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

C O N F I D E N T I A L SECTION 01 OF 04 MADRID 001141

SIPDIS

STATE FOR D AND EUR/WE
NSC FOR VOLKER

E.O. 12958: DECL: 03/23/2015
TAGS: PREL PGOV PTER MOPS ECON IZ SP NATO
SUBJECT: SPAIN: SCENESETTER FOR DEPUTY SECRETARY VISIT TO
MADRID

Classified By: Charge d'Affaires J. Robert Manzanares,
reasons 1.4(b) and (d).

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SUMMARY
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¶1. (C) Your visit to Madrid comes after a difficult year in
our bilateral relationship but also at a time when we are
gradually moving relations to a more positive track. The
Madrid train bombings in March 2004 came as a terrible shock
to a country that felt it was accustomed to dealing with
terrorism (in the form of its 30-year conflict with ETA) and
considered itself a bridge between the Islamic world and the
West. Voters punished the then-ruling Popular Party after
the attacks out of resentment over President Aznar's decision
to ignore strong public opposition to the deployment of
Spanish forces to Iraq, and for the government's mishandling
of the investigation into the train bombings. A year later,
President Zapatero's Socialist Party has consolidated its
control at the national level and the Popular Party remains
very much on the defensive.

¶2. (C) At the international level, Zapatero is working to
repair relations with the USG damaged by Spain's sudden and
poorly coordinated pullout from Iraq and by the Spanish
government's sharp rhetoric against U.S. policy in Iraq.
While the public strongly supported Zapatero's withdrawal of
troops from Iraq, the Socialists' mishandling of relations
with the U.S. exposed the GOS to media and opposition
attacks. We are slowly putting relations back on track,
though differences remain on some issues, such as Spain's
unwillingness to permit the deployment of Spanish NATO
officers to support NATO operations in Iraq. Our objective
is to work with Spain on issues of importance to us and,
where possible, to steer the Zapatero government away from
actions that undermine USG policy objectives. Bilateral
cooperation against terrorism remained strong despite
turbulence in other aspects of the relationship, as did
military to military relations. Spain continues to provide
U.S. forces full access to its naval base at Rota and its air
base at Moron, as well as providing blanket flight clearances
for U.S. forces moving to and from Iraq and Afghanistan.
Spanish Foreign Minister Miguel Angel Moratinos and Minister
of Defense Jose Bono are scheduled to visit Washington this
spring for meetings with Secretary Rice and Secretary
Rumsfeld, and the Ministers of Interior and Justice are
arranging meetings in Washington as well. End Summary.

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A YEAR AFTER THE ATTACKS
------------------------

¶3. (C) You arrive in Spain just over a year after the Madrid
train bombings of March 11, 2004 killed 191 people and
wounded over 1600. It was the worst terrorist attack ever in
an EU country and shook a nation that felt it was accustomed
to dealing with terrorism as a result of its 30-year conflict
with ETA. Attorney General Alberto Gonzales's attendance at
the one-year commemoration of the bombings symbolized USG
support for the victims of the attack and our respect for the
Spanish people. Secretary Powell's visit to Spain in the
wake of the 3/11 attacks was appreciated as a positive
gesture, but bilateral friction between the USG and the
Zapatero government since that time has generated a public
perception that the USG is punishing Spain for Zapatero's
actions. Both the USG and the Zapatero government have an
interest in putting relations on a more positive track and
your visit is a signal that despite our differences we value
Spain as an ally.

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SOCIALISTS IN CONTROL OF NATIONAL GOVERNMENT
--------------------------------------------

¶4. (C) The 3/11 attacks and their aftermath were a turning
point in modern Spanish politics. After taking office in
1996, President Aznar led his center-right Popular Party (PP)
to unprecedented power at the national and regional level.
Although he was not a candidate in 2004, the PP was poised to
win its third national election in a row, despite widespread
dissatisfaction with Aznar's decision to contribute forces to
U.S.-led operations in Iraq. The Madrid train attacks
shocked the Spanish public and triggered an outpouring of
grief and sadness, but then anger when the PP government
continued to blame ETA for the bombings after evidence arose
pointing to Islamic radicals as authors of the attacks. The
bombings allowed the Socialists to capitalize on simmering
resentment of Aznar's decision to send troops to Iraq,
leading to a huge voter turnout and a Socialist victory.

¶5. (C) Zapatero moved quickly on his pre-election promise to
withdraw Spanish forces from Iraq, a move widely supported by
the Spanish public. He then pressed forward on a social
agenda that appealed to Spain's center-left electorate (gay
rights, curbing the power of the Catholic Church, better
relations with regional governments in Catalonia and the
Basque Region) further broadening the Socialists' appeal.
Aznar and the PP, meanwhile, remained unapologetic for their
handling of the 3/11 bombings and declined to sideline
leaders discredited by their actions in the wake of the
bombings, further eroding their public support. Zapatero's
main internal challenge is an effort by the Basque Regional
Government (comprised of moderate Basque nationalists opposed
to ETA violence) to increase its autonomy from Spain's
central government. This is a potential powder keg since
most other regions of Spain strongly oppose increasing the
Basque Region's already considerable independence, unless
they too are given greater independence. Zapatero now enjoys
an approval rating of over 60 percent and, barring a major
setback, is likely to remain in power for at least one term
(until 2008). The Socialist Party (PSOE) as a whole also
gets much higher marks today than the PP opposition.

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STRAINED BILATERAL RELATIONS
----------------------------

¶6. (C) The first eleven months of the Zapatero administration
have proven among the most difficult in recent U.S.-Spanish
history. Throughout the most frustrating episodes, the USG
won points for sticking to the high road and refusing to be
baited into public disputes with the GOS. Despite our
efforts, senior GOS officials continued to make unhelpful
remarks throughout 2004, particularly regarding the U.S. role
in Iraq. Spain has also irritated us by leading an effort to
ease EU pressure on Cuba and engaging the Chavez government
in Venezuela, mainly to satisfy leftist supporters and to
contrast Zapatero's emphasis on "dialogue" with Aznar's
tougher line.

¶7. (C) The turning point in Zapatero's approach to the U.S.
came when former Ambassador Argyros declined to attend
Spain's October 12 national day parade, putting the public
spotlight on our disappointment with the tone and direction
of Spanish foreign policy. This episode undermined Spanish
government assertions in the press that Zapatero's policies
had not strained ties with Washington. This exposed Zapatero
to withering opposition criticism that he had scuttled one of
Spain's most important bilateral relationships and relegated
Spain to second-class status. While polls consistently
demonstrate widespread hostility among Spaniards to USG
foreign policy, the public still expects the GOS to maintain
healthy working relations with the U.S. Zapatero has
responded accordingly and has initiated moves to repair ties
with the USG.

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RECENT POSITIVE GESTURES
------------------------

¶8. (C) Since November, Spanish officials at all levels have
made clear their desire to restore strong bilateral ties,
with the Foreign Ministry's Director General for Foreign
Policy (under secretary equivalent) telling us bluntly, "We
want back in." In response, we've told our Spanish contacts
that we are prepared to move forward on issues of bilateral
importance and that unambiguous, positive steps by Spain
would be the best signal to the USG that they too were ready
to move forward. Spain subsequently agreed to USG requests
that it lead a Provincial Reconstruction Team and a Forward
Support Base in western Afghanistan as part of NATO's mission
in that country, issued positive statements regarding the
Iraq elections, and contributed $20 million to the Iraq
elections fund. Spain also continues to disburse $300
million in assistance to Iraq pledged during the 2003 Iraq
Donors Conference in Madrid, and has agreed to train Iraqi
security forces in Spain. We expect Foreign Minister
Moratinos to highlight these moves during his April 15
meeting with Secretary Rice.

¶9. (C) The USG has welcomed these steps, while making clear
that we remain troubled by mixed signals from Spain, such as
continued characterizations of the conflict in Iraq as "an
illegal war" by senior Spanish officials. Separately, we
want Spain to lift its caveats on the deployment of Spanish
NATO officers to participate in NATO missions, including in
Iraq. Also, Zapatero is negotiating to sell naval vessels to
Venezuela to support Spain's troubled shipbuilding industry
and Spain continues to press for closer EU ties with Castro.
Despite these differences, we believe relations are moving in
a positive direction and we want to move ahead in our
significant bilateral agenda with Spain.

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COUNTER-TERRORISM COOPERATION
-----------------------------

¶10. (C) A critical element in our bilateral relationship is
our high level of cooperation on law enforcement and
counter-terrorism issues. Spain remains an active front in
the War on Terror. Investigations since the 3/11 attack have
confirmed suspicions that there is a large pool of Islamic
extremists throughout the country, including one cell that
plotted attacks against Spain's High Court and other targets
during the latter half of 2004. ETA also continues to carry
out small-scale bombings, though it has been greatly weakened
in the last year by arrests of key leaders in Spain and
France. Spanish authorities arrested 117 suspected Islamic
terrorists during the year, routinely sharing with USG
officials information derived from those arrests. A DOJ team
met with Spanish counterparts in December to identify
mechanisms for improving information sharing and judicial
cooperation, particularly on counter-terrorism
investigations. Attorney General Gonzales and Minister of
Justice Aguilar issued a joint statement on March 11, 2005
committing the USG and GOS to closer cooperation on
counter-terrorism investigations. Aguilar and Minister of
Interior Jose Antonio Alonso had excellent meetings with
Attorney General Gonzales. Alonso will travel to Washington
April 18 and Aguilar will visit May 5.

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MILITARY COOPERATION
--------------------

¶11. (C) Military to military relations remain very strong
despite the change in government; the Zapatero government has
continued to provide broad access for U.S. forces to Rota
Naval Base (on Spain's southern coast) and Moron Air Base
(southwest Spain). There are currently over 2500 active duty
U.S. military stationed at the two bases, the vast majority
at Rota. The American presence at the bases tops 5,000 when
U.S. civilians and dependents are included. Zapatero has
also left untouched Spain's practice of providing blanket
flight clearances for U.S. military aircraft, including in
support of operations in Iraq and Afghanistan. The Spanish
military is still smarting from its ignominious withdrawal
from Iraq and, largely as a result of the Iraq withdrawal, is
very unhappy with the Socialist government. The Spanish
armed forces strongly support close relations with the U.S.
and consider Zapatero's distancing from the U.S. a profound
error. Minister of Defense Bono will meet with Secretary
Rumsfeld May 3 in Washington.

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BROADER MIDDLE EAST
-------------------

¶12. (C) The Zapatero government may tell you it has much to
offer in finding solutions to the issues that face the
Broader Middle East because of Spain's proximity to the area
and its experience with Islamic immigrants. FM Moratinos in
particular touts his experience as the EU's Middle East
envoy. The Spanish speak frequently of the 10-year
commemoration of the EU's Barcelona Process, which will be
held in Barcelona this October. In his speech at the 2004
UNGA, Zapatero announced a concept he called "The Alliance of
Civilizations," a sketchy plan dealing with relations between
the Islamic world and the West that remains very much
undefined. We have told the Zapatero government that while
we look forward to learning more about the Alliance of
Civilizations, it is important that proposals for greater
understanding and spreading democracy in the region are
consistent with other initiatives, such as the G-8's Broader
Middle East and North Africa Initiative.

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ECONOMIC AND COMMERCIAL RELATIONS
---------------------------------

¶13. (C) We have important commercial interests in Spain as
well, with a business community that is staunchly supportive
of U.S. investment and concerned that Zapatero's policies
will lead to a decrease in U.S. business involvement. At
every opportunity, we work to encourage a business-friendly
environment in Spain.

¶14. (U) The GOS cooperates with the U.S. on terrorism finance
issues. Working-level contacts have repeatedly sought
information on pre-notifications. The GOS checks for assets
upon receiving information from us, but to date has not found
such assets. The Interior Ministry is working on
implementing regulations to a terrorism finance law that will
enhance the government,s ability to freeze assets.

¶15. (U) Spain is an Airbus stakeholder. Recently, Iberia
chose Airbus to replace a number of medium-sized jets despite
extensive lobbying by the Embassy on Boeing,s behalf. With
respect to the Airbus-Boeing subsidies dispute, Spanish
interlocutors indicate that Spain lets the Commission
formulate policy. Spain was pleased that the rice issue was
recently satisfactorily resolved as the retaliation
contemplated by the U.S. would have struck Spanish olive,
clementine, and saffron exports particularly hard. Spain
voted in favor of extending the reprieve on implementing the
EU,s wood packing directive.

¶16. (U) Spain is not on the Special 301 list. However, we
are working to improve respect for IPR in Spain. The GOS has
agreed to participate in a U.S.-Spain IPR roundtable
scheduled for the end of June or September. Commerce
Assistant Secretary Lash will lead the U.S. delegation at
this event. We are also working on agricultural
biotechnology issues in Spain. The previous government was
largely positive with respect to the technology. The current
government,s environment minister is opposed. In particular,
we are seeking to obtain approval for Monsanto's NK 603
variety, favorable Spanish votes on Commission proposals for
biotechnology approvals (the Zapatero government has
abstained on four important votes) and a rational
co-existence decree.

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YOUR VISIT WILL HELP KEEP RELATIONS ON POSITIVE COURSE
--------------------------------------------- ---------

¶17. (C) The USG will not re-establish with Zapatero the deep
and close relationship we had with the Aznar administration.
However, we are currently moving towards a more productive
course that achieves USG interests in Spain and in other
regions. Your visit will help us emphasize to the Zapatero
government and the Spanish people that despite our
differences with the Zapatero administration, we continue to
consider Spain a close and important ally and, provided Spain
works with us, we can move ahead together on robust bilateral
and multilateral agendas.

MANZANARES