US embassy cable - 05VIENNA3785

S E C R E T SECTION 01 OF 02 VIENNA 003785 
 
SIPDIS 
 
STATE FOR EUR/AGS - VIKMANIS-KELLER 
NSC FOR WILSON AND MCKIBBON 
 
E.O. 12958: DECL: 12/01/2015 
TAGS: PREL, PGOV, AU 
SUBJECT: SCENESETTER FOR THE PRESIDENT'S MEETING WITH 
AUSTRIAN CHANCELLOR WOLFGANG SCHUESSEL, DECEMBER 8, 2005 
 
Classified By: Charge d'Affaires Carol van Voorst.  Reason:  1.4 (b) an 
d (d). 
 
1.  (SBU) For Chancellor Schuessel, Austria's EU presidency 
during the first half of 2006 is important internationally -- 
to strengthen his status among EU leaders -- and domestically 
-- to shore up his political standing before Federal 
elections in Fall 2006.  Schuessel will want to show he 
worked constructively with the U.S. on our common 
transatlantic agenda, and he will define success in this 
regard as a EU-U.S. Summit in Austria in the Spring. 
Schuessel last met with the President on November 1, 2001. 
He comes to Washington following a visit December 1-2 to 
Moscow to meet with President Putin. 
 
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Freedom Agenda 
-------------- 
 
2.  (SBU) Under Schuessel, Austria has played an active role 
in advancing freedom and stability in the neighborhood, and 
the Chancellor will emphasize these activities next year. 
Austria's foreign policy agenda for the presidency starts in 
the Balkans, where Schuessel has been a solid partner with 
us.  Austria assumed a EUFOR command in Bosnia on November 
30, it has 600 troops in Kosovo and over 300 in Bosnia, and 
the government has placed no caveats on the use of the 
troops.  As EU President, Schuessel wants to facilitate 
progress on status questions in Kosovo and elsewhere, and the 
Austrians plan to work closely with the U.S. and with Martti 
Ahtisaari over the coming months. 
 
3.  (SBU) A broader area of emphasis for the Austrian 
presidency is in the area covered by the EU's "New 
Neighborhood" policy.  Austria has already taken the lead for 
the EU in coordinating law enforcement activities in Central 
and Eastern Europe and Central Asia.  Working with EU 
External Relations Commissioner Benita Ferrero-Waldner, a 
Schuessel protegee, the Austrian presidency will encourage 
stability and further development.  The Austrians share U.S. 
views rearding Belarus president Lukashenko and will want to 
be helpful.  Knowledgeable observers of developments in 
Ukraine, the Austrians know the review of the EU action plan 
for Ukraine will occur on their watch and will do what they 
can to promote the neighborhood policy.  They look forward to 
consultations wtih the U.S. prior to the March meeting of EU 
Foreign Ministers. 
 
4.  (SBU) In the Broader Middle East, Austria has encouraged 
the identification of common values as a response to 
extremism.  In November, Austria kicked off the presidency by 
hosting a conference on "Islam in a Pluralistic World," 
attended by Presidents Talabani and Karzai.  This event 
reinforced the message of the Bahrain BMENA conference and 
supported our broad goals.  Austria has made modest 
contributions to stability in Iraq:  police trainers at the 
Iraqi Police Academy in Jordan, limited humanitarian aid, 
substantial debt relief, and offers of export credit 
guarantees.  On Turkey, the Austrians would be happy for 
accession talks to take their course, but as Schuessel 
demonstrated in the run-up to the October accession talks in 
the EU, he will not shy away from addressing problematic 
issues if they arise. 
 
----------------------------------- 
Economic Prosperity and Development 
----------------------------------- 
 
5.  (S) Austrian business, especially in the financial 
sector, has delivered real benefits to the area between 
Austria and the Russian border.  Austrian firms are the main 
Western European banks operating in the region, holding 
almost a quarter of the banking sector.  The stability they 
bring has been a basis for commercial investment and 
development.  This positive picture has been somewhat clouded 
by recent questions regarding possible money laundering 
activities by some of these banks, a subject we are looking 
into. 
 
6.  (SBU) Austrian firms have sought a strong presence in the 
Middle East.  Austrian business has made strides in 
reestablishing itself in Iraq, and the government has 
recently decided to open a Trade Office in Erbil.  Austrian 
development thinking focusses on Official Development 
Assistance and they commit resources to a few "priority 
countries" in order to maximize the impact of the country's 
small budget.  The Austrians prefer to channel emergency 
response through the EU, although they made generous 
bilateral offers for assistance after Hurricane Katrina. 
 
7.  (S) Problematically, Austrian firms have been active in 
countries of concern, such as Iran.  An Austrian arms 
manufacturer sold high-power sniper rifles to Iran until we 
induced the Austrian government to halt further deliveries. 
Iran has also worked to establish capacities in Austria to 
purchase dual-use goods.  At our insistence, Austria blocked 
Iranian plans to open a formal government office for 
technology transfer, but has permitted Iranian commercial 
offices to open. 
 
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Fight Against Terrorism 
----------------------- 
 
8.  (SBU) Austria is a strong partner in stemming financial 
flows to terrorists, and our law enforcement cooperation is 
effective.  Austria does not participate in military activity 
in Iraq, and it has not had a combat role in Afghanistan.  In 
Afghanistan, almost a hundred Austrian troops deployed to a 
Provincial Reconstruction Team in Kunduz last summer to 
provide election security. 
 
9.  (SBU) The Austrian government will make anti-corruption 
and law enforcement cooperation a cornerstone of the 
presidency.  They will host a major conference in Vienna in 
May to coordinate EU law enforcement activities in the area 
along the EU's eastern border. 
 
------------------- 
Political Situation 
------------------- 
 
10.  (SBU) Schuessel, in office since 2000, faces 
parliamentary elections in September 2006.  He remains 
personally popular, but his conservative People's Party has 
generally done poorly in local elections and consistently 
lags behind the Social Democrats by 4-5 points.  His current 
coalition partner is in disarray.  Many observers expect the 
elections to result in a grand coalition. 
 
11.  (SBU) Schuessel is currently taking some political heat 
from the opposition and press over a January 2003 incident in 
which a U.S. contract air carrier overflew Austria on a 
flight from a U.S. military base in Germany.  The plane did 
not have Austrian diplomatic clearance for transporting a 
U.S. government cargo.  The political opposition has now 
seized on the issue, charging that the flight was a CIA 
prisoner transport operation and demanding that Schuessel 
raise the issue with the President.  Schuessel's government 
has sought to downplay the issue. 
VAN VOORST