VZCZCXRO2484
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTL #0106/01 1071105
ZNR UUUUU ZZH
R 171105Z APR 09
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 1109
INFO RUEHVL/AMEMBASSY VILNIUS 6786
RUEHMO/AMEMBASSY MOSCOW 2653
RUEHSI/AMEMBASSY TBILISI 0197
RUEHKV/AMEMBASSY KYIV 0024
RUEHNO/USMISSION USNATO BRUSSELS BE
RUEATRS/DEPT OF TREASURY WASHDC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 TALLINN 000106 
 
SIPDIS 
SENSITIVE 
 
FOR EUR/NB and H 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON ENRG OREP AMGT ASEC RU EN
SUBJECT: ESTONIA TO CODEL BERKLEY: U.S. VALUES MAKE WORLD 
BETTER 
 
REF: TALLINN 87 
 
¶1. (SBU) SUMMARY: The April 14-15 visit to Tallinn by the 
Congressional delegation led by Representative Shelley 
Berkley (D-NV) provided an occasion for a clear affirmation of 
the strong U.S.-Estonia relationship.  Media coverage was 
widespread and positive.  All Estonian interlocutors urged 
caution on U.S. engagement with Russia, and expressed concern 
that Ukraine would be the next target of Russian aggression. 
Both sides agreed on the importance of energy diversification 
in the face of Russia's energy gamesmanship.  Senior officials 
from the Bank of Estonia emphasized that the Government of 
Estonia (GOE) had exhausted its fiscal stimulus options over 
the past 18 months, but remained on track for Euro accession 
in 2011.  GOE officials affirmed that relations between the 
ethnic 
Estonians and Russians in Estonia were progressing in a 
positive direction.  Prime Minister Ansip's key message to the 
Congressional delegation was: "Keep U.S. values the same, and 
the world will be better." END SUMMARY. 
 
¶2. (SBU) During a two-day stop in Tallinn en route to 
Prague for the Trans-Atlantic Legislators' Dialogue, the 
seven-member CODEL Berkley discussed financial stability, 
Russia, energy and integration issues with Prime Minister 
Andrus Ansip, President Toomas Hendrik llves, parliamentary 
leaders, the Governor of the Bank of Estonia (BOE) and 
Estonia's preeminent think tank. Representative Berkley was 
accompanied by Rep. Virginia Foxx (R-NC), Rep. Phil Gingrey 
(R-GA), Rep. Paul Kanjorski (D-PA), Rep. Ron Klein (D-FL), 
Rep. John Carter (R-TX), and Rep. Steve Cohen (DTN). 
 
THE ECONOMY: Glimmers of Hope, but Recovery Slow 
 
¶3. (SBU) Senior officials at the Bank of Estonia told the 
CODEL that recovery would depend on regional and global 
recovery as Estonia's economy is export driven (foreign trade 
equaling more than 150 percent of GDP). They added that the 
Nordic banks which dominate Estonia's banking sector were 
stable and had sufficient capital buffers to resist further 
increases in the non-performing loan (NPL) ratio (currently at 
4 percent.  BOE Deputy Governor Marten Ross explained that 
Estonia did not have plans to introduce additional stimulus 
programs now.  The recession began six months earlier in 
Estonia than in the U.S., he explained, and the GOE used up 
its fiscal stimulus tools then. BOE Governor Lipstok affirmed 
that Estonia remained on track to adopt the Euro by 2011, and 
intended to maintain a low government deficit (less than 3 
percent).  Also on a positive note, trading with Russia was 
marginally easier now, the Estonian side noted, as Russian 
firms seemed more cost-sensitive, and more willing to put the 
bottom line ahead of politics. 
 
ENERGY: Diversify the neighborhood 
 
¶4. (SBU) PM Ansip highlighted the importance of regional 
projects to diversify Estonia's energy supply. He asserted 
that Estonia was prepared to invest in a new nuclear power 
plant (NPP) to replace the one in Lithuania, but he noted 
Estonia was also considering its own domestic NPP (using U.S. 
technology).  Ansip also highlighted Estonia's plans to build 
a second undersea electricity cable to Finland by 2013, and 
the possibility of an LNG terminal "in the region" to further 
diversify supply routes. 
 
¶5. (SBU) Speaker of Parliament Ene Ergma and MP Sven Mikser 
both highlighted Russia's efforts to control energy flow from 
the Caspian Sea.  Mikser maintained that ongoing conflicts in 
the Caspian region led Russia to covet Georgia's access to the 
sea as a potential route to move Russian fuel into Western 
Europe. President lives also outlined his concern over 
Russia's use of energy to wield political influence in Europe, 
noting Gazprom executives had successfully recruited EU 
officials to make their case. 
 
RUSSIA: Cautious about U.S. "reset" button 
 
¶6. (SBU) Across the board, the Estonians stressed the 
importance of western unity in dealing with Russia.  PM Ansip 
expressed his concern that Ukraine would be the next target of 
Russian aggression, and he expressed gratitude to President 
Obama for reaffirming NATO's Article V collective defense 
 
TALLINN 00000106  002 OF 003 
 
 
guarantee. Speaker Ergma urged the U.S. to continue to try to 
find a solution "to Russia," but noted that reducing the 
number of nuclear weapons "wouldn't make that much difference 
since all that was required was one or two nuclear weapons." 
MP Sven Mikser added that the West had agreed to certain 
sanctions on Russia after its invasion of Georgia.  Should we 
reward Russia, he asked, because the U.S. elected Obama?  It 
was important to remember, he concluded, that Russia was still 
corrupt, there was no rule of law, and the West should re- 
engage based on progress inside Russia, not outside events. 
Most Estonians with whom the CODEL met emphasized that the 
U.S. should continue to impress upon Russia that the time for 
dividing the world into spheres of influence is over. 
 
¶7. (SBU) Kadri Liik, Director of the International Center for 
Defense Studies, echoed remarks by former EUR DAS David Kramer 
at a conference in Tallinn in March, saying "Russia will try 
to screw the United States whenever it can."  Resetting 
relations with Russia, she maintained, would only lead to a 
temporary thaw in relations.  Russia needed to behave more 
like an adult and less like a "rebellious teenager" or real 
progress will be impossible.  On issues that were in Russia's 
interest (such as containing Iran's nuclear ambitions), Liik 
said she believed Russia would always be more concerned with 
blocking America than with cooperation.  Echoed later by the 
Speaker and the President, Liik said that the intertwining of 
government authority and the intelligence services in Russia 
would make real democratic change impossible to achieve. 
 
INTEGRATION: Russian Influence 
 
¶8. (SBU) Both President Ilves and the MPs stressed that, 
overall, relations were good between ethnic Estonians and 
Russian speakers in Estonia.  While there were no active or 
influential Russian political parties, MPs maintained that 
ethnic Russians were represented in Parliament by virtue of 
their membership in Estonian political parties.  President 
Ilves acknowledged that there were a large number of 
Russian citizens and "stateless" residents in Estonia, but he 
pointed out that while they were not part of the Estonian 
mainstream, the fact that they were content to live and work 
in Estonia meant that they did not wish to be part of the 
Russian Federation either.  MP Mikser said there were some 
agitators with "links across the border" who sought to provoke 
ethnic tensions in Estonia, but he cautioned that the Bronze 
Soldier riots of April 2007 had to be seen in perspective. 
These disturbances were perpetrated by "a small band of 
rioters" (1,500 individuals out of a Tallinn population of 
400,000) who broke windows and set a few cars on fire.  Mikser 
pointed out that in France, on the night President Sarkozy was 
elected, protestors set more than 700 cars ablaze. 
 
MESSAGE TO THE AMERICAN PEOPLE 
 
¶9. (U) Ansip told the CODEL that Estonia owed its re- 
independence in 1991 as much to President Reagan and the U.S. 
non-recognition policy, as to its own efforts.  This, coupled 
with America's strong values system and its defense of 
freedom, made it Estonia's "moral duty" to support American 
policy today. Asked for one message that he would send to the 
U.S. Congress, Ansip said: "Keep U.S. values the same and the 
world will be better." 
 
MEDIA COVERAGE 
 
¶10. (U) CODEL Berkley and PM Ansip reaffirmed our strong 
bilateral ties in a joint press conference.  Questions touched 
on regional energy security and the financial crisis, and 
overall coverage of the visit was very positive.  In terms of 
reach, and in spite of a competing news event across town, 
media attendance and coverage of the joint press conference 
was good, with Estonian State Television (ETV), Kanal 2 
(Estonia's most popular television broadcaster), Molodyozh 
Estonii (the oldest and most respected Russian-language 
newspaper in Estonia), as well as Estonian Public Radio 
covering the event.  In addition, the Baltic News Service 
(BNS), a pan-Baltic wire service, carried articles of the 
visit and press conference in their 4/16 roundup.  Online 
reporting and coverage also was active across a broad range of 
outlets. 
 
¶11. (U)  CODEL Berkley cleared this cable. 
 
TALLINN 00000106  003 OF 003 
 
 
 
DECKER