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UNCLAS SECTION 01 OF 04 ATHENS 000716 
 
SENSITIVE 
SIPDIS 
 
FOR H AND EUR/SE:  PLEASE PASS URGENTLY (MAY 22) TO 
REPRESENTATIVE SARBANES 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON SOCI GR
SUBJECT: Scenesetter for Representative Sarbanes and former 
Senator Sarbanes 
 
ATHENS 00000716  001.2 OF 004 
 
 
SENSITIVE BUT UNCLASSIFIED -- PROTECT ACCORDINGLY 
 
FROM AMBASSADOR SPECKHARD TO REPRESENTATIVE SARBANES 
 
¶1. (SBU) Dear Senator and Congressman, we are looking 
forward to your visit.  I wanted to offer you the following 
background information that you may find interesting in 
preparing for your trip.  I look forward to the opportunity 
to meet and discuss some of these issues in more detail 
when you are here.  The Embassy stands ready to assist to 
make your visit a productive and enjoyable one. 
 
------------ 
INTRODUCTION 
------------ 
 
¶2.  (SBU) Greece's center-right New Democracy government of 
Prime Minister Kostas Karamanlis seeks to maintain good 
relations with the U.S., though the U.S.-Greece partnership 
is complex and at times challenging.  Greek-U.S. military- 
to-military cooperation is good, particularly at the U.S. 
Navy base at Souda Bay on Crete, and Greece is among the 
largest purchasers of U.S. military equipment.  Greece's 
participation in NATO, however, is politically sensitive 
with weak public support for NATO operations.  Some of the 
Embassy's priority goals in Greece include: 
 
-- Promoting stability in the Balkans in light of Kosovo's 
declaration of independence and Greece's opposition to the 
Former Yugoslav Republic of Macedonia's bid to join NATO 
until the name issue is resolved; 
 
-- Further cooperation in combating Greek domestic and 
international terrorist threats and in strengthening Greek 
borders against transiting terrorists; 
 
-- Increasing Greek-Turkish cooperation and stability in 
the Aegean and on Cyprus; 
 
-- Encouraging Greece to contribute to European energy 
security through diversification as Greece develops as an 
energy transit hub; and 
 
-- Expanding trade with the U.S. 
 
¶3.  (SBU) I believe the timing of your visit provides a 
unique opportunity to reinforce a strong message of 
partnership and shared values between the United States and 
Greece.  The recent events in the Balkans and the NATO 
Summit have created a difficult political environment for 
U.S. supporters in Greece and a reaffirmation of our 
continued interest in a strong and cooperative relationship 
will be much appreciated. 
 
¶4.  (SBU) Your visit also provides an opportunity, if you 
desire, to make progress on issues of great importance to 
the future of Greek-U.S. cooperation in education by: 
 
-- Encouraging the GoG to recognize degrees from private, 
including American universities in Greece; 
 
-- Encouraging flexibility in application of new tax law to 
educational institutions with an American affiliation; and 
 
-- Encouraging reciprocity for American students in Greece 
so they receive multiple-entry visas for the duration of 
their studies in Greece. 
 
-------------------- 
MACEDONIA NAME ISSUE 
-------------------- 
 
¶5. (SBU) Greeks consider the unmodified use of "Macedonia" 
a usurpation of their heritage and warn that it could 
encourage irredentism towards Greece's northern province of 
the same name.  We have repeatedly urged both sides to 
engage in negotiations led by Matthew Nimetz under the 
auspices of the United Nations and have stated that the 
U.S. would accept whatever solution Athens and Skopje 
agreed upon through the negotiations.  In the aftermath of 
Greece vetoing the NATO invitation at the April 2008 NATO 
 
ATHENS 00000716  002 OF 004 
 
 
Summit in Bucharest, we continue to urge both countries to 
work for a mutually agreeable solution through the 
UN/Nimetz process. There has been little progress in this 
area, pending the completion of Macedonia's June national 
elections. The Administration is hopeful that an agreement 
could be reached by July 9th, when Croatia and Albania will 
sign the NATO Accession Protocol to officially launch 
accession talks. Greek counterparts, however, are skeptical 
this target can be met, given the time it will take to 
organize and empower a new government in Skopje.  The 
government of Greece, however, is signaling its desire and 
intent to move swiftly in finding a solution after the 
elections. 
 
------ 
KOSOVO 
------ 
 
¶6. (SBU) Kosovo declared its independence on February 17, 
2008, shortly after Serbia's January 2008 elections. 
Kosovo has been formally recognized by more than 40 United 
Nations Member States, including 19 individual EU member- 
states, though a number, including Greece, have not. 
Despite this, Greece maintains substantial military forces 
in NATO's Kosovo force and is providing personnel and 
support to the EU's "Rule of Law Mission" in Kosovo.  The 
Administration has encouraged the GOG to recognize Kosovo 
in the interest of supporting stability.  You may want to 
thank them for their support for the EU Mission and 
encourage them to continue to use their good relations with 
Serbia to urge a forward-looking approach to Serbia's 
future in the European and Euro Atlantic community. 
 
------------- 
ENERGY ISSUES 
------------- 
 
¶7. (SBU) It will be useful for you to praise Greece's new 
role as an energy pipeline corridor to Western Europe in 
your meetings, while stressing the importance of Greece 
using that role to contribute to European energy security. 
It can do so through rapid completion of the Turkey-Greece- 
Italy Interconnecter (TGI), which is the first pipeline to 
carry Caspian gas to Europe without going through Russia or 
through Russian-controlled pipelines.  It is therefore an 
important step in realizing our Southern Corridor strategy 
of increasing European energy diversity and security.  TGI 
will also help Greece: whereas currently 80 percent of 
Greece's natural gas supplies come from Gazprom, once TGI 
becomes fully operational by 2012, this dependence could be 
reduced to under 50 percent. 
 
¶8.  (SBU) Greek cooperation on energy with Russia has 
increased significantly over the past two years.  On April 
29, PM Karamanlis and outgoing Russian President Putin 
signed an agreement on cooperation on the South Stream gas 
pipeline. While some view this pipeline as a competitor to 
TGI, TGI is far more advanced in design and development and 
likely will not be impacted. Meanwhile, Greece, Bulgaria, 
and Russia have agreed to support the Burgas- 
Alexandroupolis Bosporus Oil Bypass Pipeline (BAP) and 
share ownership, which we support insofar as it is 
commercially feasible. 
 
------------------- 
VISA WAIVER PROGRAM 
------------------- 
 
¶9. (SBU) Greece is the only one of the original EU 15 not 
participating in the U.S. Visa Waiver Program (VWP). 
 Secretary Rice sent a letter to DHS Secretary Chertoff in 
August 2007 to officially nominate Greece for the program, 
after Greece introduced a new biometric passport that meets 
all ICAO standards.  A DHS-led team of technical experts 
visited Greece in November and positively assessed its 
eligibility.  Negotiations are ongoing, with another state- 
led delegation to Athens due on May 27-28. (Greece asked 
for a short pause in February to consult within the EU.) 
Greece's inclusion in the VWP would boost the U.S. image, 
and we are working hard to make this happen this year. 
 
 
ATHENS 00000716  003 OF 004 
 
 
-------------------- 
GREECE-TURKEY-CYPRUS 
-------------------- 
 
¶10. (SBU) Against the sway of public opinion, the GOG 
remains supportive of Turkey's EU accession hopes and 
understands that a Turkey in the EU is in Greece's long- 
term strategic interest.  Greece and Turkey still differ on 
issues such as Aegean air/seaspace demarcation.  The recent 
cancellation of a Greek-initiated Aegean exercise, when 
NATO declined its support, aggravated relations, yet 
rapprochement remains the overall leitmotif oftions.  On Cyprus, the ic Ledra Street cQvo sides and a renewed QUN-brokered July 8th 2rus problem, 
although many of the tough political issues remain to be 
addressed. 
 
--------- 
EDUCATION 
--------- 
 
¶11. (SBU) Greece's chronically-underfunded public education 
system continues to be a volatile political issue.  In 
2001, then opposition party New Democracy (ND) proposed an 
amendment to Article XVI of the Greek constitution - the 
article which stipulates that higher education is provided 
free in state institutions and prohibits recognition of 
private universities - to allow recognition of degrees from 
private, non-profit universities in Greece.  The proposal 
was rejected by then-ruling PASOK.  The issue was revisited 
in 2006 by the current ruling ND government, which sparked 
months of public protest, teacher strikes, and student 
demonstrations.  In a turn of events from 2001, the 2006 
debate had the support of PASOK leader Papandreou. PASOK 
backpedaled on this support, however, and last week during 
renewed Parliament discussion on Article XVI, PASOK was not 
present. 
 
¶12.  (SBU) In a May 18 interview, leading PASOK figure Anna 
Diamandopoulou said, apparently with Papandreou's support, 
"Reform of Article XVI is important . . . but PASOK's 
priority is public education, from kindergarten to 
university."  On May 19, Education Minister Stylianides met 
with the PM and said afterwards, "the Greek Government 
believes in having non-state universities through revision 
of Article XVI."  Stylianides is now set to implement an 
"education framework law" from 2006 that involves 
administrative changes in state universities. This has 
caused new sit-ins and has led to the postponement of 
upcoming Rector elections. 
 
¶13. (SBU) When meeting with PASOK President George 
Papandreou in Greece, we recommend you highlight the 
following points: 
 
-- Domestic education policy is a matter for the Greek 
people to decide.  However, we support the education reform 
process, and the recogition of degrees for quality, 
private non-profit colleges and universities in Greece; and 
 
- We are ready to discuss and help build on the 
contribution of quality, American-affiliated institutions 
in Greece, and the positive U.S. experience with both 
public and private school options. 
 
¶14. (SBU) In addition, a recent tax law has eliminated tax 
exemptions for previously exempted schools and increased 
taxes for all educational institutions in Greece. Long- 
established schools, like the American Farm School in 
Thessaloniki, are in danger of closing because of new tax 
obligations that could be as high as 500,000 Euro per year. 
Other schools, like Anatolia College, Pinewood School, and 
the American College of Greece are also threatened.  The 
Ministry of Finance recently confirmed they would seek an 
amendment as early as June exempting the American School of 
Classical Studies and potentially other foreign 
 
ATHENS 00000716  004 OF 004 
 
 
archaeological schools from the new tax law.  There is no 
word on a resolution for the other schools, however, and 
tax filing deadlines begin May 26. 
 
¶15. (SBU) During your meetings with Prime Minister 
Karamanlis and other Ministers, including Parliament 
Speaker Sioufas, we recommend you underscore the points 
raised with Papandreou, in addition to the following 
points: 
 
-- According to EU court directive, Greece will soon have 
to recognize degrees from private European institutions. 
We ask that this recognition include U.S. institutions; 
 
-- A recent tax law eliminated property tax exemptions for 
all educational institutions in Greece.  Long-established 
schools, like the American Farm School in Thessaloniki, are 
in danger of closing because of new tax obligations that 
could be as high as 500,000 Euro per year.  Other schools, 
like Anatolia College, Pinewood School, and the American 
College of Greece in Athens are also threatened.  They all 
employ and educate thousands of Greek citizens. (For 
Karamanlis, who is from northern Greek:  stress the 
importance of the Farm School, which gives poor northern 
Greek children a chance to go to school for free and hires 
many northern Greek teachers and staff); 
 
-- It is important to keep these long-standing, high- 
quality, American-style institutions operating, as they 
contribute both to education in Greece and to understanding 
between our countries; 
 
-- The Ministry of Finance recently confirmed they would 
seek an amendment as early as June exempting foreign 
archaeological schools from the new tax law.  There is no 
word on a solution for the other schools, however, and tax 
filing deadlines begin May 26.  We hope that the taxation 
burden of these institutions can be resolved favorably and 
soon; and 
 
-- Additionally, American students studying in Greece 
currently receive a single-entry, 90-day visa, while Greek 
students studying in the U.S. receive multiple-entry visas 
for up to four years.  We seek reciprocity. 
 
SPECKHARD