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S E C R E T SECTION 01 OF 04 BUCHAREST 000902 
 
SIPDIS 
 
C O R R E C T E D  C O P Y  (CLASSIFICATION) 
 
SIPDIS 
 
NSC FOR DEPUTY NSA J.D. CROUCH, D.WILSON 
STATE DEPT FOR EUR - MARK PEKALA, EUR/NCE - WILLIAM 
SILKWORTH 
 
E.O. 12958: DECL: 05/31/2016
TAGS: ECON ETRD MARR MOPS NATO PGOV PHUM PREL RO

SUBJECT: SCENESETTER FOR DEPUTY NATIONAL SECURITY ADVISOR J.D. CROUCH'S VISIT TO ROMANIA

REF: BUCHAREST 519BUCHAREST 00000902 001.2 OF 004

Classified By: Ambassador Nicholas Taubman for Reasons 1.4 A, B and D

¶1. (C) Summary. Embassy Bucharest warmly welcomes your upcoming visit to Bucharest. Your participation at the June 5 "Black Sea Forum for Dialogue and Partnership Summit" is a tangible sign of USG support for Romania's aspirations to promote regional efforts to strengthen democratic institutions, diversify energy sources, and combat asymmetric transnational threats such as TIP and narcotics trafficking. Romania seeks U.S. leadership in bringing greater stability and prosperity to the Black Sea region, a point that President Traian Basescu has repeatedly stressed, both in meetings with U.S. interlocutors and in public remarks. (Reftel) A staunch ally in the global war on terrorism (GWOT), Romania has signed, and should ratify soon, a defense cooperation agreement which will permit U.S. forces "access to and use of" Romanian military facilities for a broad range of activities. Romania is on track for EU accession in January 2007, but a recent European Commission report delayed until autumn a final decision on Romania's entry date. End Summary.

Romania's Vision for the Black Sea Region

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¶2. (C) Promoting greater regional security in the wider Black Sea region has been among the most prominent items on President Traian Basescu's foreign policy agenda. Basescu strongly advocates an increased U.S., NATO and EU role in the Black Sea region as a way of linking Europe proper to unstable regions further east. Basescu and his senior advisers consider frozen conflicts in the Caucasus and in neighboring Moldova/Transnistria as a prima facie reason for a stabilizing Western role in the region. Romanian officials have also cited security challenges along the Black Sea littoral, including trafficking in narcotics and persons and smuggling. Although Bucharest's initial emphasis on Black Sea matters focused on defense and security matters, at U.S. urging the GOR's focus has shifted since last fall toward a broader approach that includes encouraging democratic transformation and economic cooperation in the region. Toward that end, Romania has increased its dialogue with Black Sea littoral neighbors, including Russia and Turkey. Romania favors an extension of NATO's Operation Active Endeavor (OAE) into the Black Sea region, but recognizes that OAE extension is very unlikely if Turkey continues to oppose it. Romania strongly opposes any expansion of the mandate of BLACKSEAFOR to include counterterrorist activities. However,

Romania has not excluded the possibility of cooperation with a Turkish-led Black Sea Harmony, providing any cooperation entailed transparent and comprehensive information exchange with NATO.

¶3. (C) Last summer, Romania proposed the "Black Sea Forum for Dialogue and Partnership Summit" on June 5 as a launching pad for a process of dialogue and partnership among Black Sea states, the U.S. and the EU. The forum focuses on "soft security" concerns such as promoting democratic governance, economic development and environmental protection. It will produce a "Joint Declaration" by "heads of state or government" from the Black Sea area. Your participation at the June 5 forum is a tangible sign of USG support for Romania's efforts to strengthen dialogue and cooperation in the wider Black Sea region. Indeed, Romania views active U.S. support for the Forum as pivotal to the event's success.(Reftel)

A Reliable Ally in the GWOT

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¶4. (SBU) Romania has been a staunch ally in both words and deeds in the global war on terrorism (GWOT), providing troops in both Afghanistan and Iraq and consistently promising to keep Romanian troops in both those countries. About 2000 Romanian troops are presently deployed abroad, including more than 1500 soldiers in Afghanistan and Iraq and more than 200 soldiers and gendarmes in the Balkans.

¶5. (C) President Basescu has repeatedly underscored the centrality of Romania's strategic alliance with the U.S. and senior Romanian leaders, including the President and Prime Minister Calin-Popescu Tariceanu, fully support a U.S. military presence on Romanian soil. Indeed, in December 2005, Secretary Rice and Foreign Minister Razvan-Mihai Ungureanu signed a defense cooperation agreement which will permit U.S. forces "access to and use of" Romanian military facilities for a broad range of activities, including training, transit, staging and deploying of forces materiel, and prepositioning of defense equipment. Chamber of Deputies has approved the agreement and Defense and Foreign Relations Committees have both recommended ratification by the full Senate, which happen as early as June. Romania is a dedicated NATO member, fully committed to developing niche capabilities and serving as a role model and guide to aspirant NATO members in the region. Romania has been actively involved in regional organizations, such as the Southeast Europe Cooperation Initiative (SECI) and the Stability Pact for Southeast Europe.

Sights Set on EU Membership in 2007

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¶6. (C) EU accession in January 2007 is Romania's number one foreign policy priority. The European Commission,s May 16 monitoring report gave Romania a conditional green light for accession to the European Union on January 1, 2007. Most significantly, the government's fight against corruption was rewarded in the report by downgrading corruption from a serious concern that could have delayed Romania's EU entry until 2008. However, the report did not fix the date for EU accession, thus keeping Romanians on their toes until October. The only remaining "red card" concerns cited in the report were technical issues in agriculture and VAT collection which most observers believe Bucharest will be able to satisfactorily address by this fall. If so, Romania will almost certainly join the EU in 2007. In your meetings with GOR officials, you should congratulate them on Romania's favorable EU report - but urge them to stay the course in the battle against corruption.

¶7. (S) Romania's largely bipartisan foreign policy and security goals stand in marked contrast to the country's domestic politics, which remain opaque and to some degree unpredictable. The effectiveness of the center-right government coalition is diminished by chilly, even hostile relations between President Traian Basescu and Prime Minister Calin-Popescu Tariceanu. Most observers expect Tariceanu to survive in office at least through the next EC report. But Basescu has reportedly already floated the notion of removing Tariceanu with the opposition Social Democratic Party (PSD), but refrained from moving forward due to likely opposition from Brussels at this critical juncture in the EU accession process.

At the same time, the PSD remains embroiled in its own infighting and corruption scandals, the most notable being the resignation in March of former PM Adrian Nastase from his position as Chamber of Deputies president following revelations of his highly suspicious property deals alleged money laundering.

Avian Influenza

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¶8. (C) The recent outbreak of Avian Influenza (AI) Bucharest and around the country has galvanized the of Romanians and exacerbated tensions in the ruling coalition, with President Basescu criticizing Prime Minister Tariceanu and Minister of Agriculture Flutur of poor leadership and a failure to identify the cause of the outbreak. While the root causes remain unknown, the outbreak has been traced to malfeasant behavior in two commercial poultry farms in Brasov County, where plant managers attempted to cover up an earlier outbreak. Post believes that central authorities reacted quickly and transparently. USAID is providing $2.4 million in assistance to the GOR for public health and animal husbandry education campaigns, diagnostic and protective equipment, and pandemic management training.

International Adoptions

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¶9. (C) Romania's EC-imposed ban on international adoptions - and failure to process roughly 200 pending adoption cases for American parents - remains a sharp irritant in our bilateral relationship. Basescu has privately promised at various points to resolve at least some of the cases once the EC sets a definite date for accession. However, the EC's deferral of this decision until the fall has postponed prospects once again for further action by the GOR with regard to the pending cases. At the same time, it has become apparent that there are serious flaws in the 2005 law that imposed the ban.

A recently released report by a respected NGO, Mental Disabilities Rights International (MDRI), revealed harsh conditions for abandoned children in a hospital in Braila, a situation MDRI claims is duplicated at other institutions across the country. The Embassy has also seen such conditions, as well as substantial numbers of babies warehoused in hospitals for prolonged periods. Basescu and Tariceanu both assert that Romania can take care of its own abandoned children. Evidence is building, however, that it cannot. You may wish to urge Basescu and Tariceanu to process the pending cases in favor of U.S. parents when it is in the best interests of the children involved; and to work to correct the serious flaws in the 2005 law.

Energy

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¶10. (C) Romania, once a net exporter of energy products, now produces 40% of its domestic oil consumption and 60% of its gas needs, and the rates are decreasing each year. While oil imports are based on trades at the international oil boards,

Romania imports nearly all gas from Gazprom through two main middlemen agents, WIEE and Conef. WIEE is a 50/50 joint venture between the German firm Wintershall and Gazprom, while Conef is a subsidiary of Marco International. Though headquartered in Switzerland, Marco International is allegedly controlled by Russian businessman Vitaly Mashytsky.

11.(C) While Romania has sought a greater role in European hydrocarbon distribution for some time, the January Russia-Ukraine energy crisis has refocused attention on the need for energy security and a diversification of source. As envisioned, both the Nabucco gas pipeline and the Pan European Oil Pipeline would pass over Romanian soil, potentially providing a "southern corridor" alternative to Russian imports. However, Russia is moving quickly to solidify its presence in Romania, as demonstrated by the visit of Gazprom Vice Chairman Alexander Medvedev to Bucharest on May 15 to finalize the extension of Romania's gas import agreement from 2009 to 2030. The new agreement substantially increases Conef's role in gas imports to roughly 10 percent of the market. Medvedev also announced Gazprom's intention to enter into a joint venture with state-owned Romgaz to construct an 800 million cubic meter gas storage facility in Romania and to participate in Romgaz's eventual privatization. You may wish to explore Romania's energy security strategy in meetings with senior government leaders.

Boosting Trade Ties

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12.(SBU) Finally, while most elements of our relationship are exemplary, there is still room for improvement in the commercial and economic sphere. While many American companies are in Romania and doing well (Hewlett Packard has transferred much of its European customer support operations to Bucharest) and the GOR has improved the overall business environment, transparency has not permeated the system. Only after one year of delays and political maneuvering has the GOR made good on its contract with Bechtel for the Transylvania Motorway, settling its arrears and paying the contractual advance on May 29. Many businesses complain of a lack of consultation on major government decisions that affect their economic health. Some ministries, and particularly the Ministry of Economy and Commerce, routinely ignore provisions of Romanian law that require 30 days of public notice and comment before legislation can take effect.

13.(SBU) Your visit is an opportunity to encourage the GOR to work more closely with American investors and their representatives, such as the American Chamber of Commerce in Romania, on improving the overall business climate. It is also an opportunity to encourage Romania to stand up for its interests within the European Union. For instance, the GOR is under strong pressure from the Commission to eliminate GMO seed cultivation. Romania is the largest grower of GMO crops in Europe.

Welcome Back Dr. Crouch

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14.(C) In sum, Basescu and the Romanian government are greatly looking forward to your return to focus on one of the GOR's core foreign policy objectives - to increase international engagement and coordination on the Black Sea basin. You are remembered well as U.S. ambassador during the period in which Basescu and the Tariceanu government first came to power. Your presence at this symbolically important juncture will similarly be appreciated and linked to our broader - and still deepening - strategic partnership.

¶15. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest

TAUBMAN