VZCZCXYZ0019
OO RUEHWEB

DE RUEHVI #1735/01 1651544
ZNR UUUUU ZZH
O 141544Z JUN 06
FM AMEMBASSY VIENNA
TO SECSTATE WASHDC IMMEDIATE 3858

UNCLAS VIENNA 001735 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV AU
SUBJECT: SCENESETTER FOR SECRETARY RICE'S JUNE 21 VISIT TO 
VIENNA 
 
 
¶1.  (SBU) Austrian-U.S. relations have a solid base in the 
common values of democracy and civil rights.  Austria's 
international activities contribute to our shared vision of a 
world of peace, freedom, democracy, and prosperity.  Pursuant 
to a 1955 constitutional law, Austria is neutral. Austria 
holds the rotating Presidency of the EU Council for the first 
half of 2006, giving us the opportunity to work with the 
government at an unusually high level of intensity. 
 
¶2.  (SBU) Within the traditional "honest broker" role of the 
EU Presidency country, Austria has used its chairmanship of 
EU organs to focus attention on the economic and social 
development of the western Balkans.  It is vocally in favor 
of Croatia's EU candidacy.    Vienna stresses its energetic 
engagement with the new member states to the east.  Austria 
has benefited from enlargement, improving both 
competitiveness and productivity.  The Government of Austria 
does not, however, support EU expansion uncritically. 
Looking further down the road, the Austrians can be expected 
to share German and French concerns with regard to 
enlargement beyond the current candidates to Ukraine.  In 
addition, Austria is promoting the U.S.-EU Transatlantic 
Partnership -- particularly the economic aspects -- during 
its presidency.  Austria looks forward to hosting the 
upcoming U.S.-EU Summit. 
 
------------------------------- 
Promoting Democracy and Freedom 
------------------------------- 
 
¶3.  (SBU) Austria is a steady partner in promoting democracy 
in its own backyard and beyond.  Under Chancellor Schuessel, 
Austria has played an active role in advancing freedom and 
stability in Southeastern Europe and favors the region's 
integration with Euro-Atlantic institutions, including NATO 
and the EU.  Austria assumed a EUFOR command in Bosnia in 
November 2005, and the government has placed no caveats on 
the use of its 600 troops in Kosovo and over 300 troops in 
Bosnia.  As EU Council President, Schuessel has facilitated 
progress on status questions in Kosovo and elsewhere, and 
Austrian diplomats are working closely with UN Special Envoy 
Martti Ahtisaari.  Austria has been an outspoken critic of 
the regime in Belarus and was instrumental in ensuring the EU 
adoption of travel bans and asset freezes against Belarusian 
leadership. 
 
¶4.  (SBU) Austria has made modest but noteworthy 
contributions to stability in Iraq.  The Austrian government 
agreed to cancel 80% of Iraqi bilateral debt, an amount about 
roughly equal to 1% of Austria's GNP.  Austrian experts are 
contributing to the development of law enforcement in Iraq by 
training justices and police recruits. Austria has deployed 
police trainers to the Iraqi Police Academy in Jordan. In 
Afghanistan, Austrian soldiers have been deployed to ISAF and 
to Konduz, while a contingent of Austrian staff officers have 
worked in Kabul since February 2002.  In concert with the 
U.S. embassy, the Vienna diplomatic academy sponsored a 
training program on good governance for local administrators 
and NGO representatives from Central Asia. Austria also heads 
a multi-year, multi-million Euro EU program to build up 
democratically-controlled police and border forces in Central 
Asia. 
 
------------------- 
Political Situation 
------------------- 
 
¶5.  (SBU) Chancellor Wolfgang Schuessel's conservative 
Austrian People's Party (OVP) governs Austria in coalition 
with the Alliance for Austria's Future (BZO).  Schuessel, in 
office since 2000, faces parliamentary elections in fall 
¶2006.  He remains personally popular, but his party has lost 
a series of state elections.  However, the opposition Social 
Democrats (SPO), who had led in polls for more than a year, 
have recently fallen behind the OVP because of the fallout 
from a banking scandal involving a bank owned by a labor 
union.  Many observers expect the elections to result in a 
grand coalition of the People's Party and the Social 
Democrats, but a coalition of either of the major parties 
with the Greens is also a possibility. 
 
----------------------------------- 
Economic Prosperity and Development 
----------------------------------- 
 
¶6.  (SBU) Austrian business, especially in the financial 
sector, has delivered real benefits to the area between 
Austria and the Russian border.  Austrian banks, holders of 
nearly a quarter share of the region's banking sector, have 
served as a stabilizing force in part by providing a basis 
for commercial investment and development.  Austrian firms 
seek to have a strong presence in the Middle East.  Austrian 
business has made strides in reestablishing itself in Iraq, 
and the Austrian government opened a small Trade Office in 
Erbil in December.  Austria has traditionally had close 
commercial relations with Iran.  An Austrian arms 
manufacturer sold high-power sniper rifles to Iran in 2005 
before the Austrian government halted further deliveries. 
Iran recently shelved plans to open a large trade center in 
the Austrian state of Burgenland because of start-up 
difficulties. 
 
--------------- 
Security Agenda 
--------------- 
 
¶7.  (SBU) Austria is a strong partner in stemming financial 
flows to terrorists.  The Austrian government has made 
anti-corruption and law enforcement cooperation a cornerstone 
of the presidency.  Austria had previously taken the lead for 
the EU in coordinating law enforcement activities in Central 
and Eastern Europe and Central Asia. 
McCaw