US embassy cable - 05BRATISLAVA959

C O N F I D E N T I A L  BRATISLAVA 000959 
 
SIPDIS 
 
 
E.O. 12958: DECL: 12/05/2015 
TAGS: PREL, ECON, EU, LO 
SUBJECT: EU BUDGET, ENLARGEMENT TOR PRIORITIES FOR SLOVAKIA 
 
REF: STATE 217518 
 
Classified By: DCM Lawrence R. Silverman for reasons 1.4 b and d. 
 
1. (C) Pol-Econ chief presented reftel points to Zuzana 
Dutkova, Division of European Affairs at the Slovak Republic. 
 Dutkova did not comment on the points.  Rather, she said 
Slovakia's absolute priority is to get an EU budget passed. 
Slovakia has been willing to compromise, even to the point of 
angering some of its V-4 neighbors, because it sees the 
passage of the budget and the mechanism for disbursing funds 
as more important than preserving the total amounts now 
proposed for the new member states.  They also want to work 
with UK PM Blair (with whom they largely agree on budgetary 
issues), rather than publicly criticize him. 
 
2. (C) Milan Jezovica, foreign policy advisor to Prime 
Minister Dzurinda, told the DCM December 5 that the Slovaks 
have indeed taken a more pragmatic view of the issue, based 
on wanting Tony Blair to succeed.  Jezovica said the EU needs 
to get the budget passed, and Slovakia is skeptical the 
Austrians could do it under their presidency.  He related 
that at the meeting with Blair in Budapest last week, the 
Czechs and Hungarians put up a fight and then backed off; the 
Poles did not relent.  (Comment: We note that the Czechs 
appear to have accepted Blair's 12/5 compromise, but the 
Poles and Hungarians continue to oppose.)  The Slovaks are 
opposed to the Polish approach and stance.  Dzurinda did not 
want to make a scene at the press conference on Friday, so he 
did not show a public difference with the Poles.  However, 
the Slovaks say that, unlike their V-4 neighbors, they do not 
want to cut off their nose to spite their face.  Joszef 
Berenyi, MFA State Secretary in charge of EU affairs, 
provided an analogy to the DCM (and the press): If someone 
offers you 10,000 euros to row across the Danube, do you take 
the risk, not really knowing whether you'll survive or get 
paid even if you do?  Or do you cross the river via the 
bridge for 10,000 euros, knowing that when you get to the 
other side, the guy is only going to pay you 9000?  You 
should cross via the bridge and take the 9000, because you're 
much more likely to be able to collect. 
 
3. (C)  Jezovica said that, unlike his counterparts, Dzurinda 
had decided to focus on accessibility to the funds, rather 
than fixating on the amounts (which Slovakia predicted would 
be cut in any case).  Berenyi, who is also a Blair fan, was 
more specific.  The Slovaks asked for non-monetary 
concessions from Blair and the EU in exchange for going along 
with some cuts: 
 
-- Raising the maximum proportion of each project that could 
be financed with EU funds from the current 75% to 85%, at the 
discretion of the recipient country; 
 
-- Allowing funding to be used for housing, something now 
prohibited by the EU.  This would help the GOS fund the 
housing for Kia-related employees in Zilina; 
 
-- Lengthening the time period of grants from 2 to 3 or 4 
years.  Berenyi said the funds remaining after 2 years have 
to be repaid if they have not been spent yet; and 
 
-- A refund of VAT, which would be particularly valuable to 
the regions and towns. 
 
4. (C) On December 1 we learned that Slovakia had refused 
join other new member states in signing a letter to Blair. 
Jezovica clarified this decision within the GOS.  Originally, 
the V-4 (including Slovakia) agreed to do a relatively mild 
open letter on the issue as an op-ed piece, but the Financial 
Times, after getting more information via leaks from some 
governments, no longer considered the open letter newsworthy. 
 When this failed, the ten new member states put together a 
sharper private letter, reportedly at Polish and Czech 
urging.  The Slovaks declined to sign this letter, not 
wanting to "slap Blair in the face before hearing from him" 
in Budapest, according to Jezovica.  He added that the 
Slovaks had tried to calm down the Poles before the Budapest 
meeting, but the Poles and Czechs "seem to see us as 
traitors" on this issue. 
 
Enlargement a Top Priority 
--------------------------- 
 
5. (C) Regarding the agenda for the December 12 GAERC, 
Dutkova said enlargement was a priority for Slovakia.  Some 
members, such as France, want to link the enlargement process 
to ratification of the constitutional treaty and the budget. 
However, for Slovakia enlargement is a separate, important 
issue for the EU to deal with.  The GOS sees potential EU 
membership as an indispensable motivating tool for reform in 
the Balkans and Ukraine, particularly.  Dutkova called Prime 
Minister Dzurinda's November statement in Germany, when he 
spoke about the EU taking a pause from enlargement, an 
"unhappy interpretation."  That statement was not 
 
representative of Slovakia's policy. 
 
VALLEE 
 
 
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