Cablegate: Ambassador's Outreach to Galicia

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 MADRID 001122

SIPDIS

FOR EUR/WE

E.O. 12958: N/A
TAGS: PGOV ECON ETRD PREL SP
SUBJECT: AMBASSADOR'S OUTREACH TO GALICIA

1. Summary: The Ambassador traveled March 30-31 to Santiago
de Compostela, capital of the northwestern region of Galicia,
to open the eighth in a series of regional seminars on
E-Commerce and Internet for small and medium sized firms.
The Ambassador took the opportunity to meet with President of
the Galician region and eminent Spanish politician Manuel
Fraga and President of Galicia's regional parliament Jose
Maria Leira as well as a group of prominent Galician business
leaders to discuss economic and political issues. Neither
the politicians, both of whom are Popular Party (PP) members,
nor the business leaders were pleased with the Socialist
Party victory in the March 14 national elections. However,
they said they would work cooperatively with the new
Administration just as they had the last time the Socialists
were in office (1982-96). At the March 31 business seminar,
the Ambassador highlighted the significant potential for US
and Spanish firms in the areas of Internet and E-Commerce.
In his meetings as well as in interviews with local press,
the Ambassador expressed condolences for the March 11
terrorist attacks in Madrid and pledged continued cooperation
in fighting terrorism. End summary.

2. The Ambassador traveled to the capital of Galicia,
Santiago de Compostela, to open the eighth in a series of
regional seminars focused on opportunities for small and
medium sized companies in E-Commerce and Internet-based
trade. This seminar, like the previous seven, was organized
by the Spanish Employers Association (CEOE) with the
assistance of the US Commercial Service. In his
presentation, the Ambassador highlighted the objectives of
the seminar: to help Spanish firms to build technological
bridges with the US, find the latest in US technology and
promote strategic alliances with US companies. He pointed
out the great potential for expanded ties between US and
Spanish firms in the areas of Internet and E-Commerce. While
over 80% of US firms have their own website on the Internet
and more than 60% of US businesses buy and sell on-line, only
40% of Spanish companies have their own site and only 11% are
active on E-Commerce transaction, with most of the purchases
by Spanish firms and individuals coming from the US (37%).
The Commercial Service has planned trade missions and other
trade events designed to bring together small and medium
sized companies from both countries to get to know each other
and do business together.

3. The night before the seminar, the Ambassador had dinner
with a small group of Galician business leaders to ask them
about the growth prospects for their respective sectors and
to get their take on the outcome of the March 14 national
elections. While all of the participants expressed
disappointment with the Socialist election victory, they
expressed hope that President-elect Rodriguez Zapatero would
surround himself with an experienced, moderate team that
would keep the economy on track.

4. The Ambassador took advantage of his visit to Santiago de
Compostela to meet with Galicia President Manuel Fraga.
Fraga has played a key role in Spanish politics since 1951,
including service as a minister in the administrations of
General Franco and the first monarchical government, and as
President of Galicia since 1989. He is known as the father
of the Popular Party, having created its predecessor in 1977
and served as the first head of the PP.

5. As he did in every meeting, the Ambassador expressed
condolences for the terrorist attacks of March 11. Fraga
said that the terrorists chose the exact moment to have
maximum effect on the elections, noting that in the aftermath
of the attacks, many decided voters switched sides and
undecided voters determined to come out and vote Socialist.
Had it not been for 3/11, the PP clearly would have won.
When asked how the Galician government would work with the
new administration, Fraga harkened back to the 1982-96
Socialist administration of Felipe Gonzalez when the Galician
government was concurrently run by the PP. While support
from Madrid was easier with the PP in power, "we will work
with the Socialists now as we did before," he said. He
characterized as "reasonable Socialists" Jose Bono, tapped to
be the new Defense Minister, and Miguel Angel Moratinos, the
probable future Foreign Minister. Fraga commented that few
people in Spain understood President Aznar's Atlanticist
views, although Fraga himself, the son of immigrants from
Cuba with family in Latin America, agreed that Spain must
have strong relations with the Americas.

6. When asked for his views of the outcome of the March 14
elections, Parliamentary President Jose Maria Leira also
referred back to the previous Socialist administration and
stated his intention to work with the Socialists now as he
did then. He mused that while governance will be more
difficult now in some ways, it can actually be easier to make
demands of the central government when the administration is
the opposition. Leira criticized the Socialists' record
during their last stint in power, saying that unemployment
and inflation rose while the deficit increased. The past 8
years of PP administration brought reduced unemployment and
inflation as well as a balanced budget. Leira expressed
dismay at recent statements by a Socialist leader that the
new administration might accept at least a short period of
budgetary deficits. He listed as challenges for the new
government improving infrastructure, particularly
communications, rail and ports.

7. In a one-on-one interview with the local paper "Voice of
Galicia" and short comments to reporters after his meeting
with Fraga and his presentation at the business seminar, the
Ambassador expressed US support for Spain in the wake of the
March 11 terrorist attacks and pledged continued
anti-terrorism cooperation. He also made clear that
regardless of who leads the Spanish government, the US and
Spain will continue to be good friends and work together on a
full range of issues.
ARGYROS

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