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DE RUEHTL #0357/01 3350754
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R 010754Z DEC 09
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 0254
INFO RUEHHE/AMEMBASSY HELSINKI 0014
RUEHRA/AMEMBASSY RIGA 0059
RUEHTL/AMEMBASSY TALLINN
RUEHVL/AMEMBASSY VILNIUS 0061

C O N F I D E N T I A L TALLINN 000357 
 
SIPDIS 
DEPT FOR EUR/FO QUANRUD 
DEPT FOR EUR/NB 
 
E.O. 12958: DECL: 2019/12/01 
TAGS: PREL PGOV ECON EN
SUBJECT: Estonia Scenesetter for DAS Quanrud 
 
CLASSIFIED BY: Marc Nordberg, Political/Economic Chief; REASON: 
1.4(B), (D) 
 
Classified by CDA Karen Decker for Reasons 1.4 B & D. 
 
 
 
¶1. (C) SUMMARY: Thank you for coming to Tallinn.  Estonia is 
strongly supportive of USG policies, joining us in Afghanistan and 
in other missions abroad to buttress their own security, but also 
as a result of  Estoniabs very real commitment to democracy.   Fear 
of Russian aggression and/or manipulation colors the average 
Estonian outlook of the future, and results in widespread reliance 
on NATO and an almost mystical faith in Article 5 of the Washington 
Treaty to keep Estonia free.  The U.S. is viewed as the strongest 
underpinning  of NATO, and therefore, of Estoniabs security.  While 
the recent push from Washington to reiterate U.S. support for 
central/eastern Europe, including Vice President Bidenbs visit to 
central Europe, has had a positive impact publicly here, we 
recommend a robust push during your visit not only to reinforce our 
commitment to our partnership with Estonia, but also to highlight 
our expectations on the Estonian side.  For your visit, Estonia 
will be focused mostly on NATO security issues, Afghanistan and the 
economy.   Your Estonian interlocutors support a new Strategic 
Concept for NATO, but are even more interested in tangible signs 
that NATO has a plan for Baltic security.  We recommend you address 
their concerns as much as possible, but we also recommend you 
remind the Estonians that as a NATO ally they bear responsibility 
for helping to build and sustain NATO consensus on such an 
important issue.    The Estonians will welcome an update on missile 
defense plans.   On the economy, we expect the  GOE will stress to 
you that Estonia is managing its economy, and will argue against 
lumping the Baltic States together as a single entity in any 
analysis.  They have a point:  Estonia has lent Latvia b,,100 million 
to help bolster the Latvian economy, and is so far on track to meet 
the Maastricht Criteria to join the Euro Zone in January 2011. 
 
 
 
¶2.  (SBU) During your first official visit to Tallinn, you will 
meet with the Prime Ministerbs economic advisor for an overview of 
the Estonian economy, energy issues, and opportunities for 
cooperation with the United States (the Prime Minister and his 
foreign policy advisor will be hosting the Belgian PM b" and future 
EU president, the day of your visit).  MFA Under Secretary Harri 
Tiido, who is double-hatted as Ambassador to Afghanistan, will 
discuss Afghanistan, Estonian bilateral assistance, and security 
issues.  Tiido will have spent most of the day at a 
Nordic/Baltic/UK policy conference on Afghanistan, so he will be 
able to share regional thinking on the Presidentbs new Afghanistan 
policy.  You will then meet with several top MPs: Chair of the 
European Affairs Committee (and Russia expert) Marko Mihkelson, 
National Defense Committee Chairman Mati Raidma, and head of the 
U.S. b" Estonia group Keit Pentus.  The 2010 budget, as well as 
overseas military deployments (including Afghanistan), will go for 
a vote the day of your visit, but these MPs have committed to meet 
with you.  Lastly, you will have dinner with several members of the 
International Center for Defense Studies, Estoniabs leading think 
tank, to discuss security issues and USG engagement in the region. 
END SUMMARY. 
 
 
 
 
 
Strong Contributor to International Peace and Security 
 
--------------------------------------------- --------------------- 
 
 
 
¶3. (C) A country of only 1.3 million people, Estonia punches well 
above its weight in promoting international security.  The GOE sees 
joint security operations  as a way of gaining valuable experience 
from (and scoring points with) the United States, but its 
participation also stems from a sense of obligation  to western 
nations and NATO after  Estonia regained its freedom from the USSR. 
Estonia currently has nine percent of its land forces deployed 
abroad (all of which operate without any caveats), perhaps the 
highest level in NATO.  For five months this year, Estoniabs 
deployment percentage approached 14 percent, when Estonia provided 
an additional company for  election security in  Afghanistan. 
Estonia maintains 140 troops in Helmand and is currently 
considering sending additional contributions.  Estonia had a 
platoon embedded with U.S. counter-insurgency forces in Iraq from 
2003-2009, but had to remove them after failing to negotiate a new 
SOFA with Iraq.  Instead, a small number of staff officers remain 
 
with NTM-I.  Estonia also has a platoon in Kosovo, and officers in 
Bosnia and Lebanon.  There have been six KIA in Afghanistan and two 
in Iraq. 
 
 
 
¶4. (SBU) The GOE matches its military contribution with civilian 
assistance, although the economic crisis has forced Estonia to cut 
its foreign assistance from EEK 60 million [USD 5.5 million] in 
2008 to EEK 40 million [USD 3.7 million] this year.  Estonia 
focuses the majority of its assistance on four countries, 
Afghanistan, Georgia, Ukraine and Moldova, but has also trained 
Iraqi diplomats and provided relief to Pakistani refugees, among 
other projects.  As on the military side, the GOE is very 
interested in finding ways to work with the U.S. on civilian 
assistance projects. 
 
 
 
 
 
NATO/Article 5: Back in Area or out of Business 
 
--------------------------------------------- ------------- 
 
 
 
¶5. (C) Ever since the 2008 war in Georgia showed that Russia was 
willing to send its military across international borders, Estonia 
has been  concerned that NATO lacks detailed defense planning for 
the Baltics.  You should expect your GOE and think tank 
interlocutors to express their belief that  NATO should plan for 
every Article 5  eventuality, including the defense of the Baltics. 
While the GOE is an active proponent of contingency planning, it 
also believes that all discussions of contingency planning should 
remain private, within the NATO family.  As one subset of this 
issue, Estonia is pleased that Baltic Air Policing has been 
extended to 2014 (NATO members provide four fighters on a rotating 
basis, flying out of Lithuania), but is  looking for additional 
evidence of Article 5 bteeth,b  such as military exercises.  Recent 
U.S. ship and other military visits have been very warmly received. 
The 800-pound Bear in the Room 
 
---------------------------------------- 
 
 
 
¶6. (C) Still scarred by more than 50 years of Soviet occupation, in 
which up to 20 percent of the Estonian population was killed or 
forcibly deported, Estonians remain fixated on bthe Russian 
threat.b  For Estonia, that threat has a particular internal 
dynamic.   Approximately 30 percent of Estoniabs population is 
Russian-speaking.  Of this group, 25 percent are Russian citizens 
and 27 percent remain stateless (the rest are Estonian citizens). 
The GOE has programs to integrate the Russian population and to 
teach Estonian in all schools.  Progress is slow, and the 
north-east of the country, as well as large parts of Tallinn, 
remain Russian-speaking.  Relations between ethnic Estonians and 
Russian speakers are generally good, but boiled over in spring 2007 
when the GOE relocated a Soviet-era (bBronze Soldierb) statue from 
the city center.  Ethnic Estonians saw the statue as a reminder of 
Soviet occupation, but ethnic Russians saw the relocation as an 
insult to Soviet troops who died bliberatingb Estonia.  While these 
riots have not been repeated and the GOE has made some additional 
efforts to integrate its Russian-speaking population, Estonians and 
Russian speakers do not commonly mix. Russian speakers are not 
politically active and as Estonian language skills are required for 
government jobs, feelings of disenfranchisement can be strong in 
Russian-speaking areas. 
 
 
 
¶7. (C) State-to-state relations between Moscow and Tallinn are 
correct but cold.  Ministerial-level contacts are few and 
formalized, though working-level contacts (especially between 
groups like the Border Guards) are ongoing and substantive.  In 
regional and international fora, however, Estonia often finds 
itself the focus of Russian charges of fascism, which dilutes the 
possibility that international relations will improve in the near 
term. 
 
State of the Nation: Minority Coalition, Sinking Economy 
 
--------------------------------------------- ---------------------- 
-- 
 
 
 
¶8. (SBU) In May of this year, the ruling coalition fell apart after 
disputes over the budget and unemployment compensation, resulting 
in the current minority government.  The center-right coalition 
holds 50 of 101 seats in parliament, but appears stable.  The 
government maintains a proactive, pro-western foreign policy and a 
liberal, pro-business economic agenda. 
 
 
 
¶9. (SBU) After stellar GDP growth for much of this decade, 
averaging seven percent annually, Estoniabs export-led economy has 
taken a sharp hit.  GDP will fall 14 percent this year before 
bottoming out in 2010.  Unemployment is approaching 20 percent. 
Despite these figures, Estonia is still faring better than the 
other Baltics (and you can expect your interlocutors to point this 
out).  Unlike Latvia, for instance, Estonia ran annual budget 
surpluses during the growth years and resisted raising social 
transfer payments.  Estoniabs better fiscal situation allowed the 
GOE to lend Latvia b,,100 million as part of the EU bailout. 
 
 
 
¶10. (SBU) The GOEbs main policy goal is to join the Euro Zone in 
¶2011.  Estoniabs currency, the kroon, has been pegged to the Euro 
since inception in 1992.  Because of efforts to meet the Maastricht 
Criteria, Estonia lacks fiscal and monetary means of dealing with 
the economic crisis.  To qualify for the euro, in FY09 the GOE cut 
an equivalent of 7.1 percent of GDP from the budget.  Among other 
measures, all government employees have taken an eight percent 
salary cut and many have been laid off.  To ensure the FY10 budget 
does not exceed the Maastricht limit of three percent deficit, the 
GOE is raising taxes and further cutting spending.   Parliament 
will vote on the budget during your visit, but it is expected to 
pass readily.  Such austerity measures have not resulted in general 
dissatisfaction and the populace remains supportive of adopting the 
Euro. 
 
 
 
 
 
Cyber Security: Estonia Leads the Way 
 
--------------------------------------------- - 
 
 
 
¶11. (C) While we do not expect cyber security to be a major focus 
of your visit, cyber security does constitute a major piece of 
Estoniabs international agenda.  Concurrent with the Bronze Soldier 
riots in 2007 were massive Denial of Service attacks against 
Estoniabs internet architecture.  In response, Estonia stepped up 
development of its Cyber Defense Center, which NATO accredited as a 
Center of Excellence in 2008.  In November 2007 the U.S. became the 
first country to send a representative to the center.  The USG 
currently has one naval civilian at the center.   Secretary of 
Defense Gates visited the center in November 2008 and recommended 
the U.S. become a "Sponsoring Nation."  DoD is currently reviewing 
this sponsorship.  The Center has completed some interesting 
strategic analyses on such topics as the status of cyber attacks 
under international law and cyber defense under Article 5. 
 
 
 
 
 
USG Engagement in the Region 
 
------------------------------------- 
 
 
 
¶12. (C) Influential Estonians, although NOT Government of Estonia 
officials, joined with other central/eastern European leaders to 
send an Open Letter to the Obama Administration last July signaling 
their concern at a perceived loss of engagement by the U.S. in 
 
central/eastern Europe.  One of the signatories, Kadri Liik, has 
been invited to dinner, which will give you a good opportunity both 
to hear Estonian concerns first-hand and refute them. It will also 
give you a chance to set the record straight on issues like Missile 
Defense.     For instance, Estonians intellectually know that the 
September 17 announcement of the Phased Adaptive Approach for 
Missile Defense was driven by the changing threat from Iran. 
Emotionally, however, they fear it was a concession to Russia, at 
the expense of U.S. relations with Poland and the Czech Republic. 
You should be prepared to provide an update on USG Missile Defense 
plans, and to describe USG plans to demonstrate its ties to the 
region. 
 
 
 
¶13.  (U) Again, thank you for coming! 
DECKER