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UNCLAS        BERLIN 01651

SIPDIS
CXBERLIN:
    ACTION: ECON
    INFO:   CHRON FAS DCM JIS ECONMIN FCS PAO POL AMB
CX2BERLN:
    ACTION: ECON
    INFO:   CHRON FAS DCM JIS ECONMIN FCS PAO POL AMB

DISSEMINATION: ECON
CHARGE: PROG

APPROVED: ECON:RCEKUTA
DRAFTED: ECON:DORTBLAD
CLEARED: POL: MMARTIN, ECON:MSULLIVAN, JJACOBY, RMITSCHKE

VZCZCRLI141
PP RUEHC RHMFIUU RUEATRS RUCNMEM RUCPDOC RUCNMEU
RUCNFRG
DE RUEHRL #1651/01 1670456
ZNR UUUUU ZZH
P 160456Z JUN 06
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 3708
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCNMEM/EU MEMBER STATES
RUCPDOC/USDOC WASHDC
RUCNMEU/EU INTEREST COLLECTIVE
RUCNFRG/FRG COLLECTIVE

UNCLAS SECTION 01 OF 02 BERLIN 001651 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EUR EUR/AGS, EUR/ERA, EB/ESC, AND OES 
PASS TO USTR SDONNELLY, MMOWREY 
DOE FOR IEP 
 
E.O. 12958: N/A 
TAGS: ENRG ETRD PGOV SENV EINV PREL EUN GM
SUBJECT:  GERMANY'S 2007 EU PRESIDENCY:  THE ENERGY AGENDA 
 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1. (U) SUMMARY:  Germany expects to coordinate an ambitious 
energy initiative for the country's 2007 EU Presidency in 
the first half of 2007.  Germany's EU Presidency will 
include a kind of "Lisbon Agenda" action plan for EU energy 
efficiency, use of renewables, and internal market 
coordination.  Germany expects a EU energy policy initiative 
will mean closer coordination among EU member states' energy 
policies rather than full integration of EU energy policy in 
the hands of Brussels.  German officials expect the June 15- 
16 EU Council to launch the EU's foreign energy policy by 
approving the start of energy dialogues with key supplier 
and consumer nations, including Russia.  Germany will help 
prepare an EU consensus on other energy issues to enable the 
late December EU Council under Finland to approve key 
mandates that would be achieved during Germany's Presidency. 
END SUMMARY 
 
¶2. (SBU) German Economics Ministry and MFA officials told us 
June 14 Germany seeks to implement an EU Strategic Energy 
Review as part of its EU Presidency in the first half of 
2007, working from the EU Green Paper on energy issued in 
March. According to MFA officials, the EU will take a first 
step towards a coordinated energy policy when the June 15-16 
EU Council approves EU Foreign Affairs High Representative 
Solana's foreign energy policy paper, enabling the 
Commission to begin dialogues on energy with major 
countries.  For Germany, officials hope the dialogue would 
address global energy supply questions by engaging with both 
producer and consumer countries.  In the latter category, 
the EU would engage with the U.S., China and India as 
leading energy consumers.  (German Foreign Minister 
Steinmeier already began such a dialogue bilaterally with 
China when he visited Beijing in January.) 
 
¶3. (SBU) The EU Commission would also begin energy 
discussions with producers, including Russia, Caspian region 
countries, producers in North Africa, the Middle East, and 
other OPEC producers.  An MFA official told us Germany 
looked forward to using this process for an "elegant 
solution" to the current EU impasse with Russia over the 
Energy Charter.  He said most EU members are aware Russia 
would not sign the pact, creating the need for another 
approach.  The MFA foresees the EU using the renegotiation 
of the EU-Russia Partnership agreement (due to expire in 
2007) as the basis for re-starting energy talks with Russia, 
making energy cooperation a new part of overall Partnership 
agreement. 
 
¶4. (U) German MFA officials said the June 15-16 EU Council 
will put in train the review of overall EU energy policy 
that will culminate in the German presidency.  EU member 
states have already begun intensive discussions of energy 
efficiency, renewables, energy supply, and internal energy 
market reforms.  According to the MFA, Finland's EU 
Presidency in the latter half of 2006 will shepherd these 
discussions with a goal of obtaining an EU Council mandate 
on energy at its late December meeting.  This mandate would 
enable Germany to achieve approval for a coordinated EU 
energy policy during its 2007 Presidency. 
 
¶5. (SBU) German officials emphasized the Commission has no 
legal basis in EU treaties for directing or regulating 
energy policy as part of the single market.  The EU would 
therefore launch its energy policy in the form of an Action 
Plan similar to the method used for the Lisbon Agenda for 
economic competitiveness - an approach Germany prefers.  The 
EU's limited energy competence suits Germany's goal of 
retaining its own national energy policy for supply and 
other questions.  German officials want  "the minimum 
necessary EU role" in energy questions, emphasizing the 
vital role of the private sector since ultimately new energy 
sources and supply routes will be a matter for private 
investment. 
 
¶6. (SBU) German officials expect Finland to achieve progress 
on energy efficiency in its Presidency as it addresses 
improved technologies and better coordination between EU 
energy markets.  To continue the push towards greater 
efficiency and energy security, Chancellor Merkel recently 
announced that Germany seeks a leading role in pioneering 
renewable energy sources, including wind, solar, and 
biomass.  According to the MFA, the EU's current energy 
planning will provide Merkel with a timely platform for 
implementing solid renewables measures during Germany's 
Presidency. 
 
¶7. (SBU) When we asked about calls from Poland and the 
Baltic states for solidarity among EU states in sharing 
supplies in cases of crisis, German MFA officials said these 
proposals were no longer part of EU planning.  The German 
side considered these proposals "confrontational" in 
exaggerating the risks to supply from Russia and others. 
According to an MFA official, private sector agreements 
among EU energy firms have already addressed many concerns 
about reliability of gas and other supplies in case of 
crisis, thus removing the issue from EU member states' 
agenda.  Informally, German officials comment that some EU 
members must play "catch up" in long neglected 
infrastructure investments needed to assure real energy 
security. 
 
¶8.  (U) German officials involved in preparing the June 15- 
16 EU Council said that, aside from the energy issue, the 
Austrian Presidency had produced a rather "thin" agenda for 
EU leaders.  Austria had met major political obstacles to 
its ambitions regarding the issues of EU enlargement and the 
Constitution. 
TIMKEN JR