US embassy cable - 94BRUSSELS8603

C O N F I D E N T I A L SECTION 01 OF 02 BRUSSELS 08603 
 
 
E.O. 12356:DECL:  OADR 
TAGS:  PGOV, PINR, PHUM, PTER, LE, RAID 
SUBJECT:  LEBANESE AMBASSADOR FAWZI SALLOUKH CAUTIOUS 
ABOUT PROGRESS IN THE SYRIAN/LEBANESE TRACKS OF THE 
MIDDLE EAST PEACE TALKS 
 
1. CONFIDENTIAL - ENTIRE TEXT. 
 
2. SUMMARY.  FAWZI SALLOUKH, LEBANESE AMBASSADOR TO THE 
EU AND BELGIUM, PAID A COURTESY CALL AUGUST 1 ON 
AMBASSADOR EIZENSTAT.  SALLOUKH HAS BEEN IN BRUSSELS 
SINCE LAST APRIL AND HAS FOUND THE PACE LESS HECTIC THAN 
AT HIS LAST POST--WHICH WAS VIENNA--WHERE HE HAD TO 
COVER A BROADER RANGE OF ISSUES.  THE LESS HECTIC PACE 
ALSO APPEARS TO BE THE RESULT OF "THIN" EU-LEBANESE 
TIES, WHICH ARE UNLIKELY TO GROW STRONGER SO LONG AS 
LEBANON REMAINS OUTSIDE THE MULTILATERAL TALKS. 
SALLOUKH BLAMED TEL AVIV FOR THE LACK OF PROGRESS IN THE 
ISRAELI-LEBANESE BILATERALS, ASSERTING BEIRUT COULD 
DISARM HIZBALLAH ONCE THE ISRAELIS LEAVE SOUTHERN 
LEBANON.  END SUMMARY. 
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SALLOUKH BELIEVES ASAD HAS TIME TO WAIT 
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3. AMBASSADOR EIZENSTAT ASKED ABOUT PROSPECTS FOR THE 
MIDDLE EAST PEACE PROCESS GIVEN THE RECENT 
ISRAELI-JORDANIAN AGREEMENT.  SALLOUKH AGREED THAT 
DEVELOPMENTS WERE PROMISING AND WAS OPTIMISTIC ABOUT AN 
EVENTUAL SETTLEMENT, BUT SAID SYRIAN PRESIDENT ASSAD HAS 
THE ABILITY TO "WAIT."  THE ISRAELI-JORDANIAN AND 
ISRAELI-PLO ACCORDS CONSTITUTE TWO "POSITIVE STEPS 
FORWARD," BUT COULD NOT BE CONSIDERED THE "FINAL 
SOLUTION" TO THE PROBLEM.  HE ALSO WARNED AGAINST A 
STEP-BY-STEP APPROACH--SUCH AS FOLLOWED IN THE 
ISRAELI-PALESTINIAN CASE--TO SOLVING THE 
ISRAELI-SYRIAN/LEBANESE DIFFERENCES. 
 
4. ONCE THERE IS A RESOLUTION, HE SAW NORMALIZATION OF 
ISRAELI-SYRIAN AND ISRAELI-LEBANESE TIES AS HAVING THE 
POTENTIAL TO PROCEED MORE RAPIDLY THAN HAPPENED FOR 
EGYPT AND ISRAEL AFTER THE CAMP DAVID ACCORDS.  HE SAID, 
THOUGH, THAT ISRAEL MIGHT BE "AFRAID" OF THE POTENTIAL 
FOR ISRAELI-LEBANESE ECONOMIC COMPETITION.  HE FELT, IN 
PARTICULAR, THAT LEBANESE AND ISRAELI AGRICULTURE WOULD 
BE COMPETITORS. 
 
5. SALLOUKH SAID LEBANESE PARTICIPATION IN THE 
MULTILATERALS DEPENDS ON PROGRESS IN THE BILATERALS, 
WHICH IN TURN IS PREDICATED ON THE "UNCONDITIONAL 
WITHDRAWAL" OF ISRAELI TROOPS FROM THE SOUTHERN SECURITY 
ZONE.  SALLOUKH SAID THE LEBANESE GOVERNMENT THOUGHT ITS 
LEVERAGE IN THE BILATERAL NEGOTIATIONS WOULD BE WEAKENED 
BY JOINING THE MULTILATERALS.  SALLOUKH, NEVERTHELESS, 
TRIES TO KEEP HIS GOVERNMENT ABREAST OF DEVELOPMENTS IN 
THE MULTILATERAL TRACK BY SENDING BACK REPORTS ON THEIR 
PROGRESS.  HE SAID THE EU WAS HELPFUL IN THIS REGARD BY 
GIVING HIM READOUTS OF THE VARIOUS MULTILATERAL 
MEETINGS. 
 
6. IN RESPONSE TO AMBASSADOR EIZENSTAT'S QUESTION, 
SALLOUKH WAS CONFIDENT THAT, IF ISRAEL WITHDRAWS, 
LEBANESE AUTHORITIES COULD REASSERT CONTROL OVER 
SOUTHERN LEBANON AND DISARM THE HIZBALLAH.  HE SAID 
LEBANON CANNOT DISARM HIZBALLAH NOW BECAUSE IT WOULD BE 
SEEN AS A "TRAITOROUS" ACT BY THE LOCAL POPULATION IN 
VIEW OF THE ISRAELI "OCCUPATION."  ONCE THE ISRAELIS 
LEFT, SALLOUKH SAID SYRIAN TROOPS WOULD ALSO WITHDRAW. 
SALLOUKH REFERRED TO A RECENT STATEMENT BY THE 
GOVERNMENT WHICH AFFIRMED ITS INTENT TO DEPLOY 25,000 
TROOPS TO SOUTHERN LEBANON IF ISRAELI TROOPS WOULD 
LEAVE.  IN RESPONSE TO THE AMBASSADOR'S CONDEMNATION OF 
THE RECENT TERRORIST ATTACKS IN LONDON AND LATIN 
AMERICA, SALLOUKH UNDERLINED LEBANESE CONDEMNATION OF 
ALL "KILLINGS," BUT SAID THERE WAS NO EVIDENCE OR PROOF 
OF HIZBALLAH PARTICIPATION IN THE ATTACKS. 
 
7. AMBASSADOR EIZENSTAT ASKED ABOUT SYRIA'S INFLUENCE 
OVER THE MIDDLE EAST PEACE PROCESS.  SALLOUKH SAID SYRIA 
AND LEBANON WERE LIKE "TWIN" COUNTRIES.  THERE IS SO 
MUCH INTERMARRIAGE THAT THEY ARE INSEPARABLE.  THIS IS 
THE CASE, HE SAID, FOR BOTH CHRISTIAN AND MUSLIM 
FAMILIES IN LEBANON AND SYRIA.  HE NOTED THEY WERE 
ADMINISTERED AS ONE UNIT DURING THE PERIOD OF OTTOMAN 
RULE. 
 
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ECONOMIC RECOVERY STILL STALLED 
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8. AMBASSADOR EIZENSTAT ASKED ABOUT PRIME MINISTER 
HARIRI'S HORIZON 2000 PLAN FOR DOUBLING PER CAPITA GDP 
IN TEN YEARS.  SALLOUKH SAID IT WAS GETTING A GOOD 
RECEPTION IN PARLIAMENT.  HE BEMOANED THE LACK OF 
AVAILABLE OUTSIDE ASSISTANCE.  HE SAID THAT ARAB SOURCES 
HAD DRIED UP.  THE MONIES, FOR EXAMPLE, THAT LEBANON HAD 
BEEN PROMISED AT THE TIME OF THE TAIF ACCORD HAD BEEN 
DIVERTED DUE TO THE GULF WAR.  HE HOPED THAT THE RECENT 
WORLD BANK ASSISTANCE OF USD 175 MILLION WOULD PROVE A 
CATALYST FOR OTHER DONORS, BUT ADMITTED LEBANON'S 
REFUSAL TO JOIN THE MULTILATERALS WOULD PROBABLY 
CONTINUE TO BE A STUMBLING BLOCK TO MAJOR OUTSIDE 
ASSISTANCE. 
 
9. IN THE EVENT THAT LEBANON JOINS THE PEACE PROCESS AND 
INTERNATIONAL AID IS UNFROZEN, AMBASSADOR EIZENSTAT 
ASKED ABOUT WHICH SECTORS COULD BENEFIT MOST FROM 
INVESTMENT.  SALLOUKH RESPONDED THAT LEBANON'S 
AGRICULTURE AND INDUSTRY NEEDED ASSISTANCE THE MOST. 
LEBANESE AGRICULTURE HAS BEEN PARTICULARLY HARD-HIT BY 
THE LACK OF OUTSIDE MARKETS.  SALLOUKH CITED THE EU, 
WHICH SLAPS A TWENTY-SEVEN-AND-HALF PERCENT TARIFF ON 
IMPORTED FRUITS FROM LEBANON.  HE WAS ALSO ADAMANT THAT 
MORE MONEY SHOULD NOT GO INTO THE REAL ESTATE SECTOR. 
GULF ARABS' PURCHASES WERE DRIVING UP PRICES IN THE 
BEIRUT REAL ESTATE MARKET TO SUCH LEVELS THAT MOST 
LEBANESE COULD NOT AFFORD TO BUY.  HE SAID PROPERTY 
PRICES WERE HIGHER THAN IN WEST EUROPEAN CITIES.  WHAT 
REMAINS OF LEBANON'S MIDDLE CLASS SUFFERS FROM THE RISE 
IN PROPERTY PRICES, WHILE THE OVERALL ECONOMIC HARDSHIPS 
HAVE FED DISCONTENT IN BEIRUT'S "POVERTY BELT." 
 
10. SALLOUKH THOUGHT PROSPECTS WERE BRIGHT FOR THE 
TOURIST TRADE ONCE PEACE IS FULLY RESTORED.  LEBANON 
ENJOYED 250 KILOMETERS OF SEASHORE AND PLENTY OF 
HISTORICAL SITES TO INTEREST THE FOREIGN VISITOR. 
SALLOUKH SAID SOME OUTSIDE MONEY WAS BEGINNING TO FLOW 
IN TO REBUILD THE LUXURY RESORTS ALONG THE COAST. 
 
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EU-LEBANESE TIES ON THE THIN SIDE 
--------------------------------- 
 
11. AMBASSADOR EIZENSTAT ASKED ABOUT THE STRENGTH OF 
EU-LEBANESE TIES.  SALLOUKH SAID HE TRIED TO INTEREST 
HIS GOVERNMENT IN UPGRADING THE 1977 TRADE AND 
COOPERATION ACCORD IN VIEW OF THE EU NEGOTIATIONS WITH 
OTHER MASHREK AND MAGHREB COUNTRIES.  HOWEVER, THE EU IS 
NOT INTERESTED UNTIL LEBANON JOINS THE MULTILATERAL 
PROCESS.  HE REITERATED THAT THE LEBANESE GOVERNMENT 
WILL NOT JOIN THE MULTILATERAL UNTIL THERE IS PROGRESS 
IN THE BILATERALS.  THEREFORE, EU-LEBANESE TIES SUFFER 
FROM AN "IMPASSE."  IN CLOSING, AMBASSADOR EIZENSTAT 
ASSURED HIM OF U.S. DETERMINATION TO ACHIEVE A LASTING 
PEACE IN THE REGION AND THE HOPE THAT U.S.-LEBANESE TIES 
CAN BE STRENGTHENED. 
 
(DRAFTED:POL:MBURROWS;CLEARED:POL:PHILBURN; 
ADCM:JGREENWALD; APPROVED:AMB:SEEIZENSTAT.) 
 
EIZENSTAT