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P 121653Z NOV 08
FM AMEMBASSY DUBLIN
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INFO RUEHLO/AMEMBASSY LONDON PRIORITY 2553
RUEHBL/AMCONSUL BELFAST PRIORITY 0831

UNCLAS SECTION 01 OF 05 DUBLIN 000616 
 
SENSITIVE 
SIPDIS 
 
FROM AMBASSADOR FOLEY TO DEPUTY SECRETARY NEGROPONTE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON ETRD EINV EAIR SENV MOPPS MARR
EI 
SUBJECT: SCENESETTER FOR VISIT OF DEPUTY SECRETARY 
NEGROPONTE TO IRELAND 
 
¶1.  (U)  Welcome to Ireland.  We look forward to your visit. 
You will arrive against a backdrop of an Irish Government led 
by Prime Minister Brian Cowen that is facing economic woes 
and uncertain relations with the European Union following its 
rejection of the Lisbon Treaty in a referendum in June 2009. 
However, the peace process in Northern Ireland, while 
difficult, continues to proceed successfully and Ireland is 
increasingly deeply engaged in foreign affairs through the 
European Union and the United Nations. 
 
------------------------------- 
Domestic Politics/Lisbon Treaty 
------------------------------- 
 
¶2.  (U) Ireland's May 2007 general election brought Fianna 
Fail, led by Prime Minister (also known as the Taoiseach, 
TEE-SHUCK) Bertie Ahern, into a third successive coalition 
government; with the Green Party and the Progressive 
Democrats as partners.  On April 2, 2008, Ahern caught 
Ireland by surprise by announcing his resignation.  He was 
succeeded on May 7 by his heir designate, former Fianna Fail 
Deputy Party Leader and Finance Minister Brian Cowen. 
Previous to holding the Finance Minister portfolio, Cowen was 
Foreign Minister from January 2004 through September 2004. 
There have been no significant changes in U.S.-Irish 
bilateral relations or Irish foreign policy under Cowen's 
leadership.  On November 9, the Progressive Democrats 
announced they will disband as a political party.  However, 
this is not expected to have any impact on the governing 
coalition. 
 
¶3.  (SBU) Looming large on the political landscape is the 
Irish rejection of the Lisbon Treaty referendum on June 12. 
Since then, Prime Minister Cowen has attended two European 
Council meetings, where the other EU Heads of Government 
agreed that Ireland needed time to analyze the outcome of the 
vote, and consult internally and with other EU member states 
to devise a way forward for EU reform.  The European Council 
has laid down two markers: the treaty ratification process 
will proceed throughout the EU (currently 24 of 27 EU member 
states have ratified the Lisbon treaty); and the European 
Council will revisit the issue of Ireland's rejection of the 
Treaty during its December meeting.  Ireland is on the hook 
to suggest ways out of the dilemma. 
 
¶4.  (SBU) Recently, Cowen has been discretely floating the 
concept of holding a second referendum in late 2009 with 
political declarations to protect Irish positions on 
abortion, neutrality, and taxation.  While speaking at a 
business roundtable on October 30, he stated that if Ireland 
does not proceed with the next stage of the ratification 
process "there will be consequences."  However, most other EU 
member states want the Lisbon Treaty to be fully ratified 
before the June 2009 European Parliament election so the 
election can be held under new Lisbon Treaty rules. 
 
¶5.  (U) Long a vital element in the U.S.-Irish relationship, 
emigration to the U.S. declined significantly with Ireland's 
economic boom in the 1990s and 2000s.  In the past several 
years, Ireland experienced high levels of inward migration, 
mostly from Eastern European members of the EU.  However, as 
the global recession has eliminated large numbers of jobs in 
the construction industry, that trend seems to be reversing. 
There is now a renewed interest in emigration to the U.S., 
and immigrants in Ireland are experiencing a disproportionate 
effect from the economic downturn. 
 
------------------------------ 
Difficult Economic Times Ahead 
------------------------------ 
 
¶6.  (U) Until the recent economic crisis, Ireland had one of 
the fastest growing economies in the world over the past 
decade.  Ireland's Celtic Tiger transformation resulted from 
a combination of low corporate tax rates, industrial peace, 
pro-investment policies, fiscal responsibility, and effective 
use of EU support funds.  These factors (in addition to 
staunchly pro-American business policies) have led over 600 
U.S. firms to establish operations in Ireland; the stock of 
U.S. investment in the country is, in fact, significantly 
more than the U.S. combined total in the BRIC countries 
(Brazil, Russia, India, and China).  Ireland also became a 
magnet for inward immigration, attracting over 100,000 new 
arrivals since the accession of ten new EU Member States in 
¶2004.  With the economy's slowdown, however, leading 
economists are predicting net migration out of Ireland for 
the next two years at least. 
 
DUBLIN 00000616  002 OF 005 
 
 
 
¶7.  (U) This year, Ireland's economy began to stumble.  The 
government predicts a budget deficit of 6.5 percent of GDP 
and that the economy will contract by 0.8 percent in 2009. 
Leading economists view both figures as overly optimistic. 
The government introduced an austere budget for 2009 
featuring unpopular spending cuts (in health and education in 
particular) and tax increases.  In addition to the worsening 
macroeconomic picture, the Irish banking system was on the 
verge of collapse prior to the government stepping in on 
September 30 and guaranteeing the liabilities of the six 
major Irish banks.  In spite of this guarantee, there is 
still a worry among market watchers that the government will 
be forced to follow some of its European neighbors and inject 
fresh capital into the banking system.  The Irish property 
market bubble burst in 2008 (with prices falling by up to 40 
percent in some sectors of the market) prompting a worry that 
the banks would end up holding a significant amount of 
impaired assets. 
 
---------------- 
Northern Ireland 
---------------- 
 
¶8.  (U) The USG wants to continue to support economic growth 
in the North and North-South Cooperation.  We have 
consistently taken the position that the devolution of 
policing and justice is an important and integral part of the 
Good Friday Agreement and St. Andrews Agreement.  Our 
discussions with Irish Government officials indicate that the 
Irish believe devolution must be accomplished according to a 
timeframe mutually agreed by Sinn Fein and the DUP.  The 
Irish and the U.S. both agree that there can be no backing 
away from this responsibility and obligation.  The USG 
supported a major investment conference in Belfast in May 
¶2008.  During President Bush's June 16 visit to Belfast 
(where he met Cowen), the President stressed that devolution 
of policing and justice must occur. 
 
--------------------- 
Rendition Allegations 
--------------------- 
 
¶9.  (SBU) Since the issue of alleged renditions broke in 
2004, the Irish have publicly stated that they have accepted 
assurances that no rendition prisoners have transited 
Ireland.  Top Irish officials, including the Prime Minister, 
have declared that they would take the USG at its word and 
not pursue inspections of U.S. aircraft suspected of 
transiting Ireland with rendition prisoners without 
sufficient probable cause.  As recently as December 2007, 
then Prime Minister Bertie Ahern and then Foreign Minister 
Dermot Ahern categorically rejected Opposition and Irish 
Human Rights Commission calls for random inspections of U.S. 
aircraft.  Current Prime Minister Brian Cowen, then Minister 
of Finance, supported this position. 
 
¶10.  (SBU) On October 29, the Government of Ireland 
established a Cabinet-level committee to review Ireland's 
human rights policies - giving it a mandate to approach the 
transition team of the incoming Obama Administration to 
review Irish concerns about renditions, the detention 
facility at Guantanamo Bay, and intensive interrogation 
techniques which are considered torture (such as 
waterboarding).  The Committee will also review appropriate 
authorities to ensure that the national police force (Garda) 
and airport authorities have sufficient powers to search and 
inspect all aircraft transiting Ireland which are suspected 
of being involved in renditions, perhaps through 
strengthening the Air Navigation and Transport Acts.  The 
creation of this committee was, in part, at the behest of the 
Green Party coalition partner in government.  While formation 
of the committee is likely to provide greater government 
oversight of human rights concerns, we do not expect it to 
result in aircraft inspections or otherwise adversely affect 
U.S.-Irish relations. 
 
------------------------ 
Guantanamo Bay Detainees 
------------------------ 
 
¶11.  (SBU) The United States continues its effort to resettle 
the 17 Uighurs, 4 Uzbeks and other detainees that cannot be 
returned to their home countries due to inhumane treatment 
concerns.  The State Department is working with a number of 
European countries in an effort to put together a group of 
countries to step forward and resettle detainees as a 
 
DUBLIN 00000616  003 OF 005 
 
 
humanitarian gesture.  We have been told in previous 
approaches that Ireland is unwilling to consider accepting 
detainees.  It would be extremely helpful if Ireland would 
consider joining the European group in discussing the 
possible resettlement of these detainees. 
 
------------------------ 
Changes in U.S. Tax Code 
------------------------ 
 
¶12.  (SBU) The Irish government is concerned about previous 
proposals from President-elect Obama that would reduce or 
eliminate the tax advantage U.S. multinationals receive for 
investing in low-tax jurisdictions overseas.  With a 
corporate tax rate of 12.5 percent a major contributing 
factor, Ireland has attracted a stock of $87 billion in U.S. 
foreign direct investment.  These U.S. companies generate a 
significant portion of the Irish economy's GDP, employment, 
and exports.  Both the Irish Finance and Foreign Affairs 
Ministers have commented publicly that the government will 
lobby against and such change to the U.S. tax code, which 
they see as a direct threat to Irish economic well-being. 
 
--------------------------------- 
U.S.-Irish Strategic Relationship 
--------------------------------- 
 
¶13.  (U) Cowen announced on July 17 in New York that Ireland 
would conduct a strategic review of relations between the 
U.S. and Ireland, to be led by Irish Ambassador to the U.S. 
Michael Collins.  Irish officials have clarified that the 
purpose of the strategic review is to look beyond the U.S. 
cooperation on the Northern Ireland peace process, identify 
Ireland's key interests in the U.S., and determine if the 
Irish government's resources are being best deployed in 
support of those interests.  It is not yet clear what 
direction the Irish see the relationship taking in future 
years. 
 
--------------------------------------------- -------- 
Aviation Pre-Clearance at Shannon and Dublin Airports 
--------------------------------------------- -------- 
 
¶14.  (U) DHS Secretary Chertoff and Irish Transport Minister 
Noel Dempsey are expected to sign the completed U.S.-Irish 
Pre-clearance Agreement in Washington on November 17.  The 
agreement will allow for U.S. customs clearance at Shannon 
and Dublin airports in addition to the already existing 
immigration clearance.  If all goes as planned, full 
pre-clearance (immigration and customs) will begin in Shannon 
in 2009 and in Dublin in 2010. 
 
----------------------------- 
Environment/Energy Initiative 
----------------------------- 
 
¶15.  (U) Embassy Dublin has a very active relationship with 
the Irish government on environment and energy issues.  We 
worked with various Irish agencies to put together an ocean 
energy workshop in Galway in July, which was attended by 
several U.S.-based companies.  We are also putting together a 
series of visits by U.S. government and private sector 
experts, the first of which is a visit by a DOE official to 
discuss the USG's public sector energy efficiency program. 
We believe that we can effectively partner with the Irish on 
the nexus of environmental/energy issues (including climate 
change), which would be useful in our broader engagement with 
Europe going forward.  Ireland is very active in this area 
given that they are well above their Kyoto Protocol 
commitments and they are worried about their energy security. 
 They have limited indigenous fossil fuel sources of energy. 
 
--------------------------- 
Global and Regional Efforts 
--------------------------- 
 
¶16.  (SBU) The U.S. and Ireland have worked closely and 
effectively on issues of shared concern, especially through 
Ireland's participation in multilateral organizations such as 
the UN and the EU.  Ireland recently resettled ten Cuban 
refugees sheltering at Guantanamo.  Ireland's military 
neutrality, however, remains an important cornerstone of its 
foreign policy, and will need to be considered when proposing 
bilateral initiatives. 
 
EU Relations.  Ireland and the U.S. share a common commitment 
to democracy, human rights, and the rule of law. 
 
DUBLIN 00000616  004 OF 005 
 
 
Consequently, the Irish are generally supportive of USG 
foreign policy and global issues positions, particularly at 
the UN and EU.  Nonetheless, the Irish also value extensive 
dialogue and consensus, and will, on occasion, adopt 
positions at odds with those of the U.S. in order to preserve 
consensus, particularly within the EU. 
 
Iraq/Access to Shannon Airport.  The USG appreciates 
Ireland's steadfast support in permitting U.S. military 
transits at Shannon and Dublin Airports (over one million 
troops since 2003; 262,000 in 2007), which backstop U.S. 
actions in the Gulf region, despite the unpopularity of this 
policy domestically.  Ireland has also made a commitment of 
over three million euros to the EU's reconstruction efforts 
in Iraq. 
 
Immigration.  The Irish Government continues to consult and 
lobby with Congress and Irish-American groups on behalf of 
Irish residing illegally in the U.S., variously estimated at 
between 5,000 and 50,000.  A special unit of the Department 
of Foreign Affairs, set up in 2006 to assist the Irish 
Diaspora, assists Irish Ambassador to the U.S. Michael 
Collins in this endeavor.  While the Irish Government 
understands that Irish illegal aliens will not be dealt with 
separately from comprehensive U.S. immigration reform, the 
Irish take this emotive domestic issue to heart.  Irish 
officials regularly express deep concern for these illegal 
aliens and frequently ask the USG to regularize their status 
as soon as possible. 
 
Special Visas.  Ireland and the U.S. have successfully 
negotiated a special visa category (a modified J-1 visa) 
which will enable Irish citizens to live and work in U.S. for 
up to one year (a duration longer than currently available 
under existing visa regulations); and vice versa.  The Irish 
are impatient to have this new visa program actually commence. 
 
Climate Change.  Although the Irish public and media 
criticize the United States for remaining outside the Kyoto 
Protocol, Ireland's rapid economic growth has made it 
difficult for the country to meet its own Kyoto commitments. 
Under the Protocol, Ireland pledged to reduce emissions to 13 
percent above the 1990 levels by 2012, but emissions now 
stand at 25 percent above the 1990 threshold.  Ireland has 
also signed on to even more stringent EU requirements of 
reducing emissions by (up to) 30 percent by 2020.  In this 
context, the Government has welcomed Embassy proposals for a 
cooperative approach to climate change and we are working on 
bilateral initiatives focused on ocean/wave energy, methane 
capture, and clean coal technologies.  As part of this 
cooperation, the Embassy and the Irish government co-hosted 
an ocean energy workshop in July 2008, which included U.S. 
and Irish companies working in the sector. 
 
The Middle East.  Ireland supports the international 
community in calling for Hamas to renounce violence and to 
recognize Israel's right to exist.  It also supports the 
two-state solution.  The Irish are dismayed at violence in 
the Middle East and are supportive of the use of USG 
influence to make headway in the Middle East Peace Process. 
 
Iran.  While Ireland has generally supported international 
dialogue with Iran rather than sanctions, it recognizes that 
unchecked Iranian development of nuclear capability and its 
flouting of UNSC Resolutions represent a threat to the 
international community.  Ireland supported UNSCRs 1803 and 
1835 on Iran. 
 
Irish Peacekeeping/Darfur/Chad.  The Irish Defense Forces 
have nearly 800 troops serving in multilateral peacekeeping 
missions in Kosovo, Chad, Bosnia, Afghanistan, and elsewhere. 
Ireland is contributing 455 troops to the ESDP EUFOR mission 
to Chad, which is led by an Irish General, and sees this 
peacekeeping effort as contributing to the situation in 
adjacent Darfur.  The Irish Government prefers not to expand 
its military engagement in Afghanistan, though it will 
consider additional development and humanitarian assistance 
there. 
 
Conflict Resolution.  In 2007, then Foreign Minister Dermot 
Ahern (now the Justice Minister) announced the opening of a 
new Conflict Resolution Unit (CRU) in the Department of 
Foreign Affairs.  The Irish hope to use lessons learned in 
Northern Ireland to help other conflict areas of the world. 
The CRU's first initiative will be in East Timor. 
 
Development Assistance.  Ireland aims to contribute 0.7 
 
DUBLIN 00000616  005 OF 005 
 
 
percent of GDP to overseas development assistance by 2012. 
Africa is a particular focus. 
 
Cluster Munitions.  Ireland is a founding member of the Oslo 
Process, which seeks to ban cluster munitions, in part 
because of the personal interest of former Foreign Minister 
Dermot Ahern (now Minister for Justice), who witnessed the 
impact of unexploded ordinance on civilians in Lebanon 
following the Israeli incursion in July 2006.  During the May 
19-30 Dublin Cluster Munitions Conference, the Irish played a 
key role in achieving consensus on a Cluster Munitions 
Convention that took into the account the concerns that 
critical ongoing and future peacekeeping collaboration and 
existing alliances not be disrupted, and that the convention 
be compatible with the Convention on Conventional Weapons. 
FOLEY