VZCZCXRO5915
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV
DE RUEHSM #0506/01 1241526
ZNY SSSSS ZZH
O 041526Z MAY 07
FM AMEMBASSY STOCKHOLM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2093
INFO RHEHNSC/NSC WASHDC IMMEDIATE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

S E C R E T SECTION 01 OF 03 STOCKHOLM 000506

SIPDIS

SIPDIS

STATE FOR EUR/NB
NSC FOR JUDY ANSLEY AND MATT PALMER

E.O. 12958: DECL: 05/01/2017
TAGS: PREL PGOV SW
SUBJECT: SWEDEN:  SCENE-SETTER FOR PRIME MINISTER
REINFELDT'S MAY 15 VISIT TO WASHINGTON

Classified By: Ambassador Wood, reason 1.4 (b) and (d).

Summary
-------
¶1.  (c) The May 15 visit of Prime Minister Fredrik Reinfeldt
provides an opportunity to strengthen ties in key areas with
a Swedish government that is relatively new to office and
better-disposed toward working with the U.S. than its
predecessor.  Reinfeldt comes from a new political generation
and is not bound by the same U.S.-critical traditions.  At
the Embassy, we have successfully emphasized cooperation with
Sweden on alternative energy.  Reinfeldt has put energy and
climate issues at the top of his domestic agenda, and told
the Ambassador May 4 that he hoped that his trip would help
change perceptions in Sweden about the U.S. on this subject.
Reinfeldt said he will raise with President Bush climate
change and energy issues, Turkey, Russia and Sweden's Eastern
neighbors, Afghanistan, Kosovo, and Iran.  While Sweden's
official foreign policy doctrine emphasizes non-alignment, in
practice Sweden is a pragmatic and strong partner with NATO,
having troops under NATO command in Kosovo and Afghanistan,
where it leads a Provincial Reconstruction Team.  In addition
to the meeting with President Bush, Reinfeldt will meet May
14 with SGY Ban Ki-moon and other UN officials in New York,
will meet in Washington with Speaker Pelosi and address the
House Select Committee on Energy, and will visit May 16 the
National Renewable Energy Lab in Colorado.  End Summary.

Reinfeldt as Prime Minister
---------------------------
¶2.  (u) Prime Minister Fredrik Reinfeldt will meet with
President Bush May 15.  Reinfeldt, 41, became Prime Minister
in October 2006 following the victory in parliamentary
elections of his center/right coalition, the Alliance for
Sweden.  Reinfeldt's Moderate party has the leading role in
the Alliance, controlling the ministries of Finance, Foreign
Affairs, Justice, and Defense.  The others making up the
Alliance government are the Center, Liberal, and Christian
Democrat parties.  Before this election, Social Democrats had
controlled the government for 64 of the prior 73 years.

¶3. (u) The Moderate-led government was voted into office by
promising to create jobs while protecting the fundamentals of
Sweden's long-established and popular social welfare system.
During seven months in office, the Alliance government has
changed the labor laws to reduce unemployment benefits and
provide incentives to employment.  It has announced plans to
do away with the wealth tax and abolish the valuation-based
property tax, replacing it with a much-reduced local tax.  It
has introduced and is expected to pass legislation
authorizing the sale of six large state-owned businesses
during the coming three years.

Sweden as a Partner
-------------------
¶4.  (u) The new government retains Sweden's commitment to
multilateralism, with an emphasis on the roles of the UN and
EU, and values continued cooperation with NATO.  Sweden has
troops under NATO command in Kosovo (300 troops) and
Afghanistan (250 troops), where it leads the Provincial
Reconstruction Team at Mazar-e-Sharif.  The government
recently introduced legislation to raise the number of troops
authorized for deployment in Afghanistan to 600, with the
proviso that they will be deployed only if circumstances
require.

¶5.  (c) Sweden's official security policy is
non-participation in military alliances during peacetime and
neutrality during wartime.  Its active participation in the
NATO Partnership for Peace and its role in leading the
European Union's 1,500 troops-strong Nordic Battle group give
the lie to the official policy.  Sweden has opted out of
buying two C-17s and has subsequently joined and made the
second-highest contribution to the NATO-sponsored Strategic
Airlift Capability.  This will, in the long run, support of
the Nordic Battle group and other strategic lift
requirements.  Sweden also plays an important role in Darfur,
where former Swedish Foreign Minister Jan Eliasson is the UN
Special Envoy and Sweden supports democratization and
humanitarian relief.  Within the EU, Sweden often takes
positions that coincide with our own on issues as diverse as
the DOHA round, EU enlargement and Turkey, Swift banking data
privacy, and the EU's relationship with Cuba.

¶6.  (s) Swedish military and civilian intelligence
organizations are strong and reliable partners on a range of
key issues, particularly making a significant contribution to
our understanding of events inside the Russian military and

STOCKHOLM 00000506  002 OF 003


in Iran's nuclear ambitions.  The good cooperation on
counterterrorism, both domestically and internationally, has
helped Swedish authorities carry out their mandate to protect
Swedish citizens and national interests.  Due to domestic
political considerations, the extent of this cooperation in
not widely known within the Swedish government and it would
be useful to acknowledge this cooperation privately, as
public mention of the cooperation would open up the
government to domestic criticism.

Cooperation on Alternative Energy
---------------------------------
¶7.  (u) Embassy Stockholm has set as its highest priority
cooperation with Sweden to achieve a breakthrough in the
development of alternative energy sources.  As a leader in
research and development and policy initiatives in
alternative energy, Sweden is a natural partner to the U.S.
The government has invested extensively in energy research
and provides a wide array of policy incentives to stimulate
the expansion of renewable power production and the use of
alternative fuels and energy.  The new government has pledged
to cut CO2 emissions by 25 percent by the year 2020.  A
strong proponent of the Kyoto Protocol, Sweden is one of only
two EU countries likely to meet its 2012 Kyoto Protocol
targets.

¶8.  (c) The Swedes assume the EU presidency in the latter
half of 2009 and have announced that climate change will be
at the top of their agenda (we note that this will be just as
serious campaigning begins for Sweden's September 2010
parliamentary elections).  We also note that Sweden was a
strong supporter in the EU of positive U.S.-EU Summit
Statement on energy security, efficiency, and climate change.
 Sweden considers it critically important that the United
States be at the table during discussions of a post-2012
framework to address climate change.  Sweden will do what it
can to help set conditions to ensure that the United States,
as well as China, India and other primary GHG emitters from
the developing world are brought into these discussions and
negotiations.  Swedish Minister of Environment Andreas
Carlgren is hosting a ministerial June 11-14 in northern
Sweden entitled "Midnight Sun Dialogue on Climate Change."
It is important to note that the title does not mention the
word Kyoto; this is no accident.  The Swedes hope to usher in
a post-2012 agreement during their 2009 Presidency of the EU.
 PM Reinfeldt will want to discuss his plans with you.

¶9.  (c) The Embassy's initiative on intensifying
collaboration with Sweden on alternative energy (known as
"The One Big Thing" - OBT) has helped ease the path for the
more constructive tone of discussions on climate change in
Sweden and has done much to set a positive overall tone
between our governments.  The emergence of the new
center-right government -- reflexively more pro-American and
pro-business -- has been fortuitous.  PM Reinfeldt and his
ministers want to work with us, understand well the need for
technology-based solutions to energy needs, and recognize
that important new opportunities exist for Swedish business
which is on the cutting edge of alternative energy technology
and research.  There is both good will and the desire for
bottom line results.  The success of the "One Big Thing" will
not ultimately depend on political good will, but on results.
 Reinfeldt told the Ambassador there had been a dramatic
shift in Sweden and in the EU on the possibility of providing
technology-based solutions to a reduction of green-house
gases; green issues could be combined with market-based
solutions.

¶10.  (c) The OBT has made significant progress in several key
areas.  Among the most significant are:

-- Negotiation (in progress) of a DoE/Sweden/Volvo joint
research agreement regarding hybrid engines for heavy trucks;
-- Commitment by Sweden's Chalmers University to host a
Fulbright Distinguished Chair in Alternative Energy
Technology; Chair to arrive in August 2008;
-- Matching promising initiatives with venture capital,  List
of 30 promising Swedish alternative energy companies given to
18 U.S. Venture Capital firms interested in alternative
energy investment; the meeting which took place on 4/19 in
Stanford, California generated considerable interest;
-- Participation of Swedish industry in an imminent contract
awarded by DARPA to Swedish Biofuels AB for the development
of jet fuel made from bio fuels;
-- An agreement on second generation biofuels between the
Swedish Energy Agency and the DOE will soon be ready for
signature.


STOCKHOLM 00000506  003 OF 003


Topics the Prime Minister will Raise
------------------------------------
¶11.  (s) Prime Minister Reinfeldt has informed us he plans to
raise with President Bush:

-- Climate change and energy.  This may include reference to
a post-2012 framework, especially in the context of Sweden's
EU presidency in the second half of 2009, and cooperation on
alternative energy;
-- DOHA, where Sweden has played a positive role in the EU.
Reinfeldt told the Ambassador Sweden would like to see the
DOHA round finalized during the German presidency of the EU.
A prominent Swedish businessman, Marcus Wallenberg, is also
Chair of the International Chamber of Commerce and has
lobbied on behalf of DOHA;
-- Turkey, where Reinfeldt is concerned that the split within
the EU could become more pronounced if Sarkozy wins the
French elections.  Reinfeldt told the Ambassador May 4 that a
French move to make it harder for Turkey to join could be
make it easier for Germany, which is also reluctant for
Turkey to join, to come down on the right side.  In Sweden's
view, signaling to Turkey that its chances are decreasing
would be the wrong message, particularly in view of upcoming
elections in Turkey.
-- Russia and Sweden's Eastern neighbors.  Reinfeldt
mentioned energy security as a primary issue; Sweden is
likely also to raise democratization and human rights issues,
and has expressed concern over developments in Russia's
relations with Estonia;
-- Afghanistan, where Sweden leads a PRT.  Reinfeldt
underscored to the Ambassador that Sweden is firm in its
long-term commitment to the PRT and will authorize additional
troops (going from 350 to 600 authorized) to go there if
needed.  He did not raise or react to reports from DOD
channels that U.S. defense channels had raised the
possibility of a Sweden hosting a second PRT.  Sweden has
previously raised concerns regarding its lack of access, as a
non-member of NATO, to intelligence, particularly in
connection with force protection;
-- Kosovo and
-- Iran.  We note that Iranian FM Mottaki will be in
Stockholm May 7 and will meet with Deputy Prime Minister Maud
Olofsson and FM Bildt, as well as members of parliament.

Other Issues
------------
¶12.  (c) Immigration and refugees, including from Iraq.
Sweden took in 9,000 refugees from Iraq in 2006; projections
are that it will receive 25,000 Iraqi refugees in 2007.
Sweden is now the destination for over one-half of all Iraqi
refugees going to EU countries.  Immigrants from Muslim
countries now constitute about four percent of Sweden's
population.  Sweden has recently cited the burden of taking
care of arriving refugees in response to U.S. requests for
Sweden to consider accepting third-country nationals now in
U.S. custody.

The Swedish Delegation
----------------------
¶13.  (u) We have been informed that the Swedish delegation
coming to the U.S. will include:

-- Mr. Fredrick Reinfeldt, Prime Minister;
-- Ms. Nicola Clase, State Secretary, Prime Minister's Office;
-- Mr. Frank Belfrage, State Secretary MFA;
-- Mr. Johan Frisell, Director, Prime Minister's Office;
-- Ms. Katarina Areskoug Mascarenhas, Adviser of EU Affairs,
Prime Minister's Office;
-- Mr. Anders Turesson, Senior Adviser, Ministry of the
Environment;
-- Mr. Hakan Malmqvist, Head of the Americas Department,
Ministry of Foreign Affairs;
-- Ms. Maria Elgstrand, Political Adviser, Prime Minister's
Office;
-- Mr. Oscar Hallen, Press Secretary, Prime Minister's Office.
WOOD