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FOR THE SECRETARY FROM AMBASSADOR THOMAS STEPHENSON

E.O. 12958: DECL: 08/22/2018
TAGS: OTRA PREL PO
SUBJECT: SCENESETTER FOR YOUR VISIT TO PORTUGAL, SEPTEMBER
5-6

Classified By: Amb. Thomas F. Stephenson, reasons 1.4 (b) and (d)

¶1. (SBU) Madam Secretary:

Your visit is scheduled to coincide with two important
Portuguese foreign policy moments ) recognition of Kosovo
and Portugal leading discussion on the EU's trans-Atlantic
policy. This is an opportune moment to stress that the US
and EU generally share goals and to call for an even closer
working relationship going forward.

Portugal - Steadfast Ally
-------------------------

¶2. (SBU) Portugal, a founding member of NATO, is a steadfast
ally who has consistently stood by our side over the years
despite various changes in government. The President and
Prime Minister -- from opposing political parties -- each
regularly stress that trans-Atlantic relations are a pillar
of Portuguese foreign policy and that NATO is the primary
guarantor of European security. Portugal is also a member of
the Proliferation Security Initiative, the Container Security
Initiative, and the Global Initiative to Combat Nuclear
Terrorism.

¶3. (SBU) The Portuguese military is engaged internationally
on numerous fronts. Portugal supports NATO efforts in Iraq
(6 soldiers), Kosovo (295), and Afghanistan (15 in place and
42 new this week), as well as UN missions in Lebanon (146),
Kosovo (2), and East Timor (164). Portugal participates in
EUFOR missions in Bosnia (14), and the DR Congo (2) and sends
85 people to support bilateral cooperation in five Lusophone
African nations.

¶4. (SBU) The Portuguese government provides liberal access to
Portuguese air and seaports for U.S. military operations in
support of Iraq and Afghanistan. Over the past year, more
than 2,100 U.S. military aircraft have overflown Portuguese
controlled airspace and 1,560 have transited through Lajes
Air Base, the joint USAF-Portuguese base in the Azores.

Suggested Areas of Focus
------------------------

¶5. (C) Kosovo: The Portuguese supported the Ahtisaari Plan
and encouraged EU member states to prepare for the move, but
then unexpectedly postponed their own recognition of Kosovo.
FM Luis Amado recently confided that the main reason behind
the delay was Portugal's interest in maintaining a good
relationship with Serbia, which became stronger during
Portugal's EU presidency. Amado has indicated that Portugal
is ready to recognize Kosovo during September before UNGA.

¶6. (C) Georgia/Russia: As always with Russia, the GOP is
reluctant to be critical in public and prefers to work within
the EU or NATO. There was some speculation in the media that
President Cavaco Silva was unhappy with the MFA's tepid
stance on the Russia-Georgia conflict, but he is not saying
so for the record. Portugal is likely to quietly follow, not
lead, EU consensus. In its capacity as Chair of the
Community of Democracies, Portugal has drafted a statement
calling for both parties to abide by the cease-fire, along
the lines of the EU statement released on August 13.

¶7. (C/NF) AFRICOM: Portugal is interested in hosting an
AFRICOM headquarters and has asked to be included in the
DoD's candidate nation list, based on its historic ties to
Africa, its low cost relative to other European nations, and
its proximity. It is also the only candidate nation with a
foreign-owned base up for consideration, causing concerns
that a public leak could lead to misunderstandings, both in
the U.S. and in Europe. The USG will send a representative
in early September to Portugal to assess discreetly its
viability to host AFRICOM or one of its components.

¶8. (C) US-EU Trans-Atlantic Relationship: FM Amado will lead
the Gymnich discussion on September 5 and 6 on how to improve
US-EU ties during the next U.S. administration, as well as
enhance the US-EU dialogue on third country initiatives.

¶9. (C) Afghanistan: In August, Portugal rotated 163 Special
Forces out of Afghanistan, leaving a 15-person OMLT and a
42-person C-130 detachment in theatre. The Portuguese have
promised to deploy a second 30-person OMLT later this year.
Days after the withdrawal, Amado privately stressed to the
Ambassador his personal opposition to the move and claimed
that President Cavaco Silva had been the main proponent for
drawing down the troops. He added that he was in favor of

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rotating Special Forces back into theatre soon, which Cavaco
Silva has left open as a future possibility.

¶10. (C/NF) Enhanced Bilateral Relationships on Energy: Over
the last several months, the GOP has made an effort to
strengthen its bilateral commercial relationship with
energy-producing nations Venezuela and Libya. At the same
time, Portugal's major energy company, Galp, has made
commercial overtures to secure energy contracts in Iran. In
response to the latter, we successfully pressed the MFA and
Galp executives to back away from dealings with Iran and
reiterated the need for a unified international front on
sanctions. Nevertheless, the GOP is moving forward with
energy partnerships elsewhere, and signed 39 new development
and food-for-oil agreements with Venezuela, as well as an
infrastructure for energy MOU with Libya. Portugal's
relationship with Venezuela has historically centered around
the roughly 500,000 Portuguese nationals resident in
Venezuela; this energy agenda is new. Portugal does not have
an established relationship with Libya and is attempting to
catch up with other international investors.

¶11. (SBU) Lajes Wage Increase: The bilateral Cooperation and
Defense Agreement with Portugal requires that the U.S. Air
Force conduct an annual civilian wage survey to set the
salary increase rates for the Portuguese employees. Over the
past three years, the Portuguese have disputed the wage
increase offered, stating that the wage survey called for
more. Rep. Barney Frank proposed legislation that would
remove the requirement for the wage survey by substituting
language in the bilateral agreement, thereby resolving the
issue in future years. In exchange for the new language, the
Portuguese employees would be given a one-time settlement to
cover the difference between the wage survey rate and the
actual increase distributed in 2006 and 2007. The bill is in
the Defense Appropriations Committee, and we do not expect
further action until the fall. This would appear to be a
minor issue, yet if often comes up in discussions at the
highest levels.

Foreign Minister Amado
----------------------

¶12. (C) You last met with Amado at the August 19 special
session at NATO. He has been a great friend of the US, both
in his previous capacity as Minister of Defense and now as
Foreign Minister. He is even-tempered, thoughtful, and
low-key, and regularly seeks opportunities to coordinate
policy with the US. He places great importance on presenting
a united public front, whether within the EU, NATO or with
the US. If there are differences, he prefers to discuss them
discreetly.

Prime Minister Socrates
-----------------------

¶13. (C) Socrates is a telegenic and charismatic leader, who
worked hard to improve his English in advance of the EU
presidency. He relies on advice from a small circle of
advisors. He is a very moderate Socialist who has been
successful at co-opting or marginalizing the leftists in his
party. He also aggressively pursued his domestic agenda
before assuming the EU presidency, achieving difficult labor
and social security reforms and reducing Portugal's budget
deficit to near EU-mandated levels. Socrates visited
President Bush last September to discuss EU presidency and
bilateral issues. He has recently been under pressure in the
national press for strengthening ties to Angola, Libya, and
Venezuela in order to bolster Portugal's energy sources and
export markets.

President Cavaco Silva
----------------------

¶14. (C) Cavaco Silva is the most popular politician in
Portugal, even though his center-right party badly trails
Socrates' Socialist Party in polls. Although the Portuguese
presidency does not wield the executive power of the US
presidency, the position is not ceremonial. Cavaco Silva is
commander in chief of the armed forces and must approve
military deployments and he chairs the Council of State,
which handles all constitutional issues. Cavaco Silva
considers former President George H.W. Bush a personal
friend. Cavaco Silva was displeased that he did not get an
Oval Office meeting with President George W. Bush during his
2007 visit to Washington to open a Smithsonian exhibition of
Portuguese art, and he declined the former President Bush's
offer to visit Kennebunkport. Portuguese Embassy officials

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and some of our interlocutors here have suggested that
Portugal's delay in recognizing Kosovo and decision to remove
troops from Afghanistan was tied to Cavaco Silva's pique over
the perceived slight.
STEPHENSON