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06VIENNA2322 3 August 2006 Confidencial / No para extranjeros Embassy Vienna

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E.O. 12958: DECL: 07/12/2016

Classified By: Economic-Political Counselor Gregory E. Phillips. Reaso
n: 1.4 (b) and (d).

1. (C) Summary: The Austrians approached the EU presidency
like a solid backup quarterback takes the field: they had
modest expectations, they strove for technical competence,
and they set realistic goals. Their biggest successes —
winning agreement on a financial perspective, getting
agreement on a services directive, and hosting a successful
and substantive U.S.-EU summit — were the result of good
preparation and a lot of behind-the-scenes lobbying. The
opening minutes of the presidency saw the eruption of the
Russia-Ukraine gas crisis; the Austrian response — to find a
short-to-mid range solution — was characteristic of their
field generalship. On the big issues — the constitutional
treaty, the debate over enlargement, and addressing the sour
"mood" among EU member state publics — the Austrians sought
to put the EU in a better spot than when they started. They
were largely successful, with January’s prevailing sense of
doom having given way to pragmatism by June. Austria’s
management of the ministerial and summit meetings was
similarly workmanlike, delivering on Chancellor Wolfgang
Schuessel’s dictum that Austria would be "a good host." This
set the stage for a logistically and substantively successful
U.S.-EU Summit at the end of the presidency. The Austrians
showed real skill in managing the response to the Belarusian
elections and in deflecting public criticism of Guantanamo
and other counter-terrorism efforts. Anxious to avoid
embarrassing missteps in advance of national elections in the
fall, Chancellor Schuessel’s government "played it safe" by
eschewing low-percentage efforts. This worked to our benefit
when they practically ignored the China arms embargo, but
they could have done more to help find common ground on the
Doha Development Round or to address the human rights deficit
in Latin America. Nevertheless, at the final whistle, the
Austrians could leave the field with the satisfaction of
having put in a solid performance. End Summary.

Setting Expectations: "Execute the Game Plan"


2. (C) Austria assumed the Presidency of the European Union
in January with modest ambitions. Austrian leaders set the
tone by repeating that Austria would be a "service-provider"
and an "honest broker," seeking to "restore confidence" in
the European project. By the start of the presidency, the
goal was clear: Austria sought to deliver an unspectacular
but workman-like performance, achieving what was
realistically possible while deflecting more ambitious
expectations. As a mid-sized country with a correspondingly
small government, Austria took up the job much like a backup
quarterback might take the field. In those circumstances,
the goal is not to attempt heroics, but simply to execute the
game plan, take advantage of opportunities, and keep making
progress. In those terms, the Austrian presidency
successfully "managed the game."

Preparation: "You’re Starting"

3. (SBU) Like a second-stringer who finds out he’s going to
start the following week, the Austrians put tremendous effort
into preparations. A year and a half before "game time," the
government — especially the Foreign Ministry — started to
assemble a management team of almost 200 new hires to ensure
that Austria would be able to host an intense schedule of
Ministerial and Summit meetings. In the summer of 2005, the
Foreign Ministry made its last major round of assignments,
putting key personnel into place in Vienna and Brussels "for
the duration." Anyone who had failed to grab an overseas
posting found themselves frozen into a headquarters


4. (C) Austria started in a hole. The French and Dutch
rejection of the EU Constitutional Treaty had already set a
negative mood. Then, on January 1, 2006, the Austrians were
barely home from the New Year’s Ball when they learned that
Russia had cut gas deliveries through Ukraine. The way the
Austrians managed that problem was a good indicator of their
response to the Presidency as a whole. They did not seek to
make a spectacular response. Rather, working with their
colleagues in the EU, and with a good deal of engagement on
Washington’s part, the Austrians were able to turn a
potential disaster into a modest gain. The broader issues of

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energy security and of support for democracy in the former
Soviet Union would continue to dog them. However, they
worked out an operational response that kept gas flowing to
Western Europe, while at least gave some breathing room to
Ukraine and Moldova.

The Battle for Field Position

5. (C) From the start, the Austrians saw their most
important task as advancing the "European Project." The
constitutional issue was a key part of this nexus of issues,
and the future of the enlargement process was another. In a
more diffuse way, the European public’s malaise regarding the
EU was a matter of concern for Austria, and especially for
Chancellor Wolfgang Schuessel. However, the Austrians knew
they could not achieve huge gains on any of these fronts.
Their goals were to regain momentum and to leave things in a
better spot than when they started.

6. (C) On the constitutional treaty, MFA State Secretary
Hans Winkler noted that the EU had called for a "period of
reflection" during the Austrian presidency. This meant that
there were few expectations. However, the Austrians did not
want to preside over the general acceptance that the
integration process was dead. Without much fanfare,
Chancellor Schuessel sought to generate modest momentum.
Recognizing that the two "no" votes, crucial as they were,
stood against 15 "yes" votes, Schuessel and his team made
low-key public efforts to support the continuation of the
constitutional process. By June 16, when the European
Council met near Vienna, Schuessel could announce that there
was no disagreement as to the "principles" of the
constitution. Those principles, as Winkler later enumerated
them, were support for a better-functioning EU, the creation
of an EU "fit for the future," and underlying democratic

7. (C) On enlargement, Schuessel faced considerable public
anxiety on the EU’s plans to take in new members —
especially ones like Turkey. Austria’s stubbornness during
the discussions of the negotiating mandate for Turkey’s
accession talks reflected a feeling of political
vulnerability. However, Schuessel did not want a fight about
enlargement to be the story of his presidency. Schuessel
played it safe by handing off the enlargement issue to
technical negotiators, and staying away from it. He got a
major break with the arrest of Ante Gotovina, which permitted
major progress on Croatia’s accession process — a popular
proposition in Austria.

8. (C) The "mood" of the European public was of special
concern to Schuessel. Austrian EU Ambassador Gregor
Woschnagg had cited as Austria’s top goal "to restore public
confidence in the European project." In January, Schuessel
had felt the lack of Austrian support for the EU, with almost
half of all Austrians expressing skepticism about the EU. By
the end of his presidency, Schuessel could reflect on polls
showing that 2/3 of Austrians were proud of the presidency,
and only four percent (according to Winkler) said they felt
uninformed about EU initiatives. In January, Winkler pointed
out, the general debate was about "how dead" the constitution
and the integration process was. By the end of June, Europe
was again looking forward.

Making Forward Progress

9. (SBU) Much of the Austrian presidency’s effort went into
logistical arrangements for the full series of high level
meetings that took place in Austria. Chancellor Schuessel
made clear that being a "good host" was an important goal.
One of the most complex ministerial meeting was that of the
Justice and Home Affairs (JHA) ministers. The Austrians made
this a centerpiece of their presidency schedule. They
planned a back-to-back series of three sets of meetings. The
first was in troika format with the U.S., the second was an
expanded meeting with ministers from throughout Europe and
the EU’s "Neighborhood" countries, and the third was an
ambitious U.S.-Russia-EU meeting. Having almost set too high
a bar for success, the Austrians worked to ensure that there
would be agreement on a substantive outcome document, and
settled for what was possible. In the end, the ministerial
meetings went well, and the delegations accomplished
everything they could expect.

10. (C) An even more complex operation was the EU-Latin
America summit. Almost 60 delegations descended on Vienna,

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each with a more or less idiosyncratic and demanding head of
state. Adding to the complexity, Venezuelan president Hugo
Chavez and Bolivian president Evo Morales threatened to
hijack the Austrian concept by trying to attract attention to
an "alternative summit." The Austrians showed a fine
capacity for tactical deception. They encouraged Catholic
groups, including the Archdiocese of Vienna, to engage
heavily in the "alternative summit" as a way of moderating
the potentially more disruptive elements. Then they let
Chavez and Morales take themselves out of the play by
facilitating their engagement in the "alternative summit,"
while insisting that the two participate in the official
summit activities as well. In the end, the events resulted
in a solid gain in the EU-Latin American relationship, with a
creditable document and a substantive exchange among the

11. (C) The U.S.-EU summit was an even bigger challenge than
the Latin American summit, if only because the stakes were so
much higher. For the Austrians, dealing with the U.S. was a
matter of reading what we wanted to do and then executing.
The development of an action-oriented, relevant and
operational summit document was a tremendous challenge to all
sides, but it was a high-reward task that paid off.
Schuessel’s personal facilitation of a substantive set of
discussions and a public presentation that stressed the need
for cooperation on our common agenda was key to pulling off
the event.

12. (C) The EU, and by implication the Austrian presidency,
made significant if unspectacular gains in the Balkans.
Austrian facilitation of the Kosovo discussions helped keep
progress alive. In Montenegro, there was a good deal of
support for the EU’s engagement, leading to a result — the
peaceful achievement of Montenegrin independence — that was
significant for the lack of problems that arose.

Making Something out of Nothing

13. (C) There were several instances in which the Austrian
presidency were able to achieve forward progress against bad
odds. On Belarus, despite a solid game plan for addressing
the probability of severe problems in March elections, the
events themselves caught the Austrians somewhat out of
position. As news broke of the massive irregularities in the
Belarus vote, the Austrians were facing an EU which lacked
consensus on taking steps such as travel bans and financial
sanctions. However, Lukashenko’s sheer momentum in the wrong
direction let the Austrians facilitate a consensus in favor
of the necessary moves.

14. (C) Another such instance involved the debate in
European countries over the Guantanamo facility and
allegations of secret prisons and rendition flights in
Europe. In that case, the Austrian strategy was to slow down
the development of momentum of public opinion on the issue.
They pocketed inquiries, resisted calls to include references
to the issue at the March Foreign Ministers’ meeting in
Salzburg, and deflected public demands to make the issue a
central agenda item at the U.S.-EU summit. Schuessel’s
forthright public defense of U.S.-EU cooperation on terrorism
at the Summit effectively defused the topic.

15. (C) The North Korean threat to launch missiles, which
came to fruition just after the Austrian stint, could have
been disruptive. By that point, however, the Austrians had
the experience in coordinating EU foreign policy to read the
situation immediately. They prepared a draft response that
hit the right spot, condemning the North Korean initiative as
a provocation and leaving no doubt about international

Playing it Safe

16. (C) With modest capabilities and modest expectations,
the Austrians were very selective in deciding where to fight
their battles. This innate conservatism was, if anything,
reinforced by the government’s desire to avoid embarrassing
missteps in advance of national elections in the fall (now
set for October 1). In some cases, this redounded to the
benefit of our policy goals. On the EU’s China arms embargo,
the Austrians, despite a preference for lift, told us early
on that they were not going to pursue this during their
presidency. Likewise, despite a predilection to press for
stricter EU measures against agricultural biotechnology, the
Austrians did not undertake major policy initiatives that

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could have poisoned the atmosphere of the summit. Instead,
they held two conferences that served to air views and give
the Austrian people — already stubbornly anti-biotech — the
sense that they were winning a hearing in Brussels.

17. (C) The Austrians similarly played it safe in areas in
which we would have preferred that they take more action.
They did not show particular leadership in shaping the EU’s
policies toward the Doha Development Round. This was largely
because of deep divisions within the Austrian government, as
in other governments, between free-traders in the Economics
Ministry and protectionists in the politically powerful
Agriculture Ministry. Clearly, Schuessel decided this was a
fight he would rather not have. On foreign policy and the
freedom agenda, the Austrians saw no percentage in pressing
for a more forthright EU position on Cuba and Venezuela.
Instead of heightening the urgency of the issue, Vienna’s
role as host of the Latin America Summit rather reinforced
the Austrian tendency to avoid what the Austrians saw as
"buying trouble" by pressing their guests for human rights

18. (C) On the Balkans, an issue of primary importance to
Vienna, the Austrians scaled back a concept they would dearly
liked to have implemented for a major conference on the
margins of the March Foreign Ministers’ meeting in Salzburg.
They realized that March was simply too soon to try to
announce any breakthrough on Kosovo, and they recognized that
an attempt to force a public relations coup could be
disastrous for the substance of the issue. In the end, they
invited Balkan ministers to Salzburg, and issued a statement
supportive of UN Special Negotiator Martti Ahtisaari’s

Pushing it Across the Goal Line

19. (C) In addition to the outcome of the U.S.-EU Summit,
Austria had two big scores during its presidency. One was
achievement of political agreement on the EU’s financial
perspective. The British Presidency had delivered the
conditions for success by finishing negotiations among the
member states. However, this left the Austrians with the
task of winning agreement for the deal in the European
Parliament. For the Austrians, the British achievement was
tremendous, but it still left "one hell of a job" to do, as
Ambassador Woschnagg put it. The lobbying effort was very
much in the Austrian style: it was persistent and rarely
public. Winkler said he made 61 formal speeches to the
European parliament in the six months of Austria’s
presidency, and the cloak room discussions that surrounded
those appearances were countless.

20. (C) The other success was winning agreement on an EU
services directive. This had become a highly emotional
issue. Some pointed to popular unhappiness on the services
directive as a primary reason for the French rejection of the
EU constitutional treaty. The Austrians facilitated a
compromise that seems simple, but cost considerable cajoling:
there would be free movement of labor in the services
sector, but the rules under which individuals worked would be
those of the country of employment, not of the country of
origin. Getting the EU over the top of this issue was a
major accomplishment for the Austrian presidency.

Final Stats

21. (C) The Austrians themselves acknowledge that their
success lay in doing what they could do, and not trying to do
too much. By the end of their presidency, they had stretched
themselves to the limit. They were fortunate to have in
Chancellor Schuessel an old pro who was confident in reading
emerging situations. Nevertheless, this was a team effort in
which the entire Austrian bureaucracy engaged.

22. (C) Indeed, one of the key lessons the Austrians drew on
behalf of the entire EU was how much the EU needs a
functioning apparatus to serve as the presidency’s
"government." The constitutional treaty would provide such a
system, and the Austrians feel qualified to say that this is
an urgent need.

23. (C) A feature of EU decision-making which will not go
away soon is the need for consensus among the member states.
When any member state has the right to block any piece of
text in a document, and has no obligation to explain why, it
becomes practically impossible for the presidency and its

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supporting cast in Brussels to conduct a negotiation with
agility. In order to arrive at positive, action-oriented
results, it is especially important for the United States as
a negotiating partner to provide generous lead-time for
introducing our concepts, to maintain consistency in our
negotiating positions, to avoid unnecessary surprises, and to
engage in plenty of personal, face-to-face encounters with
the EU team.