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Cablegate: Hamburg, Germany: Scenesetter for Codel Costello

VZCZCXRO2435
PP RUEHAG
DE RUEHAG #0058/01 2282034
ZNR UUUUU ZZH
P 162034Z AUG 07
FM AMCONSUL HAMBURG
TO RUEHC/SECSTATE WASHDC PRIORITY 0174
INFO RUEHRL/AMEMBASSY BERLIN PRIORITY 0161
RUEHTU/AMEMBASSY TUNIS PRIORITY 0003
RUEHIT/AMCONSUL ISTANBUL PRIORITY 0003
RUEHVB/AMEMBASSY ZAGREB PRIORITY 0009
RUEHMIL/AMCONSUL MILAN PRIORITY 0001
RUEADWD/HQDA WASHINGTON DC
RUEHAG/AMCONSUL HAMBURG 0194

UNCLAS SECTION 01 OF 03 HAMBURG 000058

SIPDIS

DEPARTMENT PLEASE PASS TO CODEL COSTELLO.
DEPARTMENT FOR H /MARK SMITH AND EUR/AGS.
SIPDIS

E.O. 12958: N/A
TAGS: OREP PREL PRGOV ECON GM
SUBJECT: HAMBURG, GERMANY: SCENESETTER FOR CODEL COSTELLO

REF: STATE 107590

1. (U) Consulate General Hamburg warmly welcomes Congressman
Jerry Costello and his delegation to Hamburg, Germany August
24-27. The U.S. has had a strong relationship with the Free and
Hanseatic State of Hamburg for almost 220 years. Commissioned
in 1790, ConGen Hamburg has been working to foster U.S. - German
relations and trade. Your visit will further this on-going
cooperation, particularly in the areas of airport and harbor
security. Your appointments will include a visit to Lufthansa
Technik's Hamburg headquarters and facilities, a tour of the
Port of Hamburg with representatives of the Hamburg Harbor
Police and the U.S. Department of Homeland Security's (DHS)
Container Security Initiative (CSI), and a discussion with
HOCHTIEF Airport and Hamburg Airport representatives on the
recent privatization of the facilities. ConGen Hamburg is also
pleased to host a reception for the delegation with members of
the German Parliament, state parliaments, interior ministry
representatives, law-enforcement officials (harbor police,
police, customs) and representatives of U.S. and German
companies in the shipping, transport, and aerospace sectors.

GERMANY: POLITICAL AND ECONOMIC OVERVIEW

2. (U) After nearly two years in office, Chancellor Angela
Merkel's grand coalition between her own party, the
right-of-center Christian Democratic Union (CDU, joined by its
Bavarian sister party the Christian Social Union, or CSU), and
the left-of-center Social Democratic Party of Germany (SPD) is
in good shape and seems likely to survive until its four-year
term expires in 2009. Chancellor Merkel's consensus-style
leadership keeps a lid on tensions between the two parties,
Germany's largest and traditional opponents, and wins her high
ratings in public opinion polls. She is a strong advocate of
close ties with the United States, and bilateral relations have
improved since she took office in November 2005. This positive
cooperation was particularly noticeable in the outcomes of the
U.S.-EU Summit in April in Washington and the G8 Summit which
was hosted in June in the Northern German town of Heiligendamm.
Among the German people, however, skepticism towards the United
States over the invasion of Iraq, climate change,
counter-terrorism, NATO cooperation in Afghanistan and other
issues remains high.

3. (U) The German economy in 2006 had its best year since 2000.
Its GDP grew 2.7 percent, and economists are predicting growth
of over 2 percent in 2007 and 2008. Tax revenues are up and the
government's budget deficit is now well within the European
Union's "Maastricht criteria" (3 percent of GDP). Business
confidence is high. Employment is increasing and some employers
complain of a shortage of skilled workers. Unemployment
continued to drop over the summer months to 8.9 percent in July,
seasonally adjusted, and economists now forecast annual
unemployment of 8.7 percent in 2007. (Unemployment is still
nearly twice as high in the states of the former GDR, however,
and long-term unemployment also remains high in the Ruhr and
some other parts of western Germany where old smoke-stack
industries have shut down in the face of global competition.)
German companies have cut costs, and labor productivity per
capita rose 1.8 percent in 2006. Germany's trade unions feel
they might be regaining political and economic power and after
years of wage restraint are again demanding higher pay.
Although unions only represent about 25 percent of German
workers, union contracts cover 65 percent of the workforce.

WORLD LEADER IN AIRCRAFT REPAIR AND MAINTENANCE

4. (U) Lufthansa Technik, which is headquartered in Hamburg, is
the world leader in the repair and maintenance of commercial
aircraft, their engines, and their components. The company has
bases at every major airport in Germany, as well as 50 others
world wide. Lufthansa Technik is certified not only as a
maintenance, repair and overhaul services (MRO) provider and
design organization but also as a manufacturer of aircraft
parts. The company boasts a wide array of experts as well as
repair services for over 50 different types of commercial and
private aircraft. U.S.-based airlines such as United Airlines
and American Airlines use Lufthansa Technik for their aircraft
maintenance and repair. With the growth of air travel over the
last few years, Lufthansa Technik has expanded to meet market
demand and the company has been able to further strengthen its
leading position in the MRO sector. In 2006, Lufthansa
Technik's revenues increased by 294 million euros (+ 9.4
percent) to 3.4 billion euros compared to 2005. On August 25,
you will tour the Hamburg facilities, which are attached to the
Hamburg Airport.


HAMBURG 00000058 002 OF 003


GERMANY'S PORT TO THE WORLD

5. (U) The port of Hamburg was first founded on May 7, 1189
through a charter in which the Emperor Friedrich Barbarossa
secured privileges for the people of Hamburg such as duty-free
passage on the lower Elbe river as far as the North Sea and the
right to hold markets. Over 800 years the port has developed
into the central hub for trade with Eastern and Northern Europe.
It is the second largest container port in Europe and currently
is the seventh largest in the world. Despite its location 120
km from the sea, the port is capable of handling the largest
container ships in the world. The port, which covers over 7,000
hectares, handled 134.9 tons of total cargo in 2006 - an
increase of 7.3 percent from the previous year. Not only is
Hamburg the largest German seaport, it is also the port of
registry for half of the German fleet and the head office of
numerous German shipping companies. Many foreign shipping
companies also have branches here. The city of Hamburg has
extensive plans to further develop the port's infrastructure and
bring it closer to the everyday lives of the city's citizens.
Your program's tour of the Port of Hamburg will not only provide
an up-close observation of trade activities within the port but
also the opportunity to discuss with the Superintendent of
Hamburg's Harbor Police and his staff the implementation of
International Port Security Codes and the monitoring of
container shipments. CSI representatives will also brief you on
their cooperation with German customs officials in the screening
of all U.S. bound containers.

6. (U) DHS's Container Security Initiative was developed by U.S.
Customs, now U.S. Customs and Border Protection (CBP), in the
aftermath of the terrorist attacks of September 11. The primary
purpose of CSI is to protect the global trading system and the
trade lanes between CSI ports and the U.S. Under the CSI
program, a team of officers is deployed to work with host nation
counterparts to target all U.S.-bound containers that pose a
potential threat for weapons of mass destruction (WMD). In
Germany, CSI teams have been stationed at the ports of Hamburg
and Bremerhaven since early 2003. Currently, seven permanent
and three temporary staff (consisting of eight CBP officers, one
intel analyst, and one special agent) are embedded with German
customs (Zoll) counterparts at these locations. Maritime
freight transiting German seaports is considered a heightened
threat due to historical use of Germany as a logistical base by
international terrorist organizations. Specifically, the
al-Quds mosque in Hamburg was a meeting place for the "Hamburg
Cell", which included three 9/11 suicide pilots and supporting
members. Recent arrests and investigations have shown that
al-Qaida and various other trans-national terrorist
organizations maintain active interest in Northern Germany. It
is the goal of CSI Germany to detect, deter, and disrupt
exploitation of maritime shipping infrastructure to support,
facilitate, or conduct a terrorist attack via container
shipments transiting the ports of Hamburg and Bremerhaven.

7. (U) In the evening of August 25, you will have the
opportunity to meet with German parliamentarians, who sit on the
Bundestag's transportation committee as well as local
politicians who work in the transport and infrastructure field
for a relaxed exchange of ideas at a Consulate-hosted reception.
We have also invited representatives from Hamburg's Interior
Ministry, customs, (harbor) police as well as U.S. and German
companies in the shipping, ship-building, transportation, and
aerospace industries. The companies regularly trade with the
United States and their leadership has expressed keen interest
in our new shipping regulations, such as 100 percent screening,
as well as programs such as CBP's Custom-Trade Partnership
Against Terrorism (C-TPAT).

HAMBURG AIRPORT: AN EXAMPLE OF A SUCCESSFUL PUBLIC-PRIVATE
PARTNERSHIP

8. (U) Prior to your departure on August 27, you will visit one
of Germany's oldest airports, the Hamburg Airport, which was
partially privatized in 2000. The airport has become an example
for a successful public-private partnership. 49 percent of the
airport's stock is held by Aer Rianta International (9.8
percent), HOCHTIEF AirPort (26.1 percent) and the HTAC
investment partnership (13.1 percent). The HTAC stake is
managed by HOCHTIEF AirPort (HTA). The City of Hamburg has
retained a 51 percent interest. The airport is currently
undergoing extensive modernization. In May 2005, the new
Terminal 1 was opened and construction is expected to be
completed in 2008 on a shopping plaza (Airport Plaza) that will
link the two passenger terminals and contain a local rail
station. With more than 10 million passengers every year

HAMBURG 00000058 003 OF 003


Hamburg Airport ranks as Germany's fourth-largest airport and in
2006 the airport reported a 12 percent growth rate. Over 72
airlines offer flights from Hamburg, including Continental's
direct flight to Newark and Emirates' flight to JFK. The
companies based at the airport employ more than 13,000 people
and generate 1.5 billion euro every year.

SUNDAY EXCURSION TO LUEBECK

9. (U) On Sunday we will visit the Hanseatic city of Luebeck on
the Baltic Sea coast. Luebeck was founded in 1143 and was for
several centuries the "capital" of the Hanseatic League.
Because of its brick gothic architectural heritage Luebeck is
on UNESCO's list of World Heritage Sites. Much of the old town
has kept a medieval look with old buildings and narrow streets.
The town once could only be entered by passing one of four town
gates, of which two remain today, the well-known Holstentor
(1478) and the Burgtor (1444). The old town center is dominated
by seven church steeples. The oldest ones are the Luebecker Dom
(the city's cathedral) and the Marienkirche (Saint Mary's), both
from the 13th and 14th centuries. Luebeck is very famous for
its excellent marzipan industry, and according to local legend,
marzipan was first made in Luebeck possibly in response to
either a military siege of the city, or a famine. According to
local legends, the town ran out of all foods except stored
almonds and sugar, and used these to make loaves of marzipan
"bread".

10. This message has been coordinated with Embassy Berlin.


LIBONATI
BUTCHER

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