VZCZCXYZ0013
RR RUEHWEB

DE RUEHRL #0156/01 0351407
ZNR UUUUU ZZH
R 041407Z FEB 10
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC 6473
INFO RHEHAAA/WHITE HOUSE WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCNFRG/FRG COLLECTIVE
RUEHBS/AMEMBASSY BRUSSELS 1992
RUEHLO/AMEMBASSY LONDON 0718
RUEHFR/AMEMBASSY PARIS 1235
RUEHRO/AMEMBASSY ROME 2735
RUEHNO/USMISSION USNATO 1754
RUEHVEN/USMISSION USOSCE 0915
RHMFIUU/HQ USAFE RAMSTEIN AB GE
RHMFISS/HQ USEUCOM VAIHINGEN GE//J5 DIRECTORATE (MC)//
RHMFISS/CDRUSAREUR HEIDELBERG GE
RUZEADH/UDITDUSAREUR HEIDELBERG GE

UNCLAS BERLIN 000156 
 
STATE FOR INR/R/MR, EUR/PAPD, EUR/PPA, EUR/CE, INR/EUC, INR/P, 
SECDEF FOR USDP/ISA/DSAA, DIA FOR DC-4A 
 
VIENNA FOR CSBM, CSCE, PAA 
 
"PERISHABLE INFORMATION -- DO NOT SERVICE" 
 
SIPDIS 
 
E.0. 12958: N/A 
TAGS: OPRC KMDR US CH IR AF EU US ECON
SUBJECT: MEDIA REACTION: U.S.-EU, U.S.-CHINA, IRAN, AFGHANISTAN, 
EU-GREECE, U.S.-SPACE, ECONOMIC-DAVOS;BERLIN 
 
¶1.   Lead Stories Summary 
¶2.   (U.S.-EU)   Fallout from Cancellation of Summit 
¶3.   (U.S.-China)   Arms Exports to Taiwan 
¶4.   (Iran)   Nuclear Program, Missile Test 
¶5.   (Afghanistan)   Karzai, Future Strategy 
¶6.   (EU-Greece)   Financial Crisis 
¶7.   (U.S.)   Space Travel 
¶8.   (Economic)   Davos Economic Forum 
 
 
¶1.   Lead Stories Summary 
 
ZDF-TV's primetime newscast Heute opened with a story on the token 
strikes in the public service sector.  ARD-TV's primetime newscast 
Tagesschau and most papers led with stories on the EU response to 
the budget crisis in Greece.  Berliner Zeitung und Frankfurter 
Rundschau led with stories no the German government's first 100 days 
in office, and Sddeutsche led with a story on the debate over tax 
havens.  Die Welt carried a large front-page photo of yesterday's 
event at the American Academy, showing elder statesmen, including 
former Secretaries of State Kissinger and Schultz.  Editorials 
focused on the government's first 100 days and the financial crisis 
in Greece. 
 
¶2.   (U.S.-EU)   Fallout from Cancellation of Summit 
 
President Obama's decision not to attend the EU-U.S. summit meeting 
in Madrid no longer makes the headlines in the German press.  Only 
Sueddeutsche Zeitung (2/4) carried an editorial under the headline: 
"Summit of Disappointment," and opined: "The world of diplomacy 
hardly knows anything that is more impolite than to decline an 
invitation to a summit and then inform the other side of this 
decline through the media.  For this reason, the Europeans are right 
to look with a certain degree of irritation to Washington.  We 
should now not complain about the end of European-American 
friendship but Obama's cancellation is, nevertheless, remarkable. 
On the one hand, it demonstrates the domestic pressure on the 
President.  Obviously, Obama is not even able to leave Washington 
for a mere 48 hours to meet his most important allies.  The fear 
that the Republicans could attack him during his absence is just too 
great.  But, at the same time, his cancellation makes clear Obama's 
view of Europe.  He is the first president who has no family or 
emotional links to the old world.  Obama's world is Africa, where 
his father came from, and Indonesia, where he lived as a youth.  The 
President...does not want rhetoric, but results, in relations with 
Europe and, in this respect, there are problems....  The Europeans 
feel disrespected by the Americans, while the Americans feel left in 
the lurch by Europeans.  Even under the Obama government, this is 
the prevailing bad mood.  The Madrid summit would have been an 
opportunity to tackle a few problems.  That is what summit meetings 
are there for - if they are not being cancelled." 
 
¶3.   (U.S.-China)   Arms Exports to Taiwan 
 
Weekly Die Zeit (2/4) carried an editorial under the headline: 
"Yellow Card" with the sub-title: "Obama Modernizes [Taiwan's] Arms 
System?"  The paper wonders: "Is it really necessary for the U.S. to 
interfere? The answer is 'yes,' because America has a special 
responsibility for Taiwan.  And as long as Taiwan is being 
threatened by Chinese missiles, the U.S. must also show this 
responsibility by shipping arms.  These arms shipments, but 
primarily the U.S. strategic ambiguity, are an insurance policy that 
mean Taiwan will survive.  They have forced China to pursue a course 
of rapprochement, a path upon which China would otherwise probably 
not have embarked.  Now both powers are baring their teeth at each 
other without the one being able to force the other to give in.  And 
that is why it is probably no coincidence that Barack Obama is now 
carrying out an arms deal that originated with his predecessor. 
 
Obama's experience with the Chinese seems to be completely the 
opposite of ex-President Bush's.  At the beginning of his term, Bush 
had a lot of trouble with the Chinese leadership but later he 
curried favor with it for the 'fight against terror.'  Obama, in 
turn, traveled with a lot of good will to Beijing in order to learn 
afterwards that relations deteriorated month by month.  If he were 
Chinese, he would probably say he has lost face.  Now Obama is 
showing the Chinese their limits.  He welcomed Beijing's rise, but 
he does not want to put up with everything." 
 
¶4.   (Iran)   Nuclear Program, Missile Test 
 
Under the headline "Sensitive to pressure," Frankfurter Allgemeine 
(2/4) editorialized: "Suddenly, Iranian President Ahmadinejad has no 
problem with enriching uranium abroad.  When exactly the same thing 
was proposed to the Iranian regime last year, he brusquely rejected 
it.  How do you explain this change of mind-if it is one?  The 
international debate about new economic sanctions against Iran is 
obviously having an impact on Tehran.  The Obama government is 
urging Congress and losing patience.  The German government seems to 
be willing to agree to sanctions even if 'only' like-minded nations 
approved of them....  The West is right to be skeptical about 
Ahmadinejad's 'no problem' statement.  Far too often, he has made 
fools of them.  There is no reason to sound the all clear signal in 
the nuclear dispute.  This will only be heard when actions follow 
the words of the Iranian leadership." 
 
Sddeutsche (2/4) headlined "unexpected offer" and opined "If Iran 
indeed gives in on the nuclear dispute, it would be an unexpected 
confirmation of the P5 and Germany's negotiating strategy.  The 
carrot and stick approach would have been effective - shortly before 
the discussion of UN sanctions begins.  However, there have been 
many announcements by Iran in the past.  President Ahmadinejad's 
statement is only worth something if he writes it down and sends it 
to the IAEA, which had made the proposal for the deal.  Iran can now 
prove its credibility and alleviate the conflict by pursuing 
confidence-building measures.   As long as the uranium has not 
reached Russia, there is no reason to slow down the efforts to 
impose tougher sanctions.  Ahmadinejad welcomed the deal before but 
could not get it through the complicated power structures of the 
regime.   The restraint response in Washington, Paris and Berlin is 
therefore appropriate and right.  The danger that Iran is only 
pursuing a tactical maneuver is too great.  Iran knows that Russia 
and China are skeptical about new sanctions.  If the negotiating 
group were now to fall apart, it would be an unexpected triumph for 
Tehran." 
 
An editorial in Berliner Zeitung (2/4) remarked: "The U.S. and Iran 
look like two warriors of enemy tribes, facing each other in a 
ritual dance.  They go around each other making threats, retreat and 
then attack again.  Iran is currently making the impression as if it 
is giving in, being impressed by the military movements in the 
[Persian] Gulf and the potential comprehensive sanctions....  By 
yielding, Iran wants to delay comprehensive sanctions and stop 
Russia and China from agreeing to them.  Particularly stopping fuel 
experts to Iran would hit the Iranian economy....  The stop of 
deliveries would have serious social repercussions.  The proposal 
buys Iran time that the West does not have.  Iran will soon have the 
ability to build a nuclear bomb.  Israel does not want to accept 
this threat.  The situation could therefore soon get out of 
control." 
 
"Iranian Confusion," Handelsblatt (2/4) editorialized: "Is this the 
turning point in the nuclear game of poker?  It can be doubted.  For 
too often President Ahmadinejad made a fool of the West by making 
compromises first and retracting them soon after, while 
simultaneously pursuing the nuclear program." 
 
Regional Volksstimme of Magdeburg (2/4) commented: "The news is that 
things are moving in the nuclear dispute with Iran.  After the 
Iranian presidential elections in June, negotiations almost came to 
a complete standstill.  If President Ahmadinejad now announced Iran 
is prepared to enrich uranium abroad, it can have two causes. First, 
the pressure on the regime increases as domestic protests continue 
and international sanctions look more likely.  Secondly, the 
announcement could be a purely tactical maneuver.  Carrots and 
sticks has been a successful strategy for Tehran in the nuclear 
dispute.  The West was therefore right to be restrained in its 
response to the offer." 
 
¶5.   (Afghanistan)   Karzai, Future Strategy 
 
Frankfurter Allgemeine (2/4) editorialized on President Karzai's 
visit to Saudi Arabia:  "Karzai wants Riyadh to support the process 
of reconciliation with his radical enemies.  Without such a process, 
the stabilization of Afghanistan will remain a mirage.  In addition, 
Saudi money could help improve Afghanistan's infrastructure." 
 
 
Tagesspiegel (2/4) noted that the "exit program for moderate Taliban 
can hardly be implemented during a phase of increased military 
operations.  In addition, experts doubt whether it can be 
implemented without Pakistan's active support.  As a result, the 
West's new strategy on Afghanistan after the London conference looks 
like the strategy before the conference." 
 
Frankfurter Rundschau (2/4) analyzed NATO's financial problems and 
its effects on the mission in Afghanistan. "Actually, NATO is 
pursuing important goals in Afghanistan....  The mission is funded 
not just by the countries but also by NATO itself.  The problem is 
that the organization is pretty broke.  In the current financial 
year alone, the budget lacks several hundred million euros.  In the 
medium term, we are even speaking of billions....  A fight is going 
on behind closed doors about money.  The key question here is 
whether the money should be spent particularly in Afghanistan or 
within the NATO area.  While the military leaders, the Americans and 
the Britons want a new headquarters in Kabul and improved satellites 
communications, eastern and southern Europeans would like to see 
their infrastructure being brought up to date....  Given that all 
member states have high national deficits and some even face 
bankruptcy due to the financial crisis, there will be no decisions 
made during the NATO ministerial in Istanbul." 
 
¶6.   (EU-Greece)   Financial Crisis 
 
The Greek financial crisis is the main political story in the press 
this morning (2/4).   Tagesspiegel headlined: "EU Takes Over 
Financial Control in Greece," while Die Welt led with a story 
headlined: "EU Keeps Greece on a Short Lead - Greece Must Present 
Report on Savings Course on a Quarterly Basis - Opening Of 
Procedures Because of False Budget Figures."  Handelsblatt's lead 
story carried the headline: "EU Forces Athens Government to Initiate 
Reforms," and Sueddeutsche Zeitung headlined: "EU Puts Greece under 
Receivership." 
 
In an editorial Sueddeutsche Zeitung (2/4) had this to say: "The 
situation resembles the one of Lehman Bros.  Its insolvency led the 
world to a crisis that has not yet been overcome.  First it was 
Lehman and the banking crisis and now it is Greece and the state 
crisis.  History repeats itself.  It repeats itself with respect to 
the development of the crisis but not with respect to overcoming it. 
 It is still up to the EU governments to react in a better way than 
President Bush and his backers who though it would be possible to 
isolate and punish Lehman Bros.  It would be a hazardous game to 
attempt to do the same at the state level.  If Greece fails, then 
Portugal, Ireland, and Spain could fail, too.  That is why [the EU] 
 
must help with all the necessary brutality.  The European Commission 
took the first step by putting it under supervision; it practically 
took away Greece's sovereignty.  This is the worst imaginable 
punishment for a nation but it is only logical in a community.  Only 
a crisis shows what a system is able to accomplish.  The euro system 
has many possibilities, even if it hurts." 
 
In an editorial, Handelsblatt (2/4) judged: "The real signal of the 
control program [for Greece] is: we look after you.  And thus, it is 
difficult to imagine that the EU would leave Greece in the lurch if 
consolidation were to go wrong. The arsenal of possible assistance 
is great: It ranges from direct or premature payments from 
individual EU pots via loans to the commonly guaranteed bonds.  In 
case of doubt the EU will select the thing that is the least 
noticeable, because EU citizens are not in the mood to show 
financial solidarity.  Nevertheless, the EU, even though no one 
admits it, will increasingly turn into an enlarged mirror image of 
what we know from Germany:  In the end, all public budgets vouch for 
each other." 
 
Frankfurter Allgemeine (2/4) judged in a front-page editorial: "The 
only thing that will currently help Greece is the consistent 
application of existing rules.  The repeated calls for help from the 
outside - be it the IMF or bilateral assistance from other EU 
states-- can only prompt the government in Athens to make excuses. 
The argument of EU Commissioner Almunia is to say that, if the 
savings measures that have now been announced take effect in a few 
months, speculation about [Greece's] state bankruptcy would be over 
and done with, too.  But this argument is also true in the opposite 
direction:  If an effect is not visible by then, Greece would not 
only face an abyss, then it would be with its foot in it." 
 
In the opinion of Financial Times Deutschland (2/4), "it is good 
that the EU is now applying the new instruments from the Lisbon 
Treaty to Greece, but, as good as control is, the second part of the 
solution is still lacking: credible possibilities of imposing 
sanctions.  Without the threat of punishment, even the best control 
will not lead the Greek sinner back to the path of budgetary virtue. 
 The case of Greece is now turning into a test case for future 
Monetary Commissioner Olli Rehn.  He must prove that Brussels has 
the euro countries under control even without effective 
possibilities for sanctions.  That is why one of his first actions 
in office should be to prompt Portugal, Ireland, and Spain to show 
greater budgetary discipline because a chain reaction is exactly the 
thing the euro zone must avoid at any cost if it wants to safeguard 
the stability of the euro." 
 
Under the headline: "Enough is Enough, Athens!", weekly Die Zeit 
(2/4) judged: "First the banks, now the Greeks?  For whom should the 
German taxpayer continue to pay?  For years, Greece has violated the 
rules of economic reason, and now it is faced with bankruptcy.  And 
the same game that was played in connection with the banks is now 
looming with Greece.  Because its bankruptcy would jeopardize the 
international financial system, it may be possible that the taxpayer 
must help out again.  With their money they should help those 
overcome their problems who have now proved that they do not know 
how to deal with money.  We could tear our hair out but this 
situation could happen.  But even more important is the question of 
how a similar situation can be prevented in the future.  It seems to 
be necessary to create a new body that supervises the budget 
policies of the EU members.  Experts suggested a European Monetary 
Fund, but whatever the shape of this institution, without greater 
controls the Monetary Union will not survive." 
 
Regional daily General-Anzeiger of Bonn (2/4) argued: "The entire 
community must wonder what it will do in the future with a situation 
that was unthinkable a while ago: What will we do if a country is 
sliding into bankruptcy?  Since this crisis, nothing can be ruled 
 
out any longer." 
 
¶7.   (U.S.)   Space Travel 
 
Under the headline: "Nothing is Impossible," Die Welt (2/4) opined: 
"It was left to President Obama to tell the enthusiastic U.S. space 
travel nation the bitter truth: No we can/'t.  There is simply not 
enough money in the coffers for a trip to Mars or even to the Moon. 
The formerly glorious NASA will now quickly lose its significance. 
The wave of privatizations is now also reaching space travel. 
Manned and unmanned space travel will now primarily serve corporate 
goals.  More than ever, one motto will now be valid for space 
travel: competition stimulates business.  In the coming years, the 
cards will be reshuffled and then we will know which country is 
heading for which destination in outer space.  In individual cases 
there could also be private public partnerships.  The curiosity of 
man is so great that we will certainly see people on the moon in 
this decade - even without state programs." 
 
¶8.   (Economic)   Davos Economic Forum 
 
"Capitalism 2.0" is the headline in Die Zeit (2/4), which 
editorialized: "What is the message from Davos?  In view of the many 
uncertainties, the answer has rarely been as difficult and as 
interesting at the same time as today.  On the large rostrums one 
thing became clear:  [The economic and financial] crisis will last 
for more years to come and the question is who has to pay for it? 
Pepsi Cola CEO Indra Nooyi, Google's Eric Schmidt and Co. are 
anything but do-gooders but they have the strong feeling that 
financial capitalism, including its thinking about capital markets, 
should no longer dominate the markets because, first, their economic 
approach is highly unstable; second, because one's own staff should 
not only serve to achieve a quarterly profit; and third, because 
society would no longer accept this economic approach.  Advisors and 
experts confirmed this message in Davos.  When experts talked about 
the necessary change of capitalism, they talked about long-term 
expectations, greater stability, greater respect for the staff, 
customers, and the environment - and of no less.  And the earlier 
the economy moves in this direction, the less regulatory power will 
have to be used by the state." 
 
MURPHY