VZCZCXRO3131
OO RUEHBC RUEHBW RUEHDE RUEHDIR RUEHIHL RUEHKUK
DE RUEHTH #0651/01 1341502
ZNY CCCCC ZZH
O 131502Z MAY 08
FM AMEMBASSY ATHENS
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1784
INFO RUCNIRA/IRAN COLLECTIVE PRIORITY
RUCNRAQ/IRAQ COLLECTIVE PRIORITY
RUEHZG/NATO EU COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 ATHENS 000651 
 
SIPDIS 
 
ISN, EB, NEA, IO, P, T, TREASURY-TFI 
 
E.O. 12958: DECL: 05/12/2018 
TAGS: EFIN ETRD TRGY UNSC KNNP IR GR PREL PGOV AORC
SUBJECT: GREECE/IRAN: WHAT'S CAUSING GREEK RELUCTANCE WITH 
FURTHER IRAN SANCTIONS? 
 
REF: A. SECSTATE 48615 
     ¶B. NEMROFF E-MAIL 05/07/2008 
 
Classified By: A/POLCOUNS JEFFREY HOVENIER.  REASONS 1.4 (B) AND (D). 
 
¶1. (C) SUMMARY: Deputy head of the Greek MFA Middle East 
directorate told us Greek reluctance to sign on to further 
Iran sanctions stemmed from several factors, including lack 
of an EU consensus, doubts about the effectiveness of 
sanctions, belief that greater engagement, not less, provided 
greater leverage, and incredulity about Israeli and U.S. 
estimates of Iranian nuclear intentions.  But perhaps the 
most important factor was the GOG's unwillingness to defy 
Greek shipowners, who have significant dealings with the 
Iranians.  END SUMMARY. 
 
¶2. (C) DepPolCouns discussed ref A points on Greece's plans 
to submit a 60-day report on compliance with UNSCR 1803 with 
MFA A6 Middle East Directorate deputy head Giorgos Ayfantis. 
Ayfantis said the GOG understood it had an obligation  to 
submit the report and that discussions were on-going on how 
to do so.  The problem was a lack of unity on what to write. 
Ayfantis explained that the question of Iran sanctions was 
complicated.  First, there was no EU consensus and a wide 
divergence of opinion.  Contrary to reports from Brussels 
(ref B), he denied that Greece was joining with the Cypriots 
and Portuguese in being the main force undermining EU 
sanctions efforts, placing the blame instead on Spain and 
Germany, both of whom had big commercial interests in dealing 
with Iran and were reluctant to jeopardize those interests 
with further sanctions. 
 
¶3. (C) Secondly, many in the EU, including Greece, were 
skeptical about the efficacy of sanctions.  Greece and others 
agreed on the importance of Iran's not developing a nuclear 
weapons capability but doubted further sanctions would help 
achieve the goal.  FM Bakoyannis opposed sanctions in 
principle, believing engagement was a potentially more 
fruitful approach.  Others in the GOG took the engagement 
thesis a step farther, arguing that increasing trade with 
Iran could actually make it easier to halt Iran's nuclear 
program by giving us greater economic leverage.  Also, many 
were skeptical that Iran really had an interest in developing 
nuclear weapons.  Threatening to acquire such weapons, 
Ayfantis opined, got Iran further than actually acquiring 
them, since the latter would lead to a general consensus on 
the need to take retaliatory and defensive measures. 
Moreover, Israeli and U.S. predictions about Iran's 
intentions were discounted by many due to the experience of 
Saddam and WMD. 
 
¶4. (C) Finally, Ayfantis explained another, particularly 
delicate factor shaping the Greek position.  This was the 
interests of Greek shipowners, who have many dealings with 
the Iranians.  Greek shipping interests in Iran were under 
threat from the Chinese, who were trying to develop their 
merchant marine relationship with the Iranians.  Greek 
shipowners feared that further sanctions would not only 
directly impact Greek dealings with Iran, but also push the 
Iranians towards the Chinese.  The GOG, for its part, had 
always been very attentive to the interests of the powerful 
Greek shipowners.  But Ayfantis explained GOG concern for 
their interests was even greater now since the government was 
trying to persuade the shipowners to move their headquarters 
from their traditional base in London (where Labor-backed tax 
increases were becoming more burdensome) to the Greek port 
city of Piraeus near Athens. 
 
¶5. (SBU) During the conversation, Ayfantis noted that recent 
Greek Ambassador to Teheran Karafotias would soon take over 
as head of the MFA's D1 Directorate for International 
Organizations, which overseas, amongst other things, UN 
policy.  Ayfantis did not offer an opinion on the possible 
impact of Karafotias' appointment on sanctions policy, other 
than to say that Karafotias brought to the job a wealth of 
experience dealing with the Iranians. 
 
¶6. (C) COMMENT: This is the first we have heard Greek 
footdragging on further Iran sanctions linked to the 
interests of Greek shipowners.  The MFA has usually cited FM 
Bakoyannis' principled opposition, but we suspected more was 
at play due to Greek persistence.  While acknowledgment of 
the shipowners' angle is refreshing, it does not bode well 
for changing the GOG's mind on Iran sanctions.  Past 
experience (on such issues as trying to get the GOG to sign a 
PSI shipboarding agreement) suggests that when it comes to 
Greek shipowners -- who control the largest merchant marine 
fleet in the world and a significant portion of Greek GDP -- 
the GOG is quite deferential. 
SPECKHARD