VZCZCXYZ0002
RR RUEHWEB
DE RUEHMD #2302/01 3621204
ZNR UUUUU ZZH
R 281204Z DEC 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 4008
INFO RUEHAK/AMEMBASSY ANKARA 0411
RUEHPG/AMEMBASSY PRAGUE 1047
RUEHRB/AMEMBASSY RABAT 6075
UNCLAS MADRID 002302
SIPDIS
SENSITIVE
SIPDIS
FOR H - PLEASE PASS TO CODEL MARTINEZ
E.O. 12958: N/A
TAGS: OREP PREL SP
SUBJECT: SPAIN SCENESETTER FOR CODEL MARTINEZ
1. (SBU) Summary: I warmly welcome Codel Martinez to Madrid.
When you arrive, Spain will be emerging from the Holidays
and starting to focus on what is likely to be a very
competitive March 9 general election. Although the media
here prefers to focus on the allegedly frosty U.S.-Spain
relationship that followed Spain's 2004 withdrawal from Iraq,
your visit is an important opportunity to emphasize that our
two countries have overriding common interests in fighting
terrorism and organized crime, strengthening NATO and the
Transatlantic security relationship, and in promoting the
spread of democracy. End summary.
Counter-Terrorism and Law Enforcement
-------------------------------------
2. (SBU) U.S.-Spain relations were seriously damaged by
President Zapateros's decision soon after his reelection in
2004 to precipitously withdraw Spanish forces from Iraq.
However, over the last several years both countries have made
a concerted and successful effort to rebuild the relationship
based on strong mutual interests in counter-terrorism,
fighting narcotics trafficking and organized crime, and
rapidly expanding economic ties. The real bilateral story is
found in novel initiatives such as the HSPD-6 agreement we
signed in September to facilitate the sharing of information
between our national counter-terrorism authorities. Spain is
home to a large and growing Muslim population. The March 11,
2004, train bombings were a shock to Spain (21 of the
suspects were convicted here in October). Spain remains a
target of Islamic extremists; al-Qaeda has called for attacks
to recapture the medieval "Al Andalus". The Spanish are
actively pursuing Islamic extremism terrorism-related
investigations and have scores of suspects in jail. Neither
has the threat of ETA terror gone away: two Spanish Civil
Guard officers were murdered in France in early December by
the Basque terrorist group.
3. (SBU) Narcotics trafficking is another area of common
concern. Andean cocaine is a serious problem here, and
Colombian trafficking organizations are active in Spain.
Money laundering is another serious issue. We are eager to
find ways to increase bilateral cooperation and to encourage
Spain to engage more aggressively with law enforcement
authorities in key Latin American countries.
Security and Diplomatic Cooperation
-----------------------------------
4. (SBU) Spanish military cooperation matters. The bases of
Rota and Moron are key hubs, midway between the U.S. and
Afghanistan and Iraq. U.S. planes and ships account for
around 5,000 flights and 250 port calls a year in Spain. The
Spanish military is pro-U.S. and pro-NATO. The navy employs
the AEGIS system in its frigates and has been working for
five years to acquire the Tomahawk missile system. Spain is
also interested in the Joint Strike Fighter. We need to keep
this military-to-military relationship strong.
5. (SBU) Spain has 750 troops with ISAF in Afghanistan and a
provincial reconstruction team in Badghis province. They
have contributed some 150 million Euros in Afghan
reconstruction funds. Planning is underway to allow the
Spanish to train and equip an Afghan Army company, which we
hope will be a prelude to the training and equipping of a
full battalion. On Iraq, Spain has contributed $22 million
to the Basrah Children's Hospital and a further $28 million
in development funding for Iraq. Spain has nearly 1,100
troops with UNIFIL in Lebanon and about 700 in Kosovo.
6. (SBU) On the diplomatic front, Spain in recent years has
more often been a follower than a leader, looking to stay
within EU consensus on issues such as Kosovo, Iran, and
missile defense. It is more forward-leaning on the Middle
East peace process, undoubtedly driven by FM Moratinos' long
personal involvement in the issue. Moratinos was an eager
participant in the Annapolis Conference and helped ensure
Spain made a robust pledge of support for the Palestinian
Authority during the recent Paris donors' conference. Driven
by the twin threats of terrorism and illegal immigration,
Spain is also increasing its engagement with the countries of
North and Western Africa.
7. (SBU) Spain is the second largest investor in Latin
America (after Brazil) and wields significant influence
there. Spain wants strong democratic and free market
institutions in the region. Nevertheless, we have sharp
differences over Cuba. Spain's socialist government has
opted for engagement, claiming it can encourage regime
elements who want change. We take every opportunity to
remind the Spanish that the Cuban regime is only interested
in survival and that the Cuban dissidents need and deserve
the active and visible support of democracies everywhere. On
Venezuela, the socialists' early efforts at constructive
engagement with Chavez have gone sour. At the most recent
Iberoamerican Summit, King Juan Carlos publicly interrupted a
Chavez tirade about former Spanish President Aznar, telling
the Venezuelan President to "shut up." The government is
uncomfortably situated between Spanish companies who fear
Chavez will move against their Venezuela interests and the
strong public support for the King.
Economy
-------
8. (SBU) Spain has one of the fastest growing economies in
Europe. In fact, the economy has grown in each of the last
15 years, and per capita GDP passed Italy's in 2006. In the
last several years, a housing boom has contributed greatly to
growth, but as elections approach, housing prices are
stagnating, construction is slowing, and unemployment and
inflation are staring to creep up. U.S. investment has long
been important to the economy (more so than bilateral trade),
but the tables have turned. This year, Spain has been the
fourth largest foreign investor in the U.S., with particular
emphasis in banking, construction, and renewable energy. In
the latter sector, Spain has the world's largest and third
largest wind power firms, and Spanish firms also are active
in U.S. solar and biofuels projects.
Elections
---------
9. (SBU) Spain will hold a general election March 9, and the
campaign will just be heating up as you arrive. The ruling
Spanish Socialist Workers' Party (PSOE) candidate is
President Jose Luis Rodriguez Zapatero. Despite a strong
economy, a budget surplus, and a variety of social spending
initiatives, the early polls indicate a close race.
Nevertheless, the polls also suggest Partido Popular (PP)
candidate Mariano Rajoy has had limited success getting his
message out. The PSOE will run on the economy and its social
programs. The PP will argue the economy is softening and
that the PSOE has made too many concessions to Basque and
Catalan regional governments, is weak on ETA, and soft on
illegal immigration. Foreign affairs is unlikely to be a key
issue, but the PSOE will remind voters it got Spain out of
Iraq while the PP will say Spain's international prestige has
slipped.
Conclusion
----------
10. (SBU) Again, I am looking forward to your visit. While
we want to avoid being an issue in the Spanish elections, we
do need to remind Spain that the bilateral relationship is
founded on strong mutual interests such as counter-terrorism
and law enforcement. Regardless of who wins in March,
terrorists, drug traffickers, and alien smugglers will
continue to see both our countries as targets. We have much
work to do together.
AGUIRRE