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### Viewing cable 08REYKJAVIK91, Scenesetter for the Secretary's visit to Iceland May 30, 2008

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08REYKJAVIK91 | 2008-05-19 14:02 | 2011-01-13 05:05 | CONFIDENTIAL | Embassy Reykjavik

`

    VZCZCXRO7655
    OO RUEHBW
    DE RUEHRK #0091/01 1401434
    ZNY CCCCC ZZH
    O 191434Z MAY 08
    FM AMEMBASSY REYKJAVIK
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 3655
    INFO RUEKJCS/SECDEF WASHDC
    RUEAIIA/CIA WASHDC
    RUEKDIA/DIA WASHDC
    RHMFISS/HQ USEUCOM VAIHINGEN GE 0072
    RHMFISS/HQ USAFE RAMSTEIN AB GE
    RUEHZG/NATO EU COLLECTIVE

` `

    C O N F I D E N T I A L SECTION 01 OF 02 REYKJAVIK 000091

    SIPDIS

    DEPT FOR S/ES-S
    ALSO FOR E, EUR/FO, EUR/NB
    OSD FOR WINTERNITZ

    FROM AMBASSADOR VAN VOORST

    E.O. 12958: DECL: 05/18/2017
    TAGS: PREL MARR PINR NATO KWMN ECON UNSC IC
    SUBJECT: Scenesetter for the Secretary's visit to Iceland May 30, 2008

    Classified By: Amb. Carol van Voorst for reasons 1.4 (b) and (d).

    ¶1.  (U) The Icelanders are delighted to welcome you to the High
    North.  Your visit to Reykjavik is the first by a Secretary of State
    since Secretary Powell attended the NATO Summit here in 2002, and the
    first bilateral visit since Secretary Albright overnighted in 2000.
    Under Secretary for Political Affairs Burns was the last senior State
    official to visit in June of last year.

    ¶2.  (SBU) In development and general prosperity, the Iceland you will
    see bears little resemblance to that of the Cold War years, when the
    country was struggling to emerge from a hardscrabble existence as one
    of the poorest countries in Europe.  Leveraged investments of fishing
    profits and cheap, clean electricity translated into a booming
    economy for most of the last fifteen years.  Though the economy has
    faltered in recent months as credit has dried up globally, life is
    now very comfortable for the vast majority of Icelanders.

    ¶3.  (C) The governing coalition of the Prime Minister's Independence
    Party and the Foreign Minister's Social Democratic Alliance (SDA) is
    strong and enjoys considerable public support, though a few fractures
    are emerging as economic worries strain the partnership.  So far, the
    SDA has taken the biggest hit in public confidence, as they have
    struggled to make the shift from opposition to government and have
    lost a number of coalition policy battles.  Disagreement over EU
    membership may eventually drive the two parties apart, but most
    likely not before the next scheduled elections in 2011.

    FM Gisladottir: Atmospherics, topics
    ------------------------------------

    ¶4.  (C) Foreign Minister Gisladottir's meeting with you in April was
    the last stop of an extremely heavy spring travel schedule.  Both she
    and PM Haarde have been criticized for spending too much time abroad
    during a period of economic turmoil at home.  She has focused more on
    her role as SDA leader in the last few weeks, though she did find
    time to visit the UK for consultations on development aid, to, lobby
    for Iceland's UN Security Council bid, and to sign an MOU on defense
    cooperation.

    ¶5.  (C) Gisladottir is very appreciative of your visit and views it
    as confirmation of her role as the proponent of a more
    international-minded Iceland.  Although her welcome will be warm and
    sincere, Gisladottir is also under pressure from within and outside
    of her party to show that she can hold her own at the table with the
    U.S.  She may feel she has to raise sensitive topics such as the
    Guantanamo Bay detention facilities and renditions of terrorist
    suspects, if only to be able to report she made the point.

    ¶6.  (SBU) Women's Empowerment:  Gisladottir will be keen to follow up
    on your previous discussion of Iceland's proposal for a Women Leaders
    Working Group.

    ¶7.  (C) Middle East/Afghanistan:  Gisladottir will be interested in a
    readout of the ICI Conference in Stockholm and developments in Iraq,
    as well as your sense of progress in the Israeli-Palestinian peace
    process.  She has a genuine desire to hear your thoughts on what role
    small states such as Iceland can play in the peace process, and may
    point to Palestinian Authority President Abbas' comments here last
    month that perhaps Iceland could host a second "Reykjavik Summit,"
    this time centered on peace in the Middle East.

    ¶8.  (SBU) Defense and Security: The FM's focus here will be on
    continuing her earlier conversation with you regarding NATO's
    involvement in the High North and broader security issues in the
    region, possibly foreshadowing the lunch conversation on Russia and
    the North Atlantic neighborhood.  Gisladottir may also want to brief
    on Iceland's latest efforts in building robust defense and security
    ties with neighboring NATO allies, including recent progress with the
    UK.  She is also likely to cover the bilateral security relationship,
    and may raise the handover of the previously U.S.-run Iceland Air
    Defense System (IADS) radar stations, on which DOD has the lead.  We
    are hoping to complete that transfer soon but may not be able to get
    the price as low as Iceland wishes due to legal and regulatory
    hurdles.

    ¶9.  (C) UN Security Council Bid:  We doubt that Gisladottir will
    spend much time soliciting our vote for one of the two WEOG seats on
    the Security Council this fall (NOTE: Iceland is running against
    Austria and Turkey).  Rather, she will go forward from the premise
    that Iceland will be successful and will be looking for input on how

    REYKJAVIK 00000091  002 OF 002

    Iceland might shape its term on the UNSC.  Should Iceland win
    election, it will hold the UNSC Presidency in February 2009, and
    Gisladottir is exploring possible themes for Iceland's presidency,
    while also trying to prepare for the potential staffing headache for
    her small (250-person) foreign service.

    Prime Minister Geir Haarde
    --------------------------

    ¶10.  (C) Warm, witty, and pragmatic, Prime Minister Haarde is at ease
    in domestic and international settings.  Since you met him in
    Washington in October 2006 to sign the bilateral Joint Understanding,
    Haarde has only become more comfortable in the role of Head of
    Government.  Haarde spent much of the first half of this year on
    trips abroad, serving as the country's head cheerleader for
    international audiences and protesting what he sees as the financial
    media's tendency to gang up on Iceland.  Beyond economic pep talks,
    he also found time for bilateral visits with his Canadian and British
    counterparts in March and April, and in both places revitalized talks
    on defense and security cooperation that had become mired in the
    bureaucracy.  He was most recently in the U.S. in April for
    anniversary celebrations of the international students program at
    Brandeis, his undergraduate alma mater.

    ¶11.  (C) You will find Haarde assured and affable, though possibly
    defensive on the issue of media carping and the influence of foreign
    speculators on the strength of the Icelandic currency.  You may see a
    slight awkwardness in the interplay between Haarde and FM Gisladottir
    should the topic of EU membership come up; Gisladottir makes no
    secret of her view that Iceland should join, while Haarde and his
    party are opposed.  On virtually all other points, however, the two
    leaders have put themselves firmly in sync, and in their year as
    coalition partners have skillfully presented a unified front on most
    international issues while ignoring the squabbling of their parties'
    respective fringe elements.  Haarde has given Gisladottir a free hand
    to reorganize the Defense Department, housed within the MFA, and
    supported her as she pushed through Iceland's first defense budget.
    While Haarde will defer to Gisladottir as your formal host, he is
    certain to make his own points to underline the central importance of
    the U.S. and NATO to Iceland's security.

    PM/FM Working Lunch Topics: Russia, Global Economy
    --------------------------------------------- -----

    ¶12.  (C) Over lunch with PM Haarde and FM Gisladottir, we anticipate
    a wider scope to the discussion, focusing on issues of global
    concern.  In particular, Iceland is keeping a close eye on
    developments in Russia, and the chattering classes here swing from
    criticism of U.S. "provocations" of the Russians to deep concerns
    over the increasingly assertive Russian foreign policy.  This topic
    would provide an ideal opportunity to follow up on the NATO Bucharest
    Summit and the issue of MAP for Georgia and Ukraine -- Iceland
    supported MAP for both, but did not want to appear too far out in
    front.  Further afield, both Haarde and Gisladottir would be
    interested in your views on developments in East Asia -- particularly
    China -- and in Africa, two areas where Iceland is constructing new
    business or development ties.

    ¶13.  (U) Haarde and Gisladottir may also want to briefly cover
    economic issues, both to talk up the Icelandic economy and to explore
    developments in the U.S. and global economy that have a bearing on
    Iceland's highly leveraged financial sector.  Haarde, who as Finance
    Minister oversaw much of Iceland's startling economic transition, is
    particularly interested in reassuring the U.S. concerning Iceland's
    creditworthiness.

    ¶14.  (C) Whaling will be in the news again shortly before your
    arrival, as the government issued a new quota for commercial hunting
    of minke whales on May 19.  While Gisladottir and her fellow SDA
    ministers believe whaling harms Iceland's image abroad and serves no
    real domestic interest, Haarde's party controls the issue and the PM
    is a firm defender of what he sees as Iceland's sovereign right to
    manage its own marine resources.

    van Voorst

`