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DE RUEHRL #1403/01 3091603
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P 051603Z NOV 09
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 5694
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
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C O N F I D E N T I A L SECTION 01 OF 03 BERLIN 001403

SIPDIS

DEPARTMENT FOR THE SECRETARY FROM THE AMBASSADOR

E.O. 12958: DECL: 11/05/2019
TAGS: PGOV PREF MNUC AF RS IR KPAL KWBG GM
SUBJECT: SCENESETTER FOR SECRETARY CLINTON'S VISIT TO
BERLIN, NOVEMBER 8-10 

Classified By: Ambassador Phillip Murphy for reasons 1.4 (b,d).

¶1. (C) Summary: Embassy Berlin warmly welcomes you to
Germany for the historic 20th Anniversary of the Fall of the
Berlin Wall. Berlin is hosting all four-powers and EU
leaders at Berlin's Brandenburg Gate to mark this occasion.
Your visit includes meetings with Chancellor Merkel and
Foreign Minister Westerwelle. Chancellor Merkel will likely
raise concern about General Motors' November 3 decision to
keep its German subsidiary, Opel, and Westerwelle may likely
raise his interest in removal of nuclear weapons from
Germany. You may wish to encourage from them:

-- Assurances that the proposed Afghanistan conference will
not slip past January and that Germany will go immediately to
the Bundestag if increases in contributions are warranted;
-- Support for including banking and insurance relations with
Iran in calculations for possible new sanctions, and no
backsliding on export controls;
-- Assurances that Germany and the EU will work with the U.S.
at Copenhagen and not seek to isolate;
-- Agreement to tone down the public rhetoric on Opel;
-- German prodding of Russia to engage constructively on
security issues and human rights.

Recognizing Germany's prominent and international role on
this occasion is important to Merkel. She is still trying to
get a sense of working with the new Washington Administration
and seems uncertain at times. Of course, Westerwelle is
learning the ropes and being watched by Merkel to see if he
can be an effective FM for her. Alternatively, Merkel may
look to new Defense Minister zu Guttenberg (CSU) to play an
alternative role on foreign policy. End summary.

Political Climate
-----------------

¶2. (C) The political divisions that marked the recent
election campaign, culminating in the October 28 swearing-in
of a center-right coalition led by Chancellor Merkel, will be
swept aside for your celebratory visit. Merkel just returned
from what she considers an exceptional visit to Washington,
which front-paged her address to Congress in every
publication. Merkel will be focused on setting her
priorities for the next legislative term -- she gives a major
state of the union-like address on November 10 on all issues
-- and will seek U.S. cooperation in promoting economic
recovery and growth (Opel, regulation), progress in
addressing climate change (Copenhagen), and strengthening
Germany's international profile (Afghanistan). Westerwelle
will have spent a total of some two days work in the foreign
ministry by the time your arrive. His ministry is not sure
what he wants yet.

Economic Climate
----------------

¶3. (C) Germany's export-driven economy is showing initial
signs of recovery from its deepest recession since WW II.
For the full year 2009, GDP will shrink around 5%, but should
show modest growth of 1% next year. Unemployment has
remained relatively low thanks to government-subsidized
programs, but is expected to rise next year. Given the
government's record budget deficit, there is heated debate
over the wisdom of the new coalition's proposed tax cuts,
intended to boost growth. Germany was pleased with the
outcome of the G-20 Summit in Pittsburgh, but is keener on
the G-20's regulatory agenda than addressing global
imbalances.

¶4. (C) GM's sudden decision on November 3 to cancel the sale
of its European subsidiary Opel in a deal underwritten by the
German government shocked and angered Germans. Merkel's
chief economic advisor told the Ambassador November 4 that
Merkel was so furious at GM's about-face that she refused to
take a call from GM CEO Fritz Henderson. Merkel subsequently
called the President. Federal and state governments are
demanding that GM immediately pay back 1.2 billion Euros in
bridge loans they had extended to the car maker. What
particularly irked the Germans was that GM had failed to
forewarn them of their latest flip-flop after months of
laborious negotiations and a total of 4.5 billion Euros in
loans/guarantees in exchange for promises to retain most Opel
jobs and plants in Germany. (Merkel found out about the GM
decision just hours after delivering her address before
Congress.) The Opel story has dominated the news November
4-5. Opel workers are likely to strike in the next few days,
and politicians and others are citing the GM action as
another example of American "turbo-capitalism."

Berlin 00001403 002 of 003



Iran/Export Controls
-----------------------

¶5. (C) You should express appreciation for Merkel's strong
statement during her speech to Congress that there should be
"zero tolerance" for Iranian acquisition of weapons of mass
destruction. You should stress the importance of German
support for EU measures or measures taken by "like-minded"
countries should a UNSCR be unattainable due to a possible
Iranian rejection of the engagement track. With Westerwelle,
it remains imperative that you raise the importance of P5 1
unity again. In addition, you should stress the particular
importance of continued German leadership on export control,
particularly in light of recent interdictions of Iranian arms
shipments. The new German coalition seeks to expand exports
by normalizing German export control policy (of arms and
dual-use items) with the EU. Germany contends that its
intention is to raise the EU to the German standard, but the
danger is that German standards could be watered down to an
EU lowest common denominator.

Arms Control/Disarmament
------------------------

¶6. (C) Westerwelle is on a bit of a tangent by publicly
calling for removal of nuclear weapons from Germany, although
he insists that Berlin will not act unilaterally. This gets
him attention and he then offers assurances that everything
must be done in the NATO context, but it distracts from other
issues. This is one of the few foreign policy positions that
distinguishes his FDP from Chancellor Merkel's CDU, and
Westerwelle may feel pressed to mention this. The MFA
emphasizes that Westerwelle's position does not necessarily
mean that Germany intends to cease participation in the NATO
nuclear share. Germany may be willing to maintain its fleet
of dual-capable aircraft, but have the applicable nuclear
weapons stored in the U.S. or elsewhere. Westerwelle also
understands that some Allies may want to maintain their
current stock of NATO nuclear weapons. Your meeting with
Westerwelle is a good opportunity to emphasize any red lines
or concerns we have before this effort gets too far down the
road. For its part, the Chancellery, MFA and MOD are
uncomfortable with Westerwelle's push and sees no reason to
tackle this issue right now.

Afghanistan: Small Window for More Troops
-----------------------------------------

¶7. (C) FM Westerwelle has strongly defended German
engagement in Afghanistan, both military and civilian, as
vital to German national security interests. However, he
supports the Chancellor's recent decision to put off any
consideration of deploying additional German soldiers until
after the proposed international conference on Afghanistan
early next year, notwithstanding the significantly
deteriorated security situation in the north. The new
government sees the
conference as critical for setting a new framework and
benchmarks for the international engagement in Afghanistan,
as well as for prescribing what is expected of the Afghan
government in return. It is in our interest to capitalize on
the Germans' sense of "ownership" of the north in getting a
commitment from Westerwelle to seriously re-consider a troop
increase after the Afghanistan conference early next year,
if, in fact, he and Merkel rule out any increase before then.
Within this context, it would be important to acknowledge
that Germany is the fourth largest provider of civilian
development assistance in Afghanistan and is an enthusiastic
supporter of the U.S. Focused District Development (FDD)
civilian police training program, which it joined in January
of this year.

Middle East
-----------

¶8. (C) You should thank Merkel for her strong statements
before Congress where she stressed the overarching importance
of Israel's security and a two-state solution. In general,
Merkel has been very supportive of U.S. efforts in the Middle
East. She is now planning the second round of German-Israeli
government consultations, likely before the end of the year.
She may raise this with you and seek your advice on messages
to Netanyahu. We understand that Westerwelle may also be
planning to visit Israel. The MFA said that Westerwelle may
seek a greater German role to promote peace, for example to
offer German support in coordinating Middle East policy with
the EU. According to the MFA, Westerwelle may also raise the
concept of creating some type of OSCE-like security structure

BERLIN 00001403 003 of 003


for the Middle East.

Reluctance with Overseas Deployments
------------------------------------

¶9. (C) Germany continues to wrestle with the issue of
overseas deployments. Westerwelle, and the FDP in general,
tend to be more skeptical than Merkel's CDU on this topic and
this is reflected in the government coalition agreement. The
coalition agreement calls for a "gradual reduction" of German
participation in UNIFIL "with the perspective of bringing it
to an end." Similarly, the agreement calls for a "critical
review" of the "multitude" of parliamentary mandates for the
Bundeswehr to participate in counterterrorism and piracy
operations off the Horn of Africa, again with a view toward
reducing them. It would be helpful for you to emphasize how
important we view Germany's contributions to these
international operations.

Russia/Energy Security
----------------------

¶10. (C) We expect Germany to be less forgiving of Russian
bullying of its eastern European neighbors through cut-offs
of natural gas supplies, especially given the departure of
former Foreign Minister Steinmeier -- known for his
relatively pro-Russian views. Still, we expect Germany to
continue to place a heavy emphasis on maintaining good
relations with Russia, believing that constructive engagement
and assistance with modernization are the best way to deal
with this difficult "strategic partner." Germany is Europe's
largest energy user and is highly dependent on Russia for
energy supplies, but Berlin does not view this as a
vulnerability, believing that Moscow is equally dependent on
Germany as a consumer. Germany nevertheless recognizes that
it must diversify its sources of supply, routes, and means of
energy generation to gain greater energy security.

Climate Change
--------------

¶11. (C) As the Chancellor's remarks underline, German
officials want strong U.S. leadership going into the
Copenhagen Summit. They are advocating for a unified US/EU
position towards the major emerging economies, particularly
China and India, to urge them to commit to ambitious national
actions at Copenhagen. They are looking for signals of our
commitment to domestic and international actions that will
allow us to collectively meet science-based targets. German
leaders recognize the challenge of passing climate change
legislation in the U.S. and have lowered their expectations
for the possibility of reaching a legally binding agreement
next month at Copenhagen. They have begun to describe the
Summit as one step in a larger process -- a politically
binding framework -- and may be preparing the German public
for a less ambitious outcome.

Mission Germany
---------------

¶12. (SBU) Madam Secretary, the U.S. government presence in
Germany currently numbers 744 US direct-hire (USDH)
employees, 683 locally engaged (LE) staff, and 951 USG EFMs
and a State operating budget of $153 million annually. This
includes a Frankfurt cohort of over 500 USDH employees whose
responsibilities support USG operations globally. Berlin's
USG presence -- over 500 USDHs and LE staff -- is centered in
the new Chancery next to the Brandenburg Gate. The LE staff
includes many employees who have worked for the USG for over
30 years. Mission Germany is on the cutting edge of using IT
solutions xxxxx.
MURPHY