VZCZCXRO9299
PP RUEHAT
DE RUEHRL #0603/01 1401704
ZNR UUUUU ZZH
P 201704Z MAY 09
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 4162
INFO RUEHMD/AMEMBASSY MADRID PRIORITY 0683
RUEHFR/AMEMBASSY PARIS PRIORITY 0422
RUEHAT/AMCONSUL AMSTERDAM PRIORITY 0033
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 03 BERLIN 000603 
 
SENSITIVE 
 
SIPDIS 
TRANSPORTATION FOR EDDIE CARAZO; JKESSLER AT EUR/ERA; 
PSCHROEDER, CHODGES AT EUR/CE;JBYERLY AT EEB/TRA 
 
E.O. 12958: N/A 
TAGS: EAIR ELTN GM OVIP PGOV PREL
SUBJECT: SCENESETTER FOR SECRETARY LAHOOD'S VISIT MAY 
27-28, 2009 
 
REF: A. PARIS 669 
     ¶B. MADRID 467 
 
¶1. (SBU) Summary: Mission Germany warmly welcomes your visit 
to Germany for the International Transport Forum in Leipzig. 
Of the larger European Union member states, Germany holds the 
greatest untapped potential for our transatlantic agenda, but 
much will have to be settled at the ballot box this year.  In 
recent weeks, political parties have announced their 
platforms and turned their attention to both the June 7 
European parliamentary elections as well as Germany's general 
election, scheduled for September 27.  Transportation 
Minister Wolfgang Tiefensee has received mixed press and 
tepid support from his party, and his prospects for a federal 
level position after September are unclear.  In your working 
dinner on May 27, Tiefensee will likely raise high speed 
railways, U.S. plans for the Copenhagen meeting on the UN 
Framework Convention on Climate Change (UNFCCC) and 
transportation emissions regulations; he is aware of your 
interest in Open Skies and high speed rail as well as U.S. 
concerns about ETS.  With a backdrop of growing concern in 
Germany and elsewhere in Europe about a massive drop in U.S. 
demand for imports, your remarks on infrastructure plans in 
the United States, particularly those that may benefit 
foreign suppliers, will be of strong interest.  End Summary. 
 
 
---------------------------- 
GERMANY IN PRE-ELECTION MODE 
---------------------------- 
 
¶2. (SBU) All levels of the German government are 
increasingly feeling the heat of the campaign season, which 
will pit Grand Coalition partners Chancellor Angela Merkel 
(Christian Democrat Union) and the Foreign Minister 
Frank-Walter Steinmeier (Social Democratic Party) against one 
another.  Polls indicate the continuation of the Grand 
Coalition as the most likely result.  Just four months before 
national elections, Merkel,s poll numbers are wobbling. 
Short-term domestic political considerations, the slow pace 
of change in public support for a German leadership role, and 
the constant demands of the economic crisis dominate German 
politics.  Tiefensee's accomplishments include long-term 
research & development financing for fuel cell mobility, 
successfully concluding the first round of Open Skies 
negotiations during Germany's EU presidency, and attracting 
foreign investors (including American firm, First Solar) into 
the former eastern Laender.  His handling of the proposed 
privatization of Deutsche Bahn has received much criticism. 
German press suggests that Steinmeier may find another 
visible SPD politician from the eastern states to take the 
place of Tiefensee, the former mayor of Leipzig, after the 
elections. 
 
---------- 
COPENHAGEN 
---------- 
 
¶3. (SBU) Tiefensee will likely ask what position the U.S. 
intends to take at the UNFCCC meeting in Copenhagen in 
December 2009.  He regards the U.S. position as pivotal for 
progress toward a global agreement, especially in winning 
over emerging economies. 
 
 
---------- 
OPEN SKIES 
---------- 
 
¶4. (SBU) Regarding the next round of Open Skies  negotiations 
planned for after the EU parliamentary  elections, German 
government officials and industry express concern that 
German/EU airlines have yet to be granted the same extensive 
rights in the United States.  They argue that stage one of 
Open Skies has already been implemented in the EU, granting 
U.S. airlines the right to fly to other domestic destinations 
after arrival (cabotage) and especially giving them enhanced 
access to Heathrow Airport.  Germany is also concerned about 
U.S. limitations on foreign ownership of American airlines 
(25%). 
 
 
----------------- 
EMISSIONS TRADING 
----------------- 
 
BERLIN 00000603  002 OF 003 
 
 
 
¶5. (SBU) The European cap and trade emissions system for 
aviation (ETS), which is due to go into effect in 2012 has 
become a bilateral irritant.  The German government supports 
the inclusion of non-EU airlines in the ETS for competitive 
reasons, fearing that their exclusion would create a 
competitive disadvantage for German airlines.  Lufthansa 
publicly expressed support for this position; privately it 
has been more equivocal.  The Government and Lufthansa see 
ETS as only one of a series of measures such as improved air 
traffic management and technological advances to reduce 
aircraft emissions. 
 
¶6.  (SBU) The German Emissions Trading Agency has requested 
that U.S. airlines submit data necessary for their 
participation in ETS by the end of August 2009. While most 
U.S. airlines oppose the EU ETS and favor a global solution 
under the International Civil Aviation Organization (ICAO), 
they risk financial disadvantages if they do not submit the 
data.  Their participation under protest may leave open the 
possibility of future litigation while protecting their 
airlines from negative consequences, such as the 
non-allocation of free ETS certificates. 
 
 
----- 
RAIL 
----- 
 
¶7. (U) The German government and public and private sector 
industries are very interested in the impact of the Obama 
Administration stimulus package and its emphasis on greening 
the American economy.  They see these developments as 
opportunities to market German products, including high-speed 
rail components, in the U.S. Germany is a world leader in the 
production and administration of high-speed rail systems. Its 
major cities are linked by a high-speed Inter-City rail net 
with frequent services provided by Siemens ICE rolling stock. 
 In 2008, Germany and France introduced high-speed rail links 
between Paris, Frankfurt, and Stuttgart.  The next generation 
of high speed trains, the Siemens ICE 3 (Velaro), will go 
into operation in 2011 and reach speeds of up to 320 km/h. 
During the Clinton Administration, there was considerable 
U.S. interest in the German Magnetic Levitation rail system 
(Maglev) known as Transrapid in Germany.  Siemens has already 
exported the train to Spain, Russia and China.  However, work 
by a consortium formed by Siemens and ThyssenKrupp to 
research and build such a system in Germany has not advanced. 
 
 
¶8. (U) Minister Tiefensee played a leading role in recent 
events leading to the resignation of the CEO of German State 
Railways (Deutsche Bahn) at the end of April.  DB, a global 
logistics enterprise as well as a railroad company with a 
payroll of nearly 200,000 employees, was accused of illegally 
gathering data on employee bank accounts, e-mails, trade 
union activities and contact with outside bodies.  Tiefensee 
was under considerable pressure to resolve the crisis and 
pushed it to resolution.   Independent investigators have 
confirmed that DB violated the law to spy on all its 
employees repeatedly, allegedly to combat corruption. DB's 
new CEO has fired several board members and senior managers. 
The prosecutors are now determining whether to press criminal 
charges. 
 
¶9. (SBU) Minister Tiefensee,s initiative to privatize a 
minority share of DB did not succeed.  DB's previous CEO 
hoped to use the measure to procure more capital investment 
and lessen political interference in DB operations. 
Especially disputed was whether DB should be left as an 
integrated corporation still owning track and infrastructure, 
or whether track and infrastructure should be separated from 
DB to promote competition.  After the initial goal of 
privatizing 50% was abandoned, Tiefensee postponed the 
privatization of a 25% share, partly because of increasing 
opposition from his own party (SPD).  The employee spying 
scandal has virtually eliminated the legislative prospects 
for privatization during the remainder of this session. 
 
 
------------- 
OPEL'S FUTURE 
------------- 
 
¶10.  (U) The possible bankruptcy of General Motors causes 
 
BERLIN 00000603  003 OF 003 
 
 
considerable worry in Germany as it could adversely affect 
German auto parts suppliers and Opel. (Note: Opel, which is a 
100% subsidiary of General Motors, is fighting for its 
survival.)  The German government, led by Economics Minister 
zu Guttenberg has been in close consultation with U.S. 
Treasury and GM on Opel,s future; Tiefensee,s Ministry has 
not had much of a role. The German government is currently 
considering approval of a trust fund for Opel and is 
examining several bids from entities interested in acquiring 
majority ownership of Opel. 
Koenig