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C O N F I D E N T I A L        BERLIN 02782

SIPDIS
CXBERLIN:
    ACTION: AMB
    INFO:   POL ECON DCM CHRON
CX2BERLN:
    ACTION: AMB
    INFO:   POL ECON DCM CHRON

DISSEMINATION: AMB
CHARGE: PROG

APPROVED: EMIN:RFCEKUTA
DRAFTED: ECON:TELISTON
CLEARED: ECON: DNEUMANN, POL: MMARTIN

VZCZCRLI910
PP RUEHC RUCNMEU RUCNMEM RUCNFRG RUEATRS RUCPDOC
RUEHBS RHMFISS
DE RUEHRL #2782/01 2631644
ZNY CCCCC ZZH
P 201644Z SEP 06
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 5355
INFO RUCNMEU/EU INTEREST PRIORITY
RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUCNFRG/FRG COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 BERLIN 002782 
 
SIPDIS 
 
SIPDIS 
 
EUR/AGS, EUR/ERA, USTR FOR MMOWREY, SDONNELLY 
COMMERCE FOR PENELOPE NAAS 
 
E.O. 12958: DECL: 09/19/2016 
TAGS: ECON ENRG GM PGOV PREL EU
SUBJECT: GERMANY'S EU PRESIDENCY - LOOKING AT THE ECONOMIC 
AGENDA 
 
REF: BERLIN 1993 
 
Classified By: Classified by EMIN Robert F. Cekuta for reasons 1.4(b) a 
nd (d). 
 
¶1. (SBU) The American Chamber of Commerce EU's meetings on 
September 13 and 14 with officials responsible for Germany's 
EU presidential agenda at the Ministry of Foreign Affairs, 
Ministry of Economics and Chancellery provided a 
comprehensive preview of Germany's EU presidency economic 
agenda.  Germany plans to split the focus of its presidency 
into two parts with the first three months concentrating on 
economic and political issues, i.e. economic competition and 
the internal market, in addition to the political agenda -- a 
re-energized Neighborhood Policy, strengthened relations with 
Central Asia, and a new Partnership and Cooperation Agreement 
with Russia -- reported reftel.  Within these two themes, 
Chancellor Merkel intends to focus on better regulation and 
energy.  The second part of Germany's EU presidency will 
focus on moving the EU's constitution forward.  The Berlin 
celebration of the 50th anniversary of the Treaty of Rome 
will kick off Germany's efforts to revisit the question of 
the EU constitution.  According to Dr. Uwe Corsepius, 
Director General for European Policy at the Chancellery, 
Chancellor Merkel intends to work this issue bilaterally with 
EU member states rather than through Brussels.  End Summary 
 
--------------------------------------------- ---- 
The German Presidency - A Presidency in Two Parts 
--------------------------------------------- ---- 
 
¶2. (SBU) The visit of the American Chamber of Commerce EU's 
advocacy group for the EU presidency included meetings with 
officials from various ministries -- MFA, Economic, Finance, 
the Chancellery, Agriculture, and Environment -- responsible 
for formulating Germany's EU presidency agenda.  According to 
officials at the MFA and Chancellery, Germany plans to divide 
its presidency in two parts, the first part focusing on 
economic competition and the internal market; the second part 
focusing on EU constitutional reform.  Dr. Uwe Corsepius, 
Director General for European Policy at the Chancellery, said 
the spring European Council meeting March 8-9 would highlight 
issues falling under economic competition and the internal 
market, namely energy and better regulation.  Germany will 
then use the 50th anniversary celebration of the Treaty of 
Rome, which will take place in Berlin March 25, 2007, to kick 
off the second part of its presidency, which will address 
reforming the EU Constitution.  As German officials envision 
the event, the declaration issued at the Berlin celebration 
will underscore EU values and will focus on what kind of 
European Union leaders envision for the future, laying the 
groundwork for EU constitutional reform. 
 
----------------------- 
Agenda - "Less is More" 
----------------------- 
 
¶3. (SBU) Corsepius said Germany's approach to its presidency 
would differ slightly from other EU presidencies by using the 
principle of "less is more" to guide the formulation of its 
agenda.  Corsepius stated Germany deliberately chose a 
limited number of topics where heads of state can play an 
active role and actually make decisions, rather than going 
down the road where issues are discussed by a cast of 
thousands with nothing coming to fruition.  By limiting the 
agenda items and access, the German government hopes heads of 
state can achieve substantive results in Council meetings. 
 
--------------------------------------------- ----- 
Economic Priorities - Energy and Better Regulation 
--------------------------------------------- ----- 
 
¶4. (SBU) Officials at each ministry stressed the importance 
Germany places on energy as part of its focus on internal 
market issues.  Corsepius noted that Germany, until recently, 
had approached energy policy as exclusively a national 
sovereignty issue.  However, the German government has 
recently come to see a need to deal with certain aspects of 
energy policy in a broader EU context.  Corsepius said there 
are some areas where legislation/regulation at the EU level 
dealing with energy security would make sense.  Other areas 
he mentioned for possible EU-level cooperation are energy 
efficiency, renewable energy sources, non-CO2 emitting 
engines, and energy market competition.  (Note: Although 
guarded in his overall assessment of what Germany can 
realistically achieve in terms of deliverables for the 
U.S.-EU Summit, Corsepius mentioned renewables as an area 
where the U.S. and EU could make "progress, even if it's only 
a small amount."  End Note.)  He stated Germany is preparing 
an energy strategy to be issued in March 2007, and there will 
be a review of energy policy in March at the European Council 
meeting. 
 
¶5. (SBU) Germany plans to address the EU internal market in 
the context of globalization and investment, according to 
Peter Tempel, MFA's Director General of European Policy, and 
to State Secretary Joachim Wuermeling, who handles Germany's 
EU presidency at the Ministry of Economics.  Both officials 
stressed Germany would, through its presidency, take the 
opportunity to convince a skeptical public of the benefits of 
globalization, with Tempel noting that officials realize EU 
can only play an equal role on the world stage if it can 
compete economically.  Therefore, officials stressed the 
importance of Germany communicating an EU strategy for 
globalization.  This effort means actively engaging on topics 
like innovation, competition and working to fulfill the goals 
set out in the Lisbon Agenda. 
 
¶6. (SBU) Better regulation is the linchpin to achieving more 
competition, innovation and sustained economic growth, 
according to officials in all AmCham EU's meetings with the 
various ministries.  Chancellery officials noted Germans had 
a general feeling of over-regulation and lack of 
understanding of what Brussels does that benefits them.  In 
order to win back citizens' trust, Germany wants to reexamine 
the level and costs of EU regulation on its citizens and 
economy, using Germany's own initiatives in this area as a 
guide.  Corsepius suggested that these efforts would include 
looking at how to manage better information costs, i.e., what 
information could be harmonized and electronically 
catalogued.  However, he acknowledged that making substantive 
changes -- "getting beyond nice speeches" -- would prove a 
challenge. 
 
----------------------------- 
Constitutional Reform Efforts 
----------------------------- 
 
¶7. (SBU) The EU constitutional reform efforts will be the 
focus of the second half of Germany's EU presidency.  German 
officials see the presidency as an opportunity to lead the 
debate on the future of the EU, with constitutional reform 
playing a central role in this process.  According to 
Corsepius, Germany's efforts to tackle one of the EU's most 
complex issues are best served by a "capital-based approach." 
 In other words, rather than allowing EU institutions into 
the decision making process, members need to keep discussions 
government-to-government. 
 
----------- 
Intangibles 
----------- 
 
¶8. (SBU) German officials admit events beyond Germany's 
control, i.e., elections in other member states or a crisis 
in the Middle East, can easily hijack Germany's agenda for 
its EU presidency.  Officials also attempted to draw a clear 
line between the EU presidency and Germany's G-7/8 
presidency; while admitting maintaining parallel presidencies 
would prove challenging.  According to State Secretary 
Wuermeling, Germany's goal is to have EU and G-8 issues 
complement, rather than contradict each other.  Wuermeling 
pointed to IPR, innovation, energy and demand for raw 
materials as examples of Germany's efforts to put forth 
complementary issues in both fora. 
 
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Comment 
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¶9. (C) Germany's agenda for the EU presidency is shaping up 
to be a bifurcated one -- one with a clearly defined, yet 
limited number of issues on the economic or technical front 
and another which is decidedly ambitious, though ambiguous, 
in its attempt to restart the EU's constitutional reform. 
Germany sees the EU presidency as an opportunity to put its 
stamp on how the EU addresses globalization and competes in 
the world market.  The German government thinks that by 
keeping its economic agenda focused on a limited number of 
key, globalization-related issues, it can achieve tangible 
results.  Germany, the top global goods exporter, has clearly 
reaped the benefits of globalization, even while its 
government has not effectively conveyed a clear, positive 
message to the public on why they need to embrace 
globalization.  It needs to get out the message that EU 
countries can excel through participating in and shaping this 
economic system.  While German officials try to keep 
expectations low for what its presidency will accomplish on 
the economic front, Germany nonetheless wants to try to get 
the constitutional process back on track, using the 
anniversary of the Treaty of Rome to jump-start efforts. 
Beyond issuing a declaration at the Treaty of Rome 
celebration, German officials, however, have yet to express a 
clear vision on how they plan to move the constitutional 
reform process forward.  Convincing EU member states to begin 
taking another look at EU constitutional reform during the 
first half of 2007 -- at a time when key European countries 
will be holding elections -- could prove too ambitious. 
TIMKEN JR