VZCZCXRO5050
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTH #0462/01 0640930
ZNR UUUUU ZZH
P 050930Z MAR 07
FM AMEMBASSY ATHENS
TO RUEHC/SECSTATE WASHDC PRIORITY 8313
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHIK/AMCONSUL THESSALONIKI PRIORITY 0922
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 ATHENS 000462 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
COMMERCE FOR DAS DYCK; AID FOR DAA MEFFORD 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PTER PHUM ENRG ECON GR
SUBJECT: SCENESETTER FOR U.S.-GREEK ECCC MEETING MARCH 12 
 
REF: A) THESSALONIKI 19 B) THESSALONIKI 16 
 
ATHENS 00000462  001.2 OF 002 
 
 
¶1.  SUMMARY:  U.S. Embassy Athens warmly welcomes DAS Bryza, 
USDOC DAS Dyck and AID DAA Mefford's March 12 visit to 
participate in the 2007 meeting of the U.S.-Greek Economic 
and Commercial Cooperation Commission (ECCC).  The visit 
offers an opportunity to strengthen our "strategic 
partnership," not only on economic but also on political 
issues.  With GOG officials shifting focus to the upcoming 
Greek general elections, the ECCC itself and side meetings 
will allow us to advance our economic interests as well as 
underscore the importance of continued progress on energy 
security, counter-terrorism, and stability both in the 
Balkans and in the region.  On most of these issues, the 
Karamanlis government has demonstrated its (quiet) 
willingness to work with us.  END SUMMARY. 
 
POLITICAL CONTEXT:  WORKING WITH THE KARAMANLIS GOVERNMENT 
 
¶2.  Politicians are gearing up for elections this year, with 
analysts predicting they will be held either in the late 
spring or early fall.  Karamanlis' center-right New Democracy 
government holds a small but steady lead in the polls, asking 
voters to judge its "reform" agenda.  This agenda has 
affected not only domestic issues (like the education 
system), but also the GOG's approach to foreign affairs.  As 
a result, the Karamanlis government has been quietly willing 
to work with us -- even if it still pref%rs to a6oid dra7ing 
public attention to it*Q 
 
¶3.  That has been true in Afghani3tan, Where the GOG is 
providing an engineering and med)cal unit (recently pledging 
increased fifancial s5pport).  While debilitating caveats onQ 
m/vement outside Kabul re-ain, 5e co.ti.ue to press the GOG 
to lift them.  It has also been true in Iraq, where Greece 
has provided funding for the NATO training mission as well as 
equipment and supplies.  Greece's 2-year tenure on the UNSC 
provided a useful platform to leverage Greek support for 
Lebanon as well as the P5   1 efforts with Iran.  In response 
to recent Russian threats against the Czech Republic and 
Poland, the MFA spokesman made a statement criticizing 
Russian rhetoric that went far beyond those of other EU 
capitals. 
 
¶4.  Growing Greek investment in the Balkans means that rule 
of law, economic stability, trafficking in persons and 
democratization in the region are now on the GOG's radar 
screen in a serious way, and the Karamanlis government has 
put its money where its mouth is.  On Kosovo, while the GOG 
carries some Serbian interests in EU deliberations, FM 
Bakoyiannis has stressed (both to us and to her staff) that 
Greece will not veer from EU policy on the Ahtisaari plan. 
Macedonia's name remains an irritant, although GOG officials 
assure us that they hold to the 1995 "Interim" agreement that 
Greece will not block the country's entry into NATO/EU 
structures as "FYROM."  And, as was evident during the recent 
visit by Cypriot President Papadopoulos, there are more 
differences in perspective between Athens and Nicosia than 
there have been for some time. 
 
¶5.  Following the January 12 RPG attack on the Embassy, FM 
Bakoyiannis and MPO Polydoras demonstrated that the GOG 
recognized it as an attack not only on the U.S., but also on 
Greece.  Cooperation with GOG authorities has been collegial 
and well-resourced, although endemic press leaks have not 
helped the investigation and progress is slow.  The 
Karamanlis government also recognizes that the RPG attack 
makes achieving one of its own goals -- participation in the 
Visa Waiver Program -- harder to achieve. 
 
KEY ISSUES FOR THE ECONOMIC AND COMMERCIAL COOPERATION 
COMMISSION 
 
¶6.  Greece's eagerness to hold 2007 meeting of the U.S.-Greek 
Economic and Commercial Cooperation Commission (ECCC) is a 
direct expression of Foreign Minister Bakoyiannis' commitment 
to enhanced U.S.-Greek bilateral relations.  Our goal:  to 
intensify the economic portion of our "strategic 
partnership."  In many key areas of interest to the U.S., 
Greece has the ability to punch above its weight -- energy, 
the fight against money laundering, promoting stability in 
the Balkans.  While we already cooperate with Greece on these 
issues, there is potential to do much more.  Equally 
importantly, the GOG is looking to the U.S. for ideas on how 
it can use its new muscle effectively.  Finally, Greece's 
interest in attracting U.S. investment gives us a lever to 
push for greater transparency and openness in the Greek 
economy. 
 
ATHENS 00000462  002.2 OF 002 
 
 
 
¶7.  The ECCC will focus on four issues.  The first is energy. 
 Greece is expanding its role as a transit country for both 
oil and gas.  In oil, it is finalizing the intergovernmental 
agreement with Russia and Bulgaria on the 
Burgas-Alexandroupolis oil pipeline  -- potentially the 
second major Bosphorus bypass pipeline after Baku-Ceyhan.  In 
gas, Greece is a key player for TGI, the first pipeline that 
could bring Caspian gas supplies directly to Europe, 
increasing European energy security.  As these projects go 
forward, we want to ensure a level playing field for U.S. 
companies.  The ECCC will be an opportunity to keep the GOG 
committed to reserving TGI capacity for Caspian gas, and to 
urge the GOG to facilitate participation of U.S. firms in 
Burgas-Alexandoupolis. 
 
¶8.  The second key issue is the fight against money 
laundering and terror finance.  Strong Greek performance is 
essential, particularly as Greek banks have increased their 
investment in the Balkans.  We understand that a recent 
Financial Action Task Force review of Greece revealed that 
the Greek financial intelligence unit (FIU) is simply not up 
to the task of tracking illegal financial flows.  The GOG is 
supposed to receive the first draft of the FATF report (NOTE: 
 which the U.S. is supposedly not privy to) the week of March 
¶5.  This should mean that the GOG is aware of the seriousness 
of this issue to the international community. 
 
¶9.   The third key issue is the impediments U.S. firms face 
doing business in Greece.  The GOG currently requires far 
more paperwork from U.S. bidders on government tenders than 
do other EU member states.  As a solution, we should 
recommend that the GOG identify and adopt "best practices" 
used by other EU countries which do not disadvantage U.S. 
companies.  U.S. pharmaceutical companies face a separate 
obstacle.  The GOG frequently pays its bills late, and 
currently owes these firms millions of dollars.  During the 
ECCC, we look for a reasonable proposal from the GOG to 
address this problem. 
 
¶10.   The fourth key issue is IPR.  Greek performance has 
improved greatly over the past year.  The GOG set up an 
effective public-private IPR working group and has also 
conducted judicial training.  However, the Greek judiciary 
remains loath to impose any sentences on IPR violators.  We 
will need to underscore that we continue to expect progress 
on sentencing, which will require on-going GOG engagement. 
 
GETTING THE NORTHERN PERSPECTIVE 
 
¶11.   In northern Greece, there is renewed interest (and 
sensitivity) about Muslim/Turkish minority issues.  FM 
Bakoyiannis visited Thrace February 5-7, announcing a series 
of measures aimed at meeting some key Muslim demands 
(reftels).  The measures include giving Muslims more direct 
control over management of charitable foundations and 
reducing the taxes they owe; restoring Greek citizenship to 
"stateless" Muslims; hiring 240 imams as civil servants; and 
possibly establishing a 0.5 percent Muslim quota for Greece's 
civil service.  Thrace Muslims initially welcomed the 
measures, but subsequently complained about continued GOG 
control over the appointment of muftis, continued 
restrictions on the ability of Thrace groups to call 
themselves "Turkish," and lack of aid to Thrace farmers. 
 
¶12.  Congen Thess has been engaged in efforts to help Thrace 
farmers find a replacement crop for tobacco, and understands 
that EB supports post's request for a Business Facilitation 
(BCIF) grant to support this effort.  Other issues of 
bilateral interest include TIP, illegal immigration, and 
narcotics.  ConGen Thess is organizing an April 11-13 seminar 
on trans-border cooperation for law enforcement officials 
from seven countries of the region, including Greece, 
Macedonia, Turkey, Bulgaria, Moldova, Romania and Albania in 
Alexandroupoli.  To help promote American investment, 
Ambassador will give a previously-scheduled speech on the 
evening of March 12 on the obstacles and opportunities faced 
by foreign investors in Greece. 
 
RIES