VZCZCXYZ0000
OO RUEHWEB

DE RUEHUNV #0074 0511454
ZNR UUUUU ZZH
O 201454Z FEB 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9037
RHEBAAA/DOE WASHDC IMMEDIATE
INFO RUEHXX/GENEVA IO MISSIONS COLLECTIVE PRIORITY
RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY
RUEHRO/AMEMBASSY ROME PRIORITY 0421
RHEGGTN/DEPT OF ENERGY GERMANTOWN MD PRIORITY
RUEHFR/USMISSION UNESCO PARIS PRIORITY
RUCNDT/USMISSION USUN NEW YORK PRIORITY 1505

UNCLAS UNVIE VIENNA 000074 
 
SENSITIVE 
SIPDIS 
 
FOR IO, ISN, DOE FOR NA-24, NA-25, NA-21 
 
E.O. 12958: N/A 
TAGS: AORC PREL KNNP IAEA UN
SUBJECT: IAEA BUDGET KICK-OFF LESS CONTENTIOUS THAN 
IMAGINED, BUT ISSUES LOOM 
 
REF: UNVIE 57 
 
¶1. (U) Summary: The IAEA opened 2010-2011 budget negotiations 
with an informal presentation on February 20.  Most Member 
States expressed concern over the size of the proposed 
increase, but were not as aggressive as Mission had expected. 
 Members of the G-77 took particular issue with the proposed 
increases for the Nuclear Security program (NS), stating that 
any attempt to incorporate NS into the regular budget will 
bring about calls for equal treatment of the Technical 
Cooperation program (TC).  End Summary. 
 
¶2. (U) On February 20 the IAEA Board Chair and Secretariat 
provided an informal presentation of the 2010-2011 biennial 
budget.  Deputy Director General David Waller highlighted the 
more important aspects of the budget, including the 11 
percent increase in the so-called "operational budget" and 
the creation of a "major capital investment fund" (MCIF).  As 
reiterated by Germany, the total increase to the regular 
budget amounted to 23 percent. 
 
¶3. (U) Canada, Japan, Australia, Russia, and Germany were 
skeptical about the "unprecedented" increase.  While they 
assured their commitment to seeing the Agency fulfill its 
statutory requirements, major donors called on the Agency to 
demonstrate efficiency gains.  Additionally, donor states 
were disappointed that the budget showed an increase across 
almost all subprograms without reflecting corresponding 
efforts to prune programs of lower priority.  Even the 
Philippines asked if further review of priorities would 
permit proposed expenditures to be pushed off past 2011.  The 
U.S. delivered Washington-cleared talking points that 
expressed support for the Agency without boldly committing 
the U.S. to a position of support.  (Note: In side 
conversations, the UK and Germany both intimated that they 
had not received instructions because their capitals were 
still "in shock."  End Note.) 
 
¶4. (U) The G-77 did not present a consensus position, but it 
was clear that individual Members would not agree to so broad 
an increase if it were not coupled with more regular budget 
funding for technical cooperation (TC).  South Africa, Egypt 
and Cuba were particularly strong on this point.  DDG Waller 
responded by pointing out that TC currently receives over 16 
million Euros from the regular budget while NS receives only 
1 million, a level that he called "pathetic." 
 
¶5. (U) Iran criticized "disproportionate" increases for 
security and safeguards in the proposed budget, complaining 
more than once that security was overemphasized.  On the 
sidelines of the meeting, Iran also questioned other Members 
about their views on folding TC into the regular budget. 
 
¶6. (U) A cross section of Member States agreed that the world 
financial crisis would significantly impact their ability to 
approve such a large budget increase.  A need for efficiency 
was stressed in most statements.  Additionally, some Member 
States expressed interest in holding the General Conference 
biennially as a cost-saving measure. There was also some 
discussion on the Amendment to Article XIV A which would 
biennialize the budget (septel). 
 
¶7. (SBU) Comment: Private conversations with our allies 
revealed negative views of the proposed budget, but their 
actual interventions were not nearly as inflammatory.  In 
part, the muted response among budget hawks can be attributed 
to lack of instructions from their respective capitals.  It 
is not clear where the G-77 stands in relation to the 
proposed increase, though the economic crisis will impact 
them as well.  Whatever the final G-77 position, it is 
apparent that any increase for NS will reinvigorate calls for 
regularizing TC. There is strong Geneva Group interest in 
developing a consensus position leaning toward zero real 
growth.  Per reftel, UNVIE will need to be prepared to 
discuss the intricacies of the budget and share the official 
U.S. position in the coming weeks.  End Comment. 
SCHULTE