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### Viewing cable 07REYKJAVIK171, ICELAND SCENESETTER FOR UNDER SECRETARY NICHOLAS BURNS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07REYKJAVIK171 | 2007-06-13 09:09 | 2011-01-13 05:05 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Reykjavik

`

    VZCZCXYZ0005
    OO RUEHWEB

    DE RUEHRK #0171/01 1640929
    ZNR UUUUU ZZH
    O 130929Z JUN 07
    FM AMEMBASSY REYKJAVIK
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 3329
    RUEHFR/AMEMBASSY PARIS IMMEDIATE 0037
    INFO RUEHTH/AMEMBASSY ATHENS 0008
    RUEHLO/AMEMBASSY LONDON 0137

` `

    UNCLAS REYKJAVIK 000171

    SIPDIS

    SIPDIS

    SENSITIVE

    PARIS PLEASE PASS TO P DELEGATION

    FROM AMBASSADOR VAN VOORST

    E.O. 12958: N/A
    TAGS: PREL PGOV ECON KPAO IC
    SUBJECT: ICELAND SCENESETTER FOR UNDER SECRETARY NICHOLAS BURNS

    REFS: A) STATE 79494 B) REYKJAVIK 169

    ¶1.  (SBU) The Mission and I welcome you most warmly to Iceland.
    Your timing could not be better.  The May 12 parliamentary elections
    strengthened Prime Minister Haarde's mandate to govern.  A new
    Foreign Minister (and unabashedly would-be future PM) is wary of us
    but open to an exchange of views.  Bold initiatives on the use of
    the Keflavik facilities have eased public resentment over the
    closure of the base, and a series of defense activities in Iceland
    are providing visible reassurance to the public that the U.S.
    remains committed to Iceland's defense.  Your visit builds on the
    Washington bilaterals at State and Defense last October in meeting
    our Joint Understanding commitment to hold periodic high-level
    strategic discussions with the Icelanders. You will find your hosts
    more self-assured and more relaxed with us than they were last
    summer - and with a clearer concept of Iceland's role in NATO's
    North Atlantic neighborhood.  I hope that you will leave them with a
    stronger sense of the role this rich and dynamic country can play in
    global affairs writ large.

    ¶2.  (SBU) You arrive a month after elections resulted in a strong
    new coalition government of PM Haarde's Independence Party and the
    Social Democratic Alliance (SDA). While the government is still in
    its shake-down period, the SDA's assumption of six of the twelve
    cabinet ministries is proceeding relatively smoothly.  The Prime
    Minister -- by a huge margin the most popular politician in Iceland
    -- remains a calm, pragmatic partner and a personable, witty
    interlocutor.  Although he has returned formal oversight of
    defense-related issues to the Foreign Ministry, Haarde will continue
    to exert a strong influence on Iceland's foreign policy.  SDA chair
    Ingibjorg Solrun Gisladottir is adjusting to the change from
    opposition leader to Foreign Minister.  Although known for voicing
    quick and firm opinions on domestic and foreign policy issues, she
    was uncharacteristically quiet and careful with her words in my
    courtesy call earlier this week.  Other ambassadors confirm she has
    been listening more than speaking in their initial calls.
    Gisladottir has made waves, however, by insisting that the coalition
    government agreement contain language "regretting" the war in Iraq.
    She has also noted her general disapproval of the current U.S.
    administration and has announced her interest in establishing
    "normal" relations with the Palestinian Unity Government.  The
    PM-hosted working lunch on Thursday will be our first chance to
    observe the interplay between Haarde and Gisladottir in a
    non-campaign setting.

    ¶3.  (SBU) Your visit coincides with the arrival of a 3-ship NATO
    maritime standing group that includes a U.S. destroyer.  This is a
    follow-on to the highly successful visit of the USS WASP last
    October.  These visits, plus our participation in a NATO air defense
    exercise scheduled for mid-August, are visible demonstrations of the
    U.S.  commitment to the 1951 Defense Agreement and constitute an
    important pillar in our post-Keflavik bilateral relationship.  We
    continue the work of wrapping up the remaining legacy issues.  You
    can expect the Prime Minister to raise NATO Air Policing; work in
    the NATO Military Committee on the issue has proved difficult.
    Another base-closing legacy issue is the Iceland Air Defense System
    (IADS), which the USG will stop funding on August 15.  OSD
    Representative Jim Hursch is in town June 13 for another round of
    technical talks and will be available to join your discussions.  On
    both points, the Icelandic government feels public pressure to
    demonstrate that Iceland's security has not been compromised by the
    U.S. departure.

    ¶4.  (SBU) In most areas, though, the message of moving on from Cold
    War-era constructs has taken root.  The government has just signed
    MOUs on enhanced defense cooperation with Norway and Denmark, is
    buying SAR equipment from Canada, and is endeavoring to build more
    formal security ties with the U.K. and Germany.  The Icelanders are
    taking advantage of the first-rate facilities we left at Keflavik to
    create a university-level international educational institution as
    well as a technology park.  While making it clear that the U.S.
    "unilateral" departure still grates on Icelandic sensitivities,
    Icelandic politicians and citizens are increasingly enthusiastic
    about the economic potential of the former base.  Meanwhile, the
    Embassy's initiatives to broaden our ties to Iceland in such areas
    as trade and direct foreign investment, energy development, and
    scientific research are well-received by a public skeptical of USG
    policy but deeply fascinated by the U.S.

    ¶5.  (SBU) On the economic front, you'll see ample evidence of a
    continuing economic boom in Reykjavik, thanks to utilization of fish
    and energy resources and leveraging of assets to invest abroad.  The
    Viking spirit of risk taking, acquisition, and swift decisiveness
    have all helped to multiply Icelandic holdings in Europe.  The U.S.
    market is likely the next target, and the business community has
    pressured the GOI for a free trade agreement with us. The Icelanders
    know the prospects are slim for the foreseeable future, but you are
    likely to hear of their abiding interest.

    ¶6.  (SBU) Besides your meetings with the Prime Minister and the MFA,
    you will see the new Althingi speaker.  Both Haarde and Gisladottir
    promised during the campaign that parliament would be given a bigger
    role in the foreign policy decision-making process, and this meeting
    is at the specific request of the MFA.  It would be good to urge the
    speaker to send the homebound foreign relations committee on more
    foreign trips. Finally, the official part of your visit will be
    capped off by a short interview with the foremost political TV show
    plus a roundtable discussion with participants from the media,
    politics, and academia. We expect a lively exchange of ideas in
    which you will be asked to talk about bilateral issues as well as
    the War on Terrorism, the situation in Iraq, and our relationship
    with Iran.

    ¶7.  (U) Have a good flight, and we'll see you tonight.

    van Voorst

`