VZCZCXRO2435
PP RUEHAG
DE RUEHAG #0058/01 2282034
ZNR UUUUU ZZH
P 162034Z AUG 07
FM AMCONSUL HAMBURG
TO RUEHC/SECSTATE WASHDC PRIORITY 0174
INFO RUEHRL/AMEMBASSY BERLIN PRIORITY 0161
RUEHTU/AMEMBASSY TUNIS PRIORITY 0003
RUEHIT/AMCONSUL ISTANBUL PRIORITY 0003
RUEHVB/AMEMBASSY ZAGREB PRIORITY 0009
RUEHMIL/AMCONSUL MILAN PRIORITY 0001
RUEADWD/HQDA WASHINGTON DC
RUEHAG/AMCONSUL HAMBURG 0194

UNCLAS SECTION 01 OF 03 HAMBURG 000058 
 
SIPDIS 
 
DEPARTMENT PLEASE PASS TO CODEL COSTELLO. 
DEPARTMENT FOR H /MARK SMITH AND EUR/AGS. 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: OREP PREL PRGOV ECON GM
SUBJECT: HAMBURG, GERMANY: SCENESETTER FOR CODEL COSTELLO 
 
REF: STATE 107590 
 
¶1. (U) Consulate General Hamburg warmly welcomes Congressman 
Jerry Costello and his delegation to Hamburg, Germany August 
24-27.  The U.S. has had a strong relationship with the Free and 
Hanseatic State of Hamburg for almost 220 years.  Commissioned 
in 1790, ConGen Hamburg has been working to foster U.S. - German 
relations and trade.  Your visit will further this on-going 
cooperation, particularly in the areas of airport and harbor 
security.  Your appointments will include a visit to Lufthansa 
Technik's Hamburg headquarters and facilities, a tour of the 
Port of Hamburg with representatives of the Hamburg Harbor 
Police and the U.S. Department of Homeland Security's (DHS) 
Container Security Initiative (CSI), and a discussion with 
HOCHTIEF Airport and Hamburg Airport representatives on the 
recent privatization of the facilities.  ConGen Hamburg is also 
pleased to host a reception for the delegation with members of 
the German Parliament, state parliaments, interior ministry 
representatives, law-enforcement officials (harbor police, 
police, customs) and representatives of U.S. and German 
companies in the shipping, transport, and aerospace sectors. 
 
GERMANY: POLITICAL AND ECONOMIC OVERVIEW 
 
¶2. (U) After nearly two years in office, Chancellor Angela 
Merkel's grand coalition between her own party, the 
right-of-center Christian Democratic Union (CDU, joined by its 
Bavarian sister party the Christian Social Union, or CSU), and 
the left-of-center Social Democratic Party of Germany (SPD) is 
in good shape and seems likely to survive until its four-year 
term expires in 2009.  Chancellor Merkel's consensus-style 
leadership keeps a lid on tensions between the two parties, 
Germany's largest and traditional opponents, and wins her high 
ratings in public opinion polls.  She is a strong advocate of 
close ties with the United States, and bilateral relations have 
improved since she took office in November 2005.  This positive 
cooperation was particularly noticeable in the outcomes of the 
U.S.-EU Summit in April in Washington and the G8 Summit which 
was hosted in June in the Northern German town of Heiligendamm. 
Among the German people, however, skepticism towards the United 
States over the invasion of Iraq, climate change, 
counter-terrorism, NATO cooperation in Afghanistan and other 
issues remains high. 
 
¶3. (U) The German economy in 2006 had its best year since 2000. 
Its GDP grew 2.7 percent, and economists are predicting growth 
of over 2 percent in 2007 and 2008.  Tax revenues are up and the 
government's budget deficit is now well within the European 
Union's "Maastricht criteria" (3 percent of GDP).  Business 
confidence is high.  Employment is increasing and some employers 
complain of a shortage of skilled workers.  Unemployment 
continued to drop over the summer months to 8.9 percent in July, 
seasonally adjusted, and economists now forecast annual 
unemployment of 8.7 percent in 2007.  (Unemployment is still 
nearly twice as high in the states of the former GDR, however, 
and long-term unemployment also remains high in the Ruhr and 
some other parts of western Germany where old smoke-stack 
industries have shut down in the face of global competition.) 
German companies have cut costs, and labor productivity per 
capita rose 1.8 percent in 2006.  Germany's trade unions feel 
they might be regaining political and economic power and after 
years of wage restraint are again demanding higher pay. 
Although unions only represent about 25 percent of German 
workers, union contracts cover 65 percent of the workforce. 
 
WORLD LEADER IN AIRCRAFT REPAIR AND MAINTENANCE 
 
¶4. (U) Lufthansa Technik, which is headquartered in Hamburg, is 
the world leader in the repair and maintenance of commercial 
aircraft, their engines, and their components.  The company has 
bases at every major airport in Germany, as well as 50 others 
world wide. Lufthansa Technik is certified not only as a 
maintenance, repair and overhaul services (MRO) provider and 
design organization but also as a manufacturer of aircraft 
parts.  The company boasts a wide array of experts as well as 
repair services for over 50 different types of commercial and 
private aircraft.  U.S.-based airlines such as United Airlines 
and American Airlines use Lufthansa Technik for their aircraft 
maintenance and repair.  With the growth of air travel over the 
last few years, Lufthansa Technik has expanded to meet market 
demand and the company has been able to further strengthen its 
leading position in the MRO sector.  In 2006, Lufthansa 
Technik's revenues increased by 294 million euros (+ 9.4 
percent) to 3.4 billion euros compared to 2005.  On August 25, 
you will tour the Hamburg facilities, which are attached to the 
Hamburg Airport. 
 
 
HAMBURG 00000058  002 OF 003 
 
 
GERMANY'S PORT TO THE WORLD 
 
¶5. (U) The port of Hamburg was first founded on May 7, 1189 
through a charter in which the Emperor Friedrich Barbarossa 
secured privileges for the people of Hamburg such as duty-free 
passage on the lower Elbe river as far as the North Sea and the 
right to hold markets.  Over 800 years the port has developed 
into the central hub for trade with Eastern and Northern Europe. 
 It is the second largest container port in Europe and currently 
is the seventh largest in the world.  Despite its location 120 
km from the sea, the port is capable of handling the largest 
container ships in the world.  The port, which covers over 7,000 
hectares, handled 134.9 tons of total cargo in 2006 - an 
increase of 7.3 percent from the previous year.  Not only is 
Hamburg the largest German seaport, it is also the port of 
registry for half of the German fleet and the head office of 
numerous German shipping companies.  Many foreign shipping 
companies also have branches here.  The city of Hamburg has 
extensive plans to further develop the port's infrastructure and 
bring it closer to the everyday lives of the city's citizens. 
Your program's tour of the Port of Hamburg will not only provide 
an up-close observation of trade activities within the port but 
also the opportunity to discuss with the Superintendent of 
Hamburg's Harbor Police and his staff the implementation of 
International Port Security Codes and the monitoring of 
container shipments.  CSI representatives will also brief you on 
their cooperation with German customs officials in the screening 
of all U.S. bound containers. 
 
¶6. (U) DHS's Container Security Initiative was developed by U.S. 
Customs, now U.S. Customs and Border Protection (CBP), in the 
aftermath of the terrorist attacks of September 11.  The primary 
purpose of CSI is to protect the global trading system and the 
trade lanes between CSI ports and the U.S.  Under the CSI 
program, a team of officers is deployed to work with host nation 
counterparts to target all U.S.-bound containers that pose a 
potential threat for weapons of mass destruction (WMD).  In 
Germany, CSI teams have been stationed at the ports of Hamburg 
and Bremerhaven since early 2003.  Currently, seven permanent 
and three temporary staff (consisting of eight CBP officers, one 
intel analyst, and one special agent) are embedded with German 
customs (Zoll) counterparts at these locations.  Maritime 
freight transiting German seaports is considered a heightened 
threat due to historical use of Germany as a logistical base by 
international terrorist organizations.  Specifically, the 
al-Quds mosque in Hamburg was a meeting place for the "Hamburg 
Cell", which included three 9/11 suicide pilots and supporting 
members.  Recent arrests and investigations have shown that 
al-Qaida and various other trans-national terrorist 
organizations maintain active interest in Northern Germany.  It 
is the goal of CSI Germany to detect, deter, and disrupt 
exploitation of maritime shipping infrastructure to support, 
facilitate, or conduct a terrorist attack via container 
shipments transiting the ports of Hamburg and Bremerhaven. 
 
¶7. (U) In the evening of August 25, you will have the 
opportunity to meet with German parliamentarians, who sit on the 
Bundestag's transportation committee as well as local 
politicians who work in the transport and infrastructure field 
for a relaxed exchange of ideas at a Consulate-hosted reception. 
 We have also invited representatives from Hamburg's Interior 
Ministry, customs, (harbor) police as well as U.S. and German 
companies in the shipping, ship-building, transportation, and 
aerospace industries.  The companies regularly trade with the 
United States and their leadership has expressed keen interest 
in our new shipping regulations, such as 100 percent screening, 
as well as programs such as CBP's Custom-Trade Partnership 
Against Terrorism (C-TPAT). 
 
HAMBURG AIRPORT: AN EXAMPLE OF A SUCCESSFUL PUBLIC-PRIVATE 
PARTNERSHIP 
 
¶8. (U) Prior to your departure on August 27, you will visit one 
of Germany's oldest airports, the Hamburg Airport, which was 
partially privatized in 2000.  The airport has become an example 
for a successful public-private partnership.  49 percent of the 
airport's stock is held by Aer Rianta International (9.8 
percent), HOCHTIEF AirPort (26.1 percent) and the HTAC 
investment partnership (13.1 percent).  The HTAC stake is 
managed by HOCHTIEF AirPort (HTA).  The City of Hamburg has 
retained a 51 percent interest.  The airport is currently 
undergoing extensive modernization.  In May 2005, the new 
Terminal 1 was opened and construction is expected to be 
completed in 2008 on a shopping plaza (Airport Plaza) that will 
link the two passenger terminals and contain a local rail 
station.  With more than 10 million passengers every year 
 
HAMBURG 00000058  003 OF 003 
 
 
Hamburg Airport ranks as Germany's fourth-largest airport and in 
2006 the airport reported a 12 percent growth rate.  Over 72 
airlines offer flights from Hamburg, including Continental's 
direct flight to Newark and Emirates' flight to JFK.  The 
companies based at the airport employ more than 13,000 people 
and generate 1.5 billion euro every year. 
 
SUNDAY EXCURSION TO LUEBECK 
 
¶9. (U) On Sunday we will visit the Hanseatic city of Luebeck on 
the Baltic Sea coast.  Luebeck was founded in 1143 and was for 
several centuries the "capital" of the Hanseatic League. 
Because of its brick gothic  architectural heritage Luebeck is 
on UNESCO's list of World Heritage Sites.  Much of the old town 
has kept a medieval look with old buildings and narrow streets. 
The town once could only be entered by passing one of four town 
gates, of which two remain today, the well-known Holstentor 
(1478) and the Burgtor (1444).  The old town center is dominated 
by seven church steeples.  The oldest ones are the Luebecker Dom 
(the city's cathedral) and the Marienkirche (Saint Mary's), both 
from the 13th and 14th centuries.  Luebeck is very famous for 
its excellent marzipan industry, and according to local legend, 
marzipan was first made in Luebeck possibly in response to 
either a military siege of the city, or a famine.  According to 
local legends, the town ran out of all foods except stored 
almonds and sugar, and used these to make loaves of marzipan 
"bread". 
 
¶10. This message has been coordinated with Embassy Berlin. 
 
 
 
 
LIBONATI 
BUTCHER