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Cablegate: Readout of Brazil-Eu Summit, December 22-23, 2008

VZCZCXRO4814
RR RUEHRG
DE RUEHRI #0346 3591704
ZNR UUUUU ZZH
R 241704Z DEC 08
FM AMCONSUL RIO DE JANEIRO
TO RUEHC/SECSTATE WASHDC 4729
INFO RUEHBR/AMEMBASSY BRASILIA 1055
RUEHSO/AMCONSUL SAO PAULO 5218
RUEHRG/AMCONSUL RECIFE 3485
RUEHFR/AMEMBASSY PARIS 0037

UNCLAS RIO DE JANEIRO 000346

SIPDIS

E.O. 12958: N/A
TAGS: PREL PARM ENRG EPET SENV FR RS EU BR
SUBJECT: READOUT OF BRAZIL-EU SUMMIT, DECEMBER 22-23, 2008

SENSITIVE BUT UNCLASSIFIED

1. (U) Summary: Brazilian President Lula hosted the second
European Union (EU) - Brazil Summit in Rio de Janeiro on December
22-23, 2008. The EU was represented by French President Nicolas
Sarkozy and EU Commission President Jose Manuel Durao Barroso. The
international financial and economic crisis was a central topic of
discussion, with Brazil and the EU agreeing to cooperate towards a
common position at the next G-20 summit meeting in London on April

2. (U) Sarkozy and Lula also signed a defense cooperation agreement
and reached agreement to sell Brazil 50 military helicopters and
five submarines, including one intended to be nuclear-powered.
During the summit, Sarkozy expressed support for Brazil's bid for a
permanent seat on the UN Security Council. End Summary.

EU-BRAZIL COMMON POSITION FOR NEXT G-20 SUMMIT?

2. (U) After a commercial roundtable, Presidents Sarkozy and Lula
together with EU Commissioner Barroso met to discuss the developing
EU-Brazil strategic partnership. Later, Sarkozy announced that they
had agreed to take a common position dealing with the global
financial crisis at the next G-20 summit in London on April 2. "We
decided with President Lula that things must change and change
profoundly...we decided to narrow our positions and arrive in London
with a common vision, on the future role of the IMF, the system of
management of financial institutions...we cannot allow a single
financial institution to be uncontrolled or unsupervised," Sarkozy
said. No further details were made available on the specific G-20
proposals they were considering. Based on a review of the released
Summit declarations, it appears that Brazil and the EU have only
committed to working together to address the crisis and develop
solutions rather than to actually taking joint positions.

BRAZIL ACQUIRES MILITARY HARDWARE FOR NEW DEFENSE STRATEGY

3. (U) Lula and Sarkozy signed a $11 billion arms deal which
includes the transfer of technology from France to help build five
submarines, including the hull of what Brazil hopes will be Latin
America's first nuclear-powered submarine. Under the terms, France
will build five submarines at a new shipyard to be built in Itaguai,
an industrial zone near Rio de Janeiro. The deal also includes an
agreement for Brazil to purchase 50 Sugar Cougar transport
helicopters to be built by Helibras, Eurocopter's subsidiary in
Brazil (Eurocopter is the helicopter subsidiary of European
aerospace group EADS). The helicopters will be assembled in
Itaguja, in the Brazilian state of Minas Gerais, and are expected to
create 400 jobs.

4. (U) The military hardware deal comes one week after President
Lula unveiled a comprehensive new defense strategy that would
restructure Brazil's military and provide support for Brazil's
defense industries. Last month during a visit to Brazil by Russian
Presidnet Dmitry Medvedev, Brazil signed a deal to buy 12 Mi-35M
attack helicopters. These purchases, however, were negotiated prior
to the drafting of the new strategy paper.

OTHER AGENDA ITEMS

5. (U) The Summit addressed, more broadly, the desire of Brazil and
the EU to develop a closer relationship. Sarkozy's public statement
of French support for Brazil's bid for a permanent seat on the UN
Security Council was well received. Additional agreements were
signed on aerospace, the environment, and education. France and
Brazil also agreed to cooperate on combating illegal gold
exploration. They will also cooperate on new hydroelectric projects
in the Amazon region.

COMMENT

6. (SBU) Though Sarkozy's comments referred to an agreement for a
common G20 position, the official summit statements do not
explicitly commit to a joint position. Rather, Brazil and the EU
have committed to work together to address the crisis and develop
solutions. The summit statements don't concretely commit money or
launch any big initiatives, but promise to keep talking and looking
at areas of common interest. Of note, however, is how differently
Brazil approaches France and the U.S. The Brazilians signed a
defense cooperation agreement with France, the same kind of
agreement they have refused to act on for several years with the US.
Sarkozy also said that protecting the Amazon is a task for all
humanity -- this did not create the same furor as it did when an
American said something along the same lines.

7. (U) This message has been cleared by Embassy Brasilia.


MARTINEZ

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