VZCZCXYZ0000
OO RUEHWEB

DE RUEHUNV #0368/01 2151442
ZNR UUUUU ZZH
O 031442Z AUG 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9907
RHEHNSC/NSC WASHDC IMMEDIATE
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY
RHEBAAA/DOE WASHDC PRIORITY
RUEANFA/NRC WASHDC PRIORITY

UNCLAS UNVIE VIENNA 000368 
 
SENSITIVE 
SIPDIS 
 
FOR IO, ISN; DOE FOR NA-24, NA-25, NA-21; NSC FOR 
SCHEINMAN, CONNERY; NRC FOR DOANE, SCHWARTZMAN 
 
E.O. 12958: N/A 
TAGS: AORC PREL KNNP IAEA UN
SUBJECT: SUBDUED BOARD APPROVES IAEA BUDGET INCREASE, EYES 
WORK AHEAD 
 
REF: A. UNVIE 365 
     ¶B. STATE 80219 
 
¶1. (SBU) Summary:  Budget negotiations at the IAEA concluded 
successfully on August 3 with a Board of Governors' agreement 
to approve an increase of 5.4 percent.  The dozen statements 
from a wide range of Member States mostly focused on their 
"disappointment" with the end result.  They also previewed 
the particular budget issues that will affect the IAEA's fall 
agenda and the topics for the intended working group on 
priorities and resources.  Such topics include funding 
capital investment projects, sharing (or shrinking) the 
burden of safeguards financing, the proper place for 
technical cooperation and the statutory legitimacy of Nuclear 
Security.  The dreary atmosphere in the Board Room today was 
partly driven by fatigue, but also serves as a reminder that 
any negotiated solution rarely succeeds in satisfying all 
parties.  Several delegations, including South Africa, 
welcomed afterwards the U.S. financial commitment to the IAEA 
as reflected in our voluntary pledges and our agreement to 
engage constructively on financing technical cooperation. 
End Summary. 
 
¶2. (SBU) Board Members convened August 3 for a subdued, 
two-hour special session of the Board of Governors to seal 
recommendations to the General Conference to approve the IAEA 
2010 budget and indicative levels for 2011.  For the most 
part, participants used their national statements to 
highlight their "disappointment" in this or that aspect of 
the final proposal, which entails a 5.4 percent increase in 
the IAEA's regular budget (ref a).  The U.S. statement was 
the most positive, expressing appreciation for Member States' 
willingness to come to consensus, support the IAEA in its 
expanding mandate and recognize the importance of Nuclear 
Security (ref b).  Least constructive was the perfunctory 
statement read by Argentina on behalf of the Group of 77, 
expressing "dissatisfaction" that G-77 concerns were 
(supposedly) given short shrift in the final proposal.  Egypt 
was more thoughtful, stating that we all should have "dug 
deep in our pockets" to support an organization that seeks to 
advance our shared security.  (This was the first time Egypt 
publicly suggested that it would have supported a larger 
increase than the final figure.)  Less helpfully, Egypt went 
on to attack the "staggering increase" for Nuclear Safety and 
Security, and to reject explicitly that Nuclear Security is a 
core mission of the Agency.  Australia and others thanked the 
U.S. and Japan for extra budgetary contributions to finance 
the first phase of planning for the Safeguards Analytical 
Laboratory. 
 
¶3. (SBU) The dozen statements issued at today's meeting 
previewed the topics that will likely arise in the fall, 
particularly the September General Conference and the 
agreement to establish a working group on "priorities and 
resource requirements."  Topics regarding technical 
cooperation will also likely be affected by the budget 
negotiations.  For example, Egypt's heavy involvement in 
budget negotiations and responsibility for drafting the 
annual resolution on Technical Cooperation will guarantee the 
bleeding of budget issues into other business.  Looming 
topics as expressed in today's statements include: 
 
- Nuclear Security should be a separate Department from 
Safety due to the very different "nature" of its program 
activities and should rely on voluntary funds (Iran). 
 
- Nuclear Security is not a core, statutory function of the 
IAEA (Egypt). 
 
- It is not fair that the capital investment fund was funded 
from voluntary contributions and not from the Regular Budget 
(Norway). 
 
- The working group should focus on helping the IAEA postpone 
or abandon low priority activities (UK). 
 
- We should follow up on these initial steps to stabilize 
resources for Technical Cooperation and ensure continued 
"balance" among IAEA activities (South Africa). 
 
- The new Director General - Yukiya Amano of Japan - should 
take on efficiency as one of his top tasks (France). 
 
¶4. (SBU) The Secretariat will take the next nearly six weeks 
to prepare the budget proposal for final approval by the 
 
annual General Conference, September 14-18.  In the meantime, 
Mission will relay to Washington any developing plans for the 
working group on priorities and resources, while keeping an 
eye on budget-related issues affecting the fall agenda. 
 
Comment 
------- 
 
¶5. (SBU) The conclusion of marathon negotiations like this 
one can be characterized by a sense of victory, if not 
euphoria.  But the subdued atmosphere in the Board Room today 
reflects the sense that major issues remain unaddressed, 
including the failure to gain consensus on notional figures 
for 2011 and the unresolved capital requirements of the 
IAEA's safeguards lab.  Member States are depending on 
re-engaging in budget negotiations after a short hiatus, as 
well as involving themselves in the working group on resource 
issues.  The numerous expressions of disappointment from 
around the room suggested that the past five months of 
negotiations led to a truly diplomatic outcome - one without 
big winners or big losers, but also one that conveys no 
consensus view of the IAEA as it should be. 
PYATT