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P 231619Z APR 08
FM AMEMBASSY ATHENS
TO RUEHC/SECSTATE WASHDC PRIORITY 1687
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 5133
RUEHKB/AMEMBASSY BAKU 0202
RUEHTI/AMEMBASSY TIRANA 1323
RUEHSQ/AMEMBASSY SKOPJE 1172
RUEHAH/AMEMBASSY ASHGABAT 0134
RUEHMO/AMEMBASSY MOSCOW 1000
RUEHDM/AMEMBASSY DAMASCUS 0288
RUEHTH/AMCONSUL THESSALONIKI 1860
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 06 ATHENS 000576 
 
SIPDIS 
 
E.O. 12958: DECL: 04/12/2018 
TAGS: PREL ENRG EPET GR
SUBJECT: DAS BRYZA'S APRIL 10-12 VISIT TO GREECE 
 
Classified By: Ambassador Daniel Speckhard for Reasons 1.4 (b,d) 
 
¶1. (C) Summary.  Arriving in the wake of the Bucharest 
Summit, EUR DAS Bryza found his Greek counterparts expressing 
a strong commitment to work with the United States on a range 
of issues including, but not limited to, the Macedonia name 
issue.  On Macedonia, his counterparts promised that Greece 
would work towards a solution, but as one interlocutor told 
him, "in your dealings with us, please do not treat your old 
ally Greece and FYROM as equals."  GoG officials spoke 
uniformly of Greece's effort to seek diversification of 
natural gas supplies, promising full commitment to the TGI 
pipeline.  While Bryza did not try to convince them to drop 
support for Gazprom's South Stream proposal, he urged them to 
make TGI their state's top energy priority, and to do so 
publicly.  Greek officials expressed no clarity on whether 
and how Greece would recognize Kosovo, particularly in view 
of uncertain Serbian elections.  Discussions of Cyprus 
ge`h one 
minister calle 
President Sioufas, Foreign Affairs Minister Bakoyannis, 
Deputy Ministers of Foreign Affairs Valynakis and Doucas, 
Foreign Affairs Secretary General for International Economic 
Affairs Skylakakis, Minister of Development Folias, Deputy 
Diplomatic Advisor to the P.M. Bitsios, PASOK Foreign Affairs 
Advisor Dolis and National Gas Company of Greece (DEPA) 
President Papageorgiou.  End Summary. 
 
- - - - - - - - - - - - - - - - - - - - 
The Name Issue: Alliance 
Solidarity Key; Ready to Move Forward 
- - - - - - - - - - - - - - - - - - - - 
 
¶2.  (C) On Macedonia, FonMin Bakoyannis said that it is key 
for Greece that Bucharest had ended with a display of 
Alliance solidarity, and she emphasized that Greece remains 
committed to continuing negotiations aimed at a final 
resolution.  She lamented, however, that "Skopje has a long 
way to go."  With an eye towards the political stand-off in 
Skopje over elections, Bakoyannis noted that Greece would 
reject at this point any name offer by Gruevski that was 
predicated on the results of upcoming elections.  Moreover, 
she noted the paramount importance to Greece that any 
solution be truly final, and invoked the resultant need for a 
Security Council resolution to seal the deal.  "Anything else 
will not solve the irredentist logic, which we want to bury 
once and for all."  Bakoyannis claimed that she was in a 
delicate position: while she wanted to address the issue in a 
forward-leaning, logical way, she was hearing "incredible 
things" in Parliament that highlighted the popular passions 
associated with the issue.  Nonetheless, she stated outright 
that she was ready to go wherever asked to continue talks: 
"I'll go to Geneva, New York, Skopje, or stay here.  All are 
ok." 
 
¶3.  (C) For his part, Deputy FonMin Valynakis demonstrated a 
certain amount of showmanship, handing Bryza a picture of the 
Macedonian PM laying a wreath on a map of an enlarged 
"united" Macedonia.  He also read a quote from a 1944 
Circular Airgram from then-Secretary of State Stettinius that 
characterized any talk of a "Macedonian nation or Fatherland" 
as "unjustified demagoguery" and a "possible cloak for 
aggressive intentions against Greece."  Valynakis could not 
concede that Skopje had demonstrated flexibility in accepting 
Nimetz,s "Republic of Macedonia (Skopje)" proposal, 
discounting "parenthesis and dashes" as unacceptable.  He 
urged the U.S. and others to send positive messages to Skopje 
for genuine compromise through UN auspices.  He furthermore 
reiterated that Greece's strategic goal was to see Skopje 
integrated into the EU and NATO, but that Greece took the 
good neighborly relations criteria very seriously. 
 
¶4.  (C) Lastly, Deputy PM Diplomatic Advisor Bitsios 
emphasized that, for him, the basic issue with the name was 
that one part of historical Macedonia could not be allowed to 
"claim the whole." He said any solution must take account of 
Greece's key three principles: the final solution must lead 
to "a name that makes a difference," one that will be used 
"for all international relations", and one that must be 
enshrined in the ROM's constitution.  "This is the best way 
to enforce any final solution."  Bitsios discounted the 
chance that political instability in the Republic of 
Macedonia could lead to that country's break up.  Lastly, he 
urged the U.S. not to treat "Skopjeans" and Greeks as equals 
in view of the tremendous shared history of the American and 
Greek people. 
 
 
¶5.  (C) DAS Bryza underlined that the UN was and remained in 
the lead on the name issue: the USG would, however, help 
whenever and wherever possible.  "We were invited by you, the 
Macedonians, and Matt Nimetz to assist, and we will."  He 
conveyed the impressions of US NATO Ambassador Nuland from 
her April 9 visit to Skopje that, after Bucharest, the 
Macedonian officials were ready to find an acceptable 
compromise.  "They realize they have to move, and in fact, 
have moved by apparently accepting Nimetz' last proposal." 
Bryza urged Greece to take advantage of this opening. 
 
- - - - - - - - - - - - - - - - - - - - 
Kosovo: No Clear Way Forward for Greece 
- - - - - - - - - - - - - - - - - - - - 
 
¶6.  (C) Greek officials did not outline a clear path towards 
Greek recognition of Kosovo.  Bakoyannis noted that the GoG 
had had a "very hard time in Parliament -- the political 
parties want Greece out of Kosovo and Afghanistan." 
Personally, she felt that "UNMIK is hugely important, as is 
the Greek role within it.  Nonetheless I see a raft of 
problems, such as the legal basis for UNMIK moving into 
Northern Kosovo."  She linked the parlous political situation 
in Serbia with the GoG's wait-and-see attitude vis-a-vis 
Kosovo.  "If Tadic wins the elections, ok, we can make 
positive moves -- we would consider recognition by UNGA.  If 
someone else wins, that's a problem."  She was in close 
contact with 5-6 like-minded European allies (Spain, etc), 
and they were all looking for a "good way forward" that would 
"keep Serbia calm."  She highlighted a problem with the Dutch 
Parliament, which wanted to predicate an EU SAA on 
extradition of Mladic, a position she found unworkable. 
 
¶7.  (C) Bryza reminded Bakoyannis of the continuing U.S. 
commitment to Kosovo.  He was concerned by EU Foreign Affairs 
Commissioner Solana's recent statements and attitude, which 
we thought made the EU look a bit desperate on the issue.  It 
is important that we not allow ourselves to seem too eager to 
base our actions on hoped-for Serbian good will as we believe 
this could end up being counterproductive.  Nonetheless, 
Serbian integration into Euroatlantic institutions remains a 
cornerstone of our policy for Europe. 
 
- - - - - - - - - 
Cyprus and Turkey 
- - - - - - - - - 
 
¶8. (C) Bryza's discussions about Cyprus quickly evolved into 
a broader discussion of the recent AKP court case and the 
evolution of Turkish democracy.  All of Bryza's interlocutors 
showed themselves to be strongly supportive of Turkey's 
European aspirations and equally worried that the AKP court 
case could have a fundamental and damaging impact on this. 
Bakoyannis noted her renewed hopefulness on Cyprus in the 
wake of the Ledra Street opening and the restarting of the 
July 8 framework process, but said "we simply do not know 
what Turkey aims for in Cyprus." In perhaps the most 
intQmments, and ones that rrealities and not grounded in the 
past.  He explained that, now that a confident Cyprus had 
successfully integrated into the EU, security issues facing 
the island had changed and it was time to start viewing 
security and Turkey from a different, updated angle.  In 
short, Valynakis did not see how the concept of Turkey as a 
Guarantor Power made any sense in the new, post-EU accession 
world.  Bryza cautioned Valynakis against deploying 
opposition to the 1960 Treaty of Guarantee at this point, 
just as settlement talks are about to recommence; such a move 
at this point would poison the atmosphere and risk a new 
breakdown in a process that is just gathering steam. 
 
- - - - - - - - - - - - - - - - - - - 
Energy: We're Committed to Diversity 
through TGI (and South Stream) 
- - - - - - - - - - - - - - - - - - - 
 
¶9. (C) Minister of Development Folias, FonMin Bakoyannis and 
other Greek officials repeatedly and emphatically stressed 
their government's firm commitment to assuring energy 
security through multiple routes and sources of energy. 
Bakoyannis said "diversification is our policy," and Folias 
emphasized that it was his "deep-rooted principle to have 
diversity of energy supplies."  Folias told Bryza he was 
dedicated to achieving TGI through action and not just words. 
 "If I have to travel to Baku every six months to make TGI 
happen, I will do so."  Folias had conducted a very positive 
visit to Baku in March, where he found the Azerbaijanis 
clearly committed to making TGI work.  He saiQhe wanted to 
purchase an additional 1 bcm from Baku asap; this, combined 
with Greek Algerian purchases, would bring the Russian share 
of Greek gas imports from 80% to below 60%.  Bakoyannis noted 
that she had told Russian Deputy Foreign Minister Titov 
earlier in the day that Greece was dedicated to completing 
TGI.  (Note: As well as participating in South Stream.  End 
note).  She informed DAS Bryza that, while Folias has the 
lead on energy issues, she would be as supportive as 
possible. 
 
¶10.  (C) All interlocutors expressed concern over Turkey's 
commitment to TGI.  Folias said it was essential that Turkey 
serve "as a transit country and not a reseller."  Both he and 
Bakoyannis expressed concern over the ramifications of 
Turkey's gas cutoff to Greece in the winter, although Folias 
noted that the situation had improved tremendously: "The flow 
from Turkey is up to the level it should be, and the quality 
of the gas we are receiving has improved."  He moreover 
admitted that Turkey had had the contractual right to reduce 
flows of gas to Greece as a result of its own gas shortfall. 
Folias said he was about to invite his counterparts from 
Italy, Turkey and Azerbaijan to meet in Athens in order to 
help resolve outstanding TGI issues, including the Turkish 
transit dispute.  Parliament President Sioufas also noted the 
importance of resolving the Turkey transit issue, but was 
emphatic in his appreciation for the support shown by Turkish 
Energy Minister Guler for TGI.  "In order to sign the 
Turkey-Greece-Italy gas inter-governmental agreement, he 
traveled five hours from his electoral district to meet with 
me, which he did for six hours.  Then he drove back to his 
district the same day.  And he did all this four days before 
the national elections." 
 
¶11.  (C) DAS Bryza's GoG interlocutors told him that Greece 
wanted to participate in South Stream, but put this into the 
context of Greece's search for more gas from whatever source. 
 "We need more gas, and it is essential that supply meet 
demand," Folias emphasized.  He noted that a Greek technical 
group had recently returned from discussions in Moscow over 
the modalities of South Stream, and said that another Russian 
technical group "might come to Athens soon."  FonMin 
Bakoyannis said that "On South Stream, Greece wants 
diversification -- I have been to Algeria, my Deputy Minister 
has been to Egypt.  Our Government has told our shippers to 
build LNG tankers..." 
 
¶12. (C) DEPA President Papageorgiou told Bryza that Gazprom 
was playing hardball in its negotiations with the GOG.  He 
urged Bryza to use his meeting with Folias to stiffen Folias' 
backbone.  He noted that Gazprm was predicating extension of 
the 2016 gas areement on reduced DEPA offtake of Gazprom gas 
in order to allow Gazprom to begin marketing its gas in 
Greece directly.  Gazprom was also working through its 
Italian partner ENI to enter the Greek market through 
purchasing one of the new regional gas companies (EPAs) that 
DEPA was in the process of establishing.  Gazprom was also 
likely to try to bid for a controlling share of DEPA, once 
the GoG privatized the firm.  Papageorgiou stressed that, 
from his optic, Gazprom wanted to take over all aspects of 
Europe's gas system -- from upstream production, through 
transit pipelines, to downstream sales.  It was an 
avaricious, monopolistic, all-controlling monster that needed 
to be countered. 
 
¶13. (C) DAS Bryza welcomed the Greek commitment to diversity 
and to TGI in particular.  He noted that the USG was "quite 
confident" that Azerbaijan had enough gas in the ground for 
TGI, the first phase of Nabucco, and perhaps for all of 
Nabucco.  The challenge was to secure sufficient volumes of 
Azeri gas when needed by TGI's and Nabucco's investors.  He 
admitted that dealing with Azerbaijan could be complex: "The 
Azeris would like to welcome you into their bazaar, but they 
want you to beg them to buy their carpet."  This led the GOAJ 
to send unclear signals that Bryza urged the Greeks not to 
misconstrue as a lack of commitment to the Southern Corridor. 
 
¶14. (C) On Turkey's role in the Southern Corridor, Bryza 
noted that a corner had been turned.  Once Azerbaijan's 
supply agreements expired April 1, the GOAJ had felt in a 
position to begin negotiations over both the cost of future 
gas sales to Turkey and transit arrangements in earnest. 
Most importantly, both national leaders were now personally 
involved in the negotiations.  He noted that the best way for 
Greece to assure the flow of gas through Turkey was to make 
certain it negotiated smart contracts with Turkey.  "Turkey 
will uphold whatever you negotiate." 
 
¶15.  (C) Bryza made it clear that the USG did not seek a new 
Cold War with Russia, and recognized absolutely that Russian 
gas would remain the largest source of Europe's future gas 
needs.  This, however, did not undercut the need for 
diversity, but rather strengthened it.  While he recognized 
the GOG's commitment to TGI, he repeatedly stressed that 
South Stream was aimed at undermining it, and Greece needed 
to be careful in sequencing the two pipelines.  Making 
certain that TGI was completed first would put Greece in a 
far superior negotiating position with Russia over South 
Stream, while doing the opposite -- giving South Stream 
priority -- could well scare off both the Azerbaijani 
Government as well as potential investors from TGI.  In 
response to a question from Bitsios as to the cost to Greece 
of signing agreements now without content on South Stream, 
Bryza admitted there did not seem to be a cost.  The problem 
was that, if TGI was thrown off track by South Stream, Greece 
and its consumers would end up paying a higher cost for gas 
supplies in the future.  Bryza told Folias that the Bulgarian 
Government had kept a small number of basic principles in 
mind when negotiating over South Stream:  1. All South Stream 
contracts must contain ship-or-pay clauses; 2. Contracts 
should include an explanation of the source of South Stream's 
gas; 3. Contracts should show that a reasonable amount of 
rate-of-return would be realized on any investment in a 
reasonable time frame; 4.  Host countries should own a 
majority of South Stream pipelines transiting their 
territory; and 5. third-party access provisions must be 
protected. 
 
- - - - - - - 
ECCC Issues 
- - - - - - - 
 
¶16. (C) MFA Secretary General Skylakakis expressed his strong 
commitment to the Economic and Commercial Cooperation 
Commission (ECCC) process in his meeting with DAS Bryza.  He 
called the Commission a "useful tool" that allowed the two 
sides to discuss the economic side of the relationship on a 
regular basis.  He said he was looking forward to holding the 
next ECCC on June 19 in Washington, and promised to do 
whatever he could "to have as good a meeting as possible." 
Skylakakis and Bryza went through the entire ECCC agenda: 
 
a.  IPR.  Skylakakis said that Foreign Minister Bakoyannis 
had finalized creation of the IPR Interministerial Committee 
under Skylakakis' leadership and that its creation had been 
officially published in the Government's Gazette.  He noted 
that the Ministry of Culture's Copyright Office (OPI) had 
spent $1 million in the creation of an information portal on 
good IPR practices.  The Special Tax Police (YPEE) had now 
completed the process of sending a fourth tranche of letters 
to 5000 companies with 20-39 employees, asking the firms to 
supply software licenses or risk a detailed tax audit.  The 
last letter had been sent at the end of January, and firms 
had until the end of February to respond.  YPEE was now 
collating the responses and would decide which firms to 
audit.  Skylakakis noted that 92% of large companies (i.e. 
those firms who received YPEE's first tranche of letters in 
2006) had responded in a satisfactory way.  "I promise that 
the Business Software Alliance (BSA) will see increased 
software sales as a result of our efforts.  This is the first 
time that the Greek state has done this." 
 
Skylakakis said that new Greek laws finally allowed 
municipalities immediately to destroy seized 
counterfeit/pirated goods estimated to posses any value.  In 
the past, he admitted, the municipalities did not have the 
authority to do this and were instead forced to auction off 
such goods.  Skylakakis raised the new, interagency 
confiscation teams, which had started work in January.  "This 
is moving too slowly; I admit that even I am not satisfied, 
and promise new energy will be given to this task this 
month."  He noted that, as a former head of the Athens 
municipal police, he recognized that this task was a 
particularly challenging one for municipal authorities, but 
promised to seek results.  "I will also use the new committee 
to get results."  Skylakakis highlighted the fact that, in 
Greece, the police are viewed as the "evildoers", not those 
who break the law. 
 
Skylakakis ended his presentation by urging Bryza not to 
support a Special 301 listing this year, as that would just 
feed into a sense that, after the Bucharest Summit, the USG 
would try to find whatever means it could to punish Greece. 
He understood the two issues had no relation to each other, 
but the Greek public would not understand. 
 
Bryza noted that this was an impressive list of achievements. 
 He explained that the 301 process involved many agencies, 
who were hearing a tremendous amount of information from U.S. 
industry, most of which was negative.  He said the June 19 
ECCC meeting represented a unique opportunity for the GOG to 
present its views directly to the USG's interagency community. 
 
b.  Commercial Issues.  i. Procurement:  Skylakakis noted 
that Greek implementation of European procurement law had 
already had a very positive effect on the bidding process. 
Now only victorious companies had to supply the large amount 
of qualification documents.  He admitted that, as ministries 
learned how the new law worked, procurement was lagging, but 
this was a universal problem not limited to U.S. bidders. 
Skylakakis also promised to urge the Ministry of Development 
to fulfill its commitment to the Embassy to publish by May a 
list of alternative documents that can be presented by U.S. 
bidders, which the GoG will accept as fulfilling Greek 
tendering procedures. 
 
ii. Hospital Debt.  Skylakakis said he had received some 
promises from the Ministries of Health and of Finance 
relating to the resolution of the hospital debt issue.  "I am 
not going to present these to you because they are too vague, 
and I want to receive them from a high level.  I will have 
more news for you in June." 
 
iii.  Trade and Investment.  Skylakakis said the key issue 
from the Greek point of view was the lack of U.S. trade and 
investment in Greece.  "You are losing a tremendous 
opportunity -- access to a market of more than 200 million 
Euro/year at a time when your currency is particularly 
competitive."  He hoped to be able to discuss this issue on 
June 19, as well as during the private sector event 
associated with the ECCC on June 20. 
 
iv.  Money Laundering/Terror Finance.  Skylakakis said the 
GoG would ratify the Third European Community Directive on 
Money Laundering/Terror Finance in May. 
 
- - - - - - - - - - 
Visa Waiver Program 
- - - - - - - - - - 
 
¶17.  (C) Deputy Foreign Minister Valynakis pressed Bryza on 
the Visa Waiver Program, noting that upon completion of their 
meeting he was to testify before Parliament on the issue. 
Valynakis stressed that the GoG was committed to solving 
outstanding MOU technical issues in order to secure Visa 
Waiver status.  He noted that while Foreign Minister 
Bakoyannis was determined to see the MOU to completion, Greek 
public opinion complicated matters, and Bakoyannis needed our 
assistance.  Valynakis continued to press Bryza and the 
Ambassador to show the "political will to help us," noting 
that success would represent a victory for the U.S. image in 
Greece.  Parliament President Sioufas echoed Valynakis' 
argumentation, and told Bryza passionately that Greece, a 
NATO ally for 55 years, whose citizens had repeatedly shed 
blood with Americans in twentieth century conflicts, should 
be a member of the VWP.  "All we want is proper -- not 
preferential -- treatment."  He offered whatever help he 
could provide for Greece to enter the program. 
 
¶18. (C) The Ambassador explained that he expected to  receive 
a revised MOU from the GoG shortly, and next steps would 
largely depend upon suggested MOU modifications -- minor 
edits could be addressed expeditiously but more significant 
modifications could result in Greece's delayed entry through 
an EU-wide exercise. 
 
- - - - - - - - - - 
Business with Syria 
- - - - - - - - - - 
 
¶19. (C) DAS Bryza expressed surprise to Deputy Foreign 
Minister Doucas over his recent visit to that country. 
Doucas indicated that he believes it is important to engage 
Syrians so they don't move more towards Iran. 
Bryza said that was interesting, but one of the key issues 
for the USG was the issue of foreign fighters 
moving through Syria to Iraq adding to Iraq's instability. 
Doukas agreed this was a problem, but said that 
the Syrian ministers with whom he met are interested in 
engaging with the West.  Doukas and Bryza agreed that 
one area of possible opportunity for Greece is to work with 
the Government of Iraq in order to urge moving 
more quickly in developing the Akkas gas field.  Bryza said 
he needed to focus on Akkas once back in 
Washington, but said he saw potential to Greece's support 
here. 
 
SPECKHARD