US embassy cable - 05PARIS6113

C O N F I D E N T I A L SECTION 01 OF 02 PARIS 006113 
 
SIPDIS 
 
E.O. 12958: DECL: 09/01/2015 
TAGS: PREL, KNNP, PARM, FR, NATO, EUN 
SUBJECT: EUR A/S FRIED AND GERMAN POLITICAL DIRECTOR 
SCHAEFER DISCUSS IRAN-EU3, DEVELOPMENTS IN KOSOVO, AND HOW 
BEST TO IMPROVE NATO DECISION-MAKING 
 
 
Classified By: DEPUTY CHIEF OF MISSION KARL HOFMANN, REASON 1.4 B/D 
 
1. (C) Summary: A/S Dan Fried met with German Political 
Director Michael Schaefer September 1 in Paris, just prior to 
the latter's departure for the EU's Gymnich in Cardiff. 
Schaefer noted the EU3 considered the Paris Agreement 
negotiations to have ended, given that Iran had resumed 
conversion activities.  The EU now supports referral of Iran 
to the UNSC, but without an immediate reference to sanctions. 
 Schaefer called for the U.S. and the EU to get Chinese and 
Russian support, in advance of the next IAEA Board of 
Governors' meeting.  A/S Fried cautioned that EU efforts to 
obtain Russian or Chinese support must not lead to a watering 
down of our joint approach to Iran.  He recommended that the 
EU and the U.S. think of an option, which could include 
sanctions, with the long-term goal of promoting  democracy in 
Iran.  Schaefer expressed concern that German business 
interests would suffer in the event the EU imposed sanctions. 
 
2. (C) On Kosovo, Schaefer related that UN special envoy Kai 
Eide was downbeat about the situation on the ground, citing 
deficiencies in justice, police, and privatization domains. 
Decentralization is not working and parliamentary-approved 
laws are not being implemented.  Schaefer observed that 
Rugova's poor health might also adversely affect the 
situation.  A/S Fried and Schaefer agreed that while status 
talks should commence by the end of the year, there is still 
time to work together on a common message.  Schaefer 
suggested increased consultations and the potential holding 
of a conference on status talks. On NATO, A/S Fried conveyed 
U.S. interest in informal and early consultations, possibly 
in restricted format, as part of our effort to avoid major 
disputes at NATO meetings.  He emphasized that the U.S. was 
not against U.S.-EU action when that was the best format. 
A/S Fried also informed Schaefer of the upcoming Forum for 
the Future conference in Bahrain, an initiative linked to the 
Broader Middle East agenda.  End Summary. 
 
EU3 Discussions on Iran 
------------------------ 
 
3. (C) Schaefer related to A/S Dan Fried the outcome of the 
EU3's August 31 discussions on Iran in Paris.  The EU3 also 
met with Russian DFM Kislyak on the same issue.  Schaefer 
said the EU3 have concluded that Iran had violated the terms 
of the November 2004 Paris Agreement, that it needed to 
comply with its IAEA obligations, and that the key now was 
for the EU and the U.S. to ensure at the upcoming IAEA BOG 
meeting that Iran would be referred to the UNSC.  The 
Russians, he said, are worried about a nuclear Iran, but do 
not believe there is enough evidence to refer Iran 
successfully to the UNSC.  The task ahead, Schaefer noted, is 
for the EU and the U.S. to convince the Russians, the 
Chinese, the South Africans and others (NAM members) of the 
necessity of reporting Iran.  Schaefer said it was important 
to counter Iran's legal arguments in defense of conversion. 
The Iranians needed to be told that it is isolating itself, 
as no one accepts the economic necessity of conversion. 
 
4. (C) Schaefer said referral is the end goal, but that it 
should not include immediate references to UNSC sanctions. 
It would be hard for the EU and the U.S. to argue that a 
threat exists when there is no evidence that Iran has moved 
to the enrichment phase.  Conversion in itself is not a 
threat to international security, he added.  Schaefer said 
the authority of the UNSC could be used to push for the 
support of the international community.  At present, the 
Iranians are not afraid of the UNSC -- they have changed 
tactics from a dual-track approach of avoiding referral to 
UNSC while proceeding with conversion, to a policy focused on 
enhanced nuclear activities (eventual enrichment). 
 
5. (C) A/S Fried cautioned that the EU quest to get the 
Russians and others to accept the necessity of an UNSC 
referral could risk a watering down of our common efforts 
against the Iran nuclear program.  To avoid becoming weak, he 
suggested that the EU and the U.S. consider a "plan B" for 
U.S. and EU sanctions.  Schaefer said that the EU is looking 
at potential economic measures, but that EU industry is in a 
weak position.  Small and medium size German companies run 
the risk of bankruptcy in the event of the imposition of 
sanctions.  Additionally, once sanctions are implemented, 
talks with Iran likely would end.  Meanwhile, the Indians, 
Russians and Chinese would benefit at the expense of Western 
businesses.  Schaefer and A/S Fried agreed that the Indians 
might be key and that further consultations with them were in 
order.  Schaefer said the EU3 also would have to do a better 
job of convincing the international community of the extent 
of joint U.S. and EU efforts made to date to offer Iran a 
solution.  A/S Fried reminded Schaefer that we all might 
benefit by distinguishing between the Iranian regime and its 
people, as we work on our long-term goal of promoting 
democracy in Iran.  Schaefer responded that the Iranian 
regime itself was already divided, adding that Iranian leader 
Ahmadinejad is isolated from more moderates like Larijani and 
Rafsanjani. 
 
Kosovo 
------ 
 
6. (C) Schaefer noted that UN special envoy Kai Eide was 
downbeat about realities on the ground in Kosovo.  Eide feels 
a sense of urgency is lacking with respect to the enormous 
difficulties still affecting the justice, police and 
privatization systems.  Laws passed by parliament, for 
instance, are not being implemented on the ground. 
Decentralization is not working, despite the stated 
willingness by all sides to accept multi-ethnic communities, 
even in areas where the Serbs are in a majority.  Schaefer 
said he told Eide that the focus should be on moving forward 
on status talks.  Schaefer and A/S Fried also observed that 
Rugova's illness is a serious concern and a potential 
complicating factor, with Schaefer fearing a power vacuum in 
the event of the passing of Rugova.  The latter's absence 
could also adversely impact on the talks.  Nonetheless, both 
A/S Fried and Schaefer agreed that status talks should take 
place by the end of the year.  In the interim, Schaefer 
noted, there were 6-8 weeks left for a sliding review.  A 
final paper on the issue is not ready, but the international 
community can at least communicate to the parties that 
benchmarks needed to be met. 
 
7. (C) A/S Fried briefed Schaefer on U.S. thinking, noting 
that EUR DAS DiCarlo would go to New York soon.  Schaefer 
suggested that perhaps he and U/S Burns could travel to the 
region together to convey our concerns, to include 
consultations with Eide.  Without making a commitment, A/S 
Fried concurred, adding that it was essential to press for 
progress on decentralization.  Schaefer indicated a 
conference on talks might be useful, but observed that the 
U.S. and Europe would need to think creatively about a 
potential location, the participants, and the exact agenda. 
A/S Fried said we could engage the Secretary if launching of 
the talks is on the table. 
 
NATO-EU Relations 
----------------- 
 
8. (C) A/S Fried informed Schaefer that the U.S. wants to 
improve its dialog with Europe and that he planned to propose 
to the French that we debate issues more informally, possibly 
in smaller groups.  The aim is to quickly work out intentions 
and not to get into institutional fights at NATO and 
elsewhere, A/S Fried observed.  Schaefer commented that 
France viewed NATO's mandate as one restricted to operational 
issues.  A/S Fried emphasized that we did not, and that we 
supported both the EU and NATO, though NATO was our 
institution of choice for security issues and actions. 
Touching on the difficulties experienced with France at NATO, 
Schaefer and A/S Fried agreed that the U.S. and Germany 
needed to push France harder to cooperate on decisions. 
Picking up on the idea of consultations, Schaefer suggested 
an informal meeting on NATO in New York.  A/S Fried said he 
would take up the suggestion in Washington.  In a brief 
reference to Central Asia, Schaefer volunteered to travel 
with A/S Fried to Tashkent. 
 
Broader Middle East 
------------------- 
 
9. (C) A/S Fried briefed Schaefer on our goals in the Middle 
East, specifically on the upcoming November 12 
ministerial-level Forum for the Future conference in Bahrain. 
 He emphasized that the U.S. is looking for broader European 
involvement. 
 
10. (U) The message has been cleared by A/S Fried. 
STAPLETON