS: PREL, PGOV, IZ, RO 
SUBJECT: THE DEPUTY SECRETARY'S MARCH 30 MEETING WITH 
ROMANIAN PRIME MINISTER CALIN POPESCU-TARICEANU 
 
Classified By: POLITICAL SECTION CHIEF ROBERT S. GILCHRIST FOR REASONS 
1.4 B AND D 
 
1. (C) Summary:  In his March 30 meeting in Bucharest with 
Deputy Secretary Zoellick, Romanian Prime Minister Calin 
Popescu-Tariceanu underscored the central importance the new 
Romanian government ascribes to strong bilateral relations 
with the U.S.  Tariceanu requested as much information 
sharing and coordination as possible on the kidnapping of 
three Romanian journalists and their American citizen guide 
in Baghdad.  He urged the U.S. to encourage Turkish 
participation in the development of a long-term Black Sea 
regional strategy and sought U.S. support for increased 
Romanian engagement on Moldova/Transnistria.  The Deputy 
Secretary encouraged Romanian progress towards resolving 
 
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outstanding international adoption cases, a more rapid effort 
to revoke an award given to an outspoken extremist 
politician, and care in making a final decision on proceeding 
with a major highway project undertaken by U.S. firm Bechtel 
so as to ensure the right signals are sent to potential U.S. 
investors and business partners.  The Deputy Secretary 
congratulated the GOR on economic growth and anticipated EU 
accession in 2007.  End Summary. 
 
2. (C) The Deputy Secretary began his March 30 meeting with 
PM Tariceanu by relating that he had traveled to European 
capitals to gain a sense of priorities in the region. He 
expressed strong appreciation for the important role Romania 
has played in Iraq and for the productive partnership we have 
developed with Romania as a new NATO ally. PM Tariceanu 
underscored the importance the new Romanian government 
ascribes to strong bilateral relations with the U.S.  He said 
he felt comfortable that relations were improving and noted 
Romanian President Traian Basescu's "delight" with the 
productive dialogue during his March 9-11 trip to Washington. 
 Tariceanu stated firmly that the U.S. can "count on Romania 
to fulfill its commitments." 
 
3. (C) At the same time, Tariceanu said the GOR was taking 
steps at home that it believed would make Romania an even 
more valuable partner.  This included aggressively fighting 
corruption and implementing a new strategy for reform of 
Romania's judiciary.  Such steps were also critical for 
meeting requirements for EU entry in 2007, addressing the 
concerns of the business community, and -- more fundamentally 
-- reassuring the Romanian public of the preeminence of the 
rule of law.  He singled out the implementation of a 16 
percent flat tax on personal income and corporate revenue as 
an important incentive for encouraging long-term investment 
from abroad.  The Deputy Secretary agreed that these are 
important undertakings that could only make our relationship 
stronger. 
 
Iraq and Romanian Hostages 
--------------------------- 
4. (C) The Deputy Secretary and PM Tariceanu discussed the 
March 28 kidnapping of three Romanian journalists and an 
accompanying American citizen in Iraq. The Deputy Secretary 
emphasized that the U.S. would provide information to the 
Romanian government as fast and efficiently as possible.  He 
underscored a commitment to do all we can to work with 
Romania on this difficult situation.  At the same time, he 
noted events can move quickly and expressed hope there would 
be freedom to act rapidly when and if opportunities present 
themselves to deal with the situation. 
 
5. (C) Tariceanu replied that the situation was complicated 
and requested as much information as possible from the U.S., 
thereby better permitting the GOR to make the difficult 
decisions as they arise, including the potential deployment 
of forces. He reiterated that he, President Basescu, and the 
entire security team were seized with the issue, suggesting 
that it was not clear that the motivation for the kidnapping 
was entirely political.  Tariceanu committed to ensure 
information flows both ways and to coordinating closely in 
Bucharest and Baghdad. 
 
6. (C) More broadly on Iraq, the Deputy Secretary noted that 
as the security situation becomes more stable, it is now 
incumbent on the international community to help the new 
Iraqi government address the economic and political issues 
that will, together with security steps, help to defeat the 
insurgency.  He recognized that Romania's capabilities for 
playing a role may be limited, but that its voice with other 
Europeans will be helpful. 
 
Romania's Regional Role 
----------------------- 
7. (C) Tariceanu then turned to Romania's interests in its 
own region, particularly the Black Sea Basin, which Romania 
views as critical for its security and economic well-being. 
He said Romania seeks a NATO presence in the Black Sea and 
would like to see an Active Endeavor-type operation carried 
out there at some point.  He said U.S. support would be 
important in helping convince Turkey of such an expanded role 
for NATO.  The Deputy Secretary noted that he had discussed 
the issue more extensively in an earlier one-on-one meeting 
with FM Ungureanu. He commended Ungureanu's proposal to focus 
initially on common environmental concerns as a practical way 
to engage Turkey and other littoral states.  A step-by-step 
approach would likely be the most effective in convincing 
Turkey of the value of more coordinated policies. 
 
8. (C) With regard to Moldova, Tariceanu emphasized that 
Romania continues a strategy of drawing Moldova westward.  He 
described Moldova and Romania as having a common historical, 
cultural, and linguistic heritage.  The end goal would be 
Moldovan membership in the EU such that the divisions between 
Moldova and Romania disappear.  The GOR is also planning a 
more active approach on Transnistria.  Although providing no 
specifics, Tariceanu expressed hope that the U.S. would 
support Romania in that effort. 
 
Romania and Europe 
------------------ 
9. (C) The Deputy Secretary said that EU accession will be a 
big boost for Romania but will also come with a heavy load of 
responsibilities.  One of the biggest challenges will be to 
ensure Romania gets benefits from participation in a large 
single market, but also does not become over-burdened by EU 
regulations and social-welfare structures of richer 
countries; these would crush economic development in Romania. 
 He pointed to Ireland as a good example of a EU member that 
took the right steps to bring in investment and create an 
environment for strong economic growth.  The Deputy Secretary 
encouraged Romania to bring its perspectives to both NATO 
and, later, EU councils, suggesting that these perspectives 
will be useful on regional issues (the Balkans, Moldova) as 
well as economic ones (regulations, etc.). 
 
10. (C) Tariceanu reiterated that EU accession in 2007 
remains a top priority for his government.  He marveled at 
what he characterized as retrograde ideas he had found in 
Paris and Berlin about the strong regulatory role of 
government.  He characterized himself as a true liberal at 
heart, in the economic sense of the word, and expressed hope 
that Romania could be a liberalizing force within the EU 
after accession. He expressed satisfaction that the Foreign 
Affairs Commission of the EU Parliament had just approved 
Romania's application for 2007 and Romania looked forward to 
signing its accession agreement in late April.  He noted that 
the government has much work ahead, including on justice and 
home affairs, corruption, and press freedom. 
 
The Economy, Investment, Bechtel 
-------------------------------- 
11. (C) The Deputy Secretary congratulated Tariceanu on the 
economic growth Romania continues to enjoy and other positive 
economic signs.  PM Tariceanu acknowledged that his 
government had broadly inherited a good economic situation, 
with 8 percent growth in 2004, and a projected 5.5 to 6 
percent growth in 2005.  At the same time, he noted, the 
current account deficit had increased and the government 
would have to be careful to prevent overheating.  He related 
that the IMF continues to emphasize the importance of 
reducing the deficit.  He lamented, however, that this does 
not take into consideration the importance of public spending 
on infrastructure needs.  Tariceanu expressed hope that the 
GOR and IMF reach a solution and asked if the U.S. could help 
in encouraging the IMF to be more flexible.  The Deputy 
Secretary said he would follow up on this request with U.S. 
 
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Treasury and the IMF. 
 
12. (C-Business Proprietary) PM Tariceanu noted that U.S. 
investment in Romania had increased over time, but that 
Romania continues to seek investment from a flagship U.S. 
firm such as Ford or General Motors.  In this regard, 
Tariceanu noted that both GM and Ford had expressed serious 
interest in the Daewoo factory in Craiova.  The Deputy 
Secretary spoke positively of this and emphasized that 
 
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creating an environment of transparency and openness can go a 
long way toward attracting investors. 
 
13. (C) The Deputy Secretary encouraged particular care with 
Romania's contract with Bechtel to construct a nearly 3 
billion USD highway through Transylvania, which continues to 
face opposition from the EU. How Romania handles this will 
impact its reputation among potential U.S. investors and 
business partners. Tariceanu described the Bechtel deal as a 
"good contract" negotiated by the "dirty hands" of the 
previous government.  Because the contract was announced 
without a competitive tender, it is not eligible for European 
Investment Bank (EIB) financing.  In addition, the previous 
government ignored EU plans for a highway transversing 
Romania to the south of the Bechtel route, so-called Corridor 
4.  Tariceanu said the World Bank had done a study on the 
Bechtel highway and that on a cost basis the project makes 
sense.  Nonetheless, he was worried that Romania would not be 
able to obtain financing for both the Bechtel and EU routes. 
Tariceanu said that as a future EU state, Romania has to take 
EU priorities into account.  He expressed hope that the GOR 
would be able to work out a plan to continue with the Bechtel 
project, but remained unsure. 
 
Star of Romania, Adoptions, Visas, Restitution, UNHRC 
--------------------------------------------- -------- 
14. (C) The Deputy Secretary noted the importance of 
people-to-people issues that can produce a negative 
impression if they are not addressed. He expressed hope that 
the GOR would make progress towards revoking Star of Romania 
medal awarded to xenophobic politician Corneliu Vadim Tudor. 
He urged action to resolve the hundreds of pending 
international adoption cases filed before Romania's 
implementation of a ban on international adoptions, 
underscoring the importance of placing these children in 
permanent, loving families as soon as possible.  He also 
urged adoption of legislation more in keeping with that of 
many European countries that allows for international 
adoptions.  Tariceanu said he "understood fully" U.S. concern 
on adoptions, noted that it was shared by some other European 
countries such as France, and that he was "paying close 
attention" to the issue and would try to find a solution. 
 
15. (C) Tariceanu reiterated President Basescu's request to 
President Bush that Romania be included among those working 
toward the visa waiver program on the basis of a workplan. 
The Deputy Secretary explained that Congress had set strict 
legal requirements before any country could be admitted into 
the Visa Waiver Program.  He noted that there was very little 
flexibility, but that a U.S.-Romania Consular Working Group 
would be a good format for discussing the issue and that we 
want to work constructively with the Romanian government on 
this. 
 
16. (C) Tariceanu also informed the Deputy Secretary that 
Romania is taking initial steps toward speeding up the 
restitution of personal and religious properties seized 
during the communist period.  He expressed concern that the 
previous government had dragged its feet on the issue and 
underscored a firm belief that the GOR has a moral obligation 
to ensure properties are returned.  The Deputy Secretary 
commended Tariceanu on these initial steps. 
 
17. (C) The Deputy Secretary expressed appreciation for 
Romanian support for this year's UN Human Rights Commission 
resolution on Cuba, and expressed hope that Romania would 
encourage Ukraine to support the measure.  Tariceanu did not 
provide a response. (Note. The Romanian MFA subsequently 
confirmed that Romania would approach Ukraine in Geneva.  End 
Note.) 
 
18. (C) The Deputy Secretary reiterated the U.S. interest in 
the use of facilities in Romania as part of the realignment 
of its forces under the Global Force Posture Review.  He 
indicated the U.S. hoped to have further discussions with 
Romania in April. 
 
Governing with a Slim Majority 
------------------------------ 
19. (C) The Deputy Secretary asked PM Tariceanu if the GOR 
faced difficulties with such a narrow majority in the 
Parliament.  PM Tariceanu conceded that there were potential 
problems, particularly in the Senate where the majority is 
smallest.  Nonetheless, he claimed that "none of the parties" 
want early elections, particularly given important EU 
accession benchmarks to be achieved in coming months.  The 
Deputy Secretary commented that it is often the case that 
smaller majorities lead to more parliamentary discipline 
within the ranks of a governing party or coalition. 
 
20. (C) In sum, the Deputy Secretary and PM Tariceanu agreed 
bilateral relations between the U.S. and Romania remain 
strong, with the prospects for even greater cooperation as 
the new government undertakes its aggressive program of 
reform. 
 
21. (U) Minimize considered. 
DELARE