VZCZCXYZ0009
OO RUEHWEB

DE RUEHPG #0347/01 0920832
ZNR UUUUU ZZH
O 020832Z APR 07
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8834
INFO RUEHUP/AMEMBASSY BUDAPEST 0593

UNCLAS PRAGUE 000347 
 
SIPDIS 
 
SIPDIS 
 
H PASS FOR CODEL LOWEY 
FROM AMBASSADOR GRABER 
 
E.O. 12958: N/A 
TAGS: OVIP PREL PGOV ECON EZ
SUBJECT: SCENESETTER FOR CODEL LOWEY'S VISIT TO PRAGUE APRIL 5 
 
 
¶1.  I look forward to welcoming Codel Lowey to Prague on April 5. 
In anticipation of our luncheon discussion at my residence, I offer 
some background information in this scenesetter. 
 
¶2.  Seventeen years after the Velvet Revolution, the Czech Republic 
is today a stable and rapidly developing country.  The economy has 
grown at 6% for the past two years and is fueled by healthy export 
and foreign investment.  Inflation is low and the country intends to 
adopt the euro in 2012.  The current center-right government has an 
ambitious agenda to lower taxes and tackle overdue reforms in health 
care and pensions, although it remains to be seen if they will be 
able to overcome political opposition to these reforms.  Many U.S. 
companies are active in the country.  While most are very satisfied 
with the business climate, the country is hampered by a prevalence 
of corruption that had lingered since the communist era.  Promoting 
transparency and ethics is a top priority of the U.S. embassy. 
 
¶3.  The United States and the Czech Republic enjoy excellent 
relations.  All governments since 1989 have placed a high priority 
on transatlantic relations.  The Czech Republic entered NATO in 1999 
and joined the European Union in 2004.  The military has been 
reformed and cooperates closely with the United States in 
Afghanistan, Iraq, the Balkans and elsewhere.  The Czechs place a 
high priority on democracy promotion and spreading the lessons 
learned from their recent political transformation.  They have been 
particularly active in support of democratic reform in Cuba.  As a 
small country they have limited their active foreign policy 
engagement.  They do not have a particularly active role in either 
India or Pakistan.  Czech companies are eagerly eyeing the Indian 
market, and the largest Czech firms, including automaker Skoda, have 
operations in India. 
 
¶4.  Let me highlight three aspects of our bilateral relationship: 
visas, missile defense, and Radio Free Europe/Radio Liberty. 
 
¶5.  The only sensitive issue in our bilateral relations is visas. 
Although Americans can travel freely to this country, Czechs still 
need visas to travel to the United States.  As an American ally in 
NATO, as a strong supporter of the war on terror, and as an EU 
member, the Czechs believe that they should be able to travel to the 
United States on the same terms as Germans, French and other Western 
European countries in the U.S. visa waiver program.  President Bush 
recognized the aspirations of our Central European allies, and the 
importance of cementing closer ties with the Czech Republic and its 
neighbors, when he announced in Tallinn in November 2006 that he 
would seek legislation to revise the terms of the visa waiver 
program, placing greater emphasis on security cooperation, which 
would accelerate entry into the program for countries like the Czech 
Republic.  The Senate version of the 9/11 Bill approved last month 
contains language on this.  It is not in the House version, and the 
fate of the Senate provision in conference committee is uncertain. 
 
¶6.  In January, after several years of quiet talks, we asked the 
Czech Republic to host a radar station as part of the U.S. missile 
defense network.  This facility, together with a small number of 
interceptor missiles to be based in Poland, would protect the 
eastern United States as well as U.S. allies and troops in Europe 
against ballistic missiles launched from the Middle East.  While the 
current government supports the proposal, and last week formally 
accepted our offer to launch negotiations on the facility, the issue 
is controversial.  About 70% of Czechs say they oppose the radar. 
With memories of the Soviet invasion of 1968 still fresh in many 
minds - the last Russian troops did not leave the country until 1992 
- many Czechs are instinctively wary of the idea of foreign troops 
on their soil.  Many also believe the country should only take on 
military obligations through NATO, not on a bilateral basis. 
Negotiations will begin next month and are likely to last through 
the end of the year.  The deal will need to be approved by 
Parliament. 
 
¶7.  The Czech Republic has been home to the U.S.-funded Radio Free 
Europe/Radio Liberty since 1995 when then-President Vaclav Havel 
offered to host the Radios in recognition of the important role they 
played in promoting Czech democracy.  RFE/RL today broadcasts to 
countries in transition in the former Soviet Union and the Balkans, 
and to Iran, Iraq and Afghanistan.  The operation has not been 
without cost to the Czech Republic.  Iran has a trade embargo 
against the Czechs in retaliation for the broadcasts from Prague. 
Security threats since 9/11 have forced the RFE/RL headquarters in 
downtown Prague to expand their security perimeter, partially 
closing streets.  Last year ground was broken on a new, more secure 
facility in Prague that will house the Radios starting in late 2008. 
 The national and city governments strongly support RFE/RL's 
continued presence, and have contributed nearly $1 million to fund 
the move.  You will have the opportunity to see the current RFE/RL 
facilities during your stop in Prague. 
 
¶8.  Of course the Czech Republic is also a destination for thousands 
of American visitors every year, with Prague its crown jewel.  I 
look forward to welcoming you during your brief rest stop.  I will 
host you for lunch in the historic U.S. Ambassador's Residence where 
you will have the chance to talk with me and members of my staff. 
 
GRABER