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

UNCLAS SECTION 01 OF 03 MADRID 003701 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON SMIG MO SP
SUBJECT: SPAIN'S ILLEGAL IMMIGRATION CHALLENGE 
 
REF: MADRID 2418 
 
¶1. (U) Summary.  The GOS has announced a plan to revise its 
Law on Foreign Aliens (Ley de Extranjeria) to grant legal 
status to undocumented immigrants who can demonstrate that 
they have worked a minimum of one year in Spain. The GOS is 
acting in response to a massive increase in illegal 
immigration to Spain (mainly from Morocco) since 2003.  The 
plan would require immigrants to declare their illegal status 
and identify their employers and make businesses pay 
retroactive social security benefits for the illegal 
immigrants that they employ.  Officials say their plan would 
resolve immigration problems created by the former Popular 
Party (PP) government and fulfill the Socialist party's 
(PSOE) campaign promise to improve Spain's labor market. 
Opponents contend that the plan excludes the majority of 
temporary out-of-status workers and will instead increase 
illegal immigration and fraud in Spain and in other parts of 
the European Union.  The GOS expects to reach quick consensus 
on the plan; however, criticism from immigrant groups, 
businesses, labor, and the EU could unravel the plan before 
it goes to congress in October.  End Summary. 
 
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Spain:  The Immigration Challenge 
--------------------------------- 
 
Illegal Immigrant flow 
---------------------- 
 
¶2. (U) Immigration poses a challenge to Spain's efforts to 
secure its borders, curb underground economic activity, and 
formulate policy to meet the demands of thousands of 
undocumented workers already in Spain.  The government 
estimates that there are approximately 2.7 million immigrants 
in Spain including as many as one million illegal immigrants. 
 Immigrants now make up approximately 6.2 percent of Spain's 
total population of 42.7 million, but according to EU 
statistics, last year Spain received the largest number of 
new immigrants in Europe, 594,300 or 23 percent of all new 
immigrants to the European Union.  The majority of new 
immigrants entered illegally through the Spanish coastal 
cities of Cadiz, Malaga, and Almeria, the Canary Islands, or 
by crossing from Morocco into the Spanish enclaves of Ceuta 
and Melilla. 
 
¶3. (U) The Spanish National Guard reported in August that it 
interdicted 412 illegal immigrant boats (called "pateras" in 
Spanish).  These interdictions led to the arrest of more than 
10,042 illegal immigrants, a nine percent decline in the 
number arrested in 2003 according to officials.  Of the total 
number of persons arrested, there were 6,256 Moroccans, 1,500 
Malians, 900 Gambians; others were nationals of West African 
and Latin American countries, notably Honduras.  Officials 
rescued 171 illegal immigrants, while fifty-three persons 
drowned and 35 "disappeared" in Mediterranean waters.   The 
arrival of numerous pateras this summer made national news 
headlines and raised concerns over the status of 
undocumented, illegal immigrant workers in Spain as well as 
the porous nature of Spain's southern border. 
 
Labor & Economic issues 
----------------------- 
 
¶4. (U) There are 800,000 to one million illegal immigrants on 
temporary work contracts in Spain, according to statistics 
from the Spanish Ministry of Labor and Social Affairs.  The 
labor ministry also estimates that immigrants filled four out 
of ten new jobs created in Spain in 2003.  The most recent 
data on immigrant employment from 2003 shows that immigrants 
from Colombia and Ecuador held 40.6 percent of all temporary 
contract jobs while the percentage of temporary immigrant 
workers from Eastern Europe, Asia, and other EU countries has 
declined. 
 
¶5. (U) Immigrant workers support a massive informal or 
"underground" economy according to recent economic studies 
(reftel).  Economists suggest that informal economic activity 
accounts for 23 percent of Spain's GDP and approximately 120 
billion euros (USD 143 billion) in unreported economic 
earnings.  They suggest that the participation of illegal 
immigrant workers in the underground economy has increased 
substantially since 2001.   Reducing unreported economic 
activity and employment of illegal immigrants is a key 
concern for the GOS because of its efforts to link 
immigration policy to improvements in the labor and economic 
conditions. 
 
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GOS Policy 
---------- 
 
Under the former PP government 
------------------------------ 
 
¶6. (U) In response to the challenge of illegal immigration 
and undocumented immigrant workers, the former Popular Party 
(PP) government passed measures under Spain's Law on Foreign 
Aliens (Ley de Extranjeria) before leaving office that 
required undocumented immigrants to have three years of 
residence in Spain before they could obtain legal resident 
status.  The measures also restricted immigrants from joining 
political parties and labor unions.  In recent months, 
immigrant groups in Madrid and Barcelona have protested the 
law arguing that it has left nearly 100,000 immigrants 
without work permits and denied them the right to free 
association or the ability to negotiate better work 
contracts.  They demanded that the new Socialist government 
reject the PP measures by rescinding the Law on Foreign 
Aliens and expediting work visas that would give legal status 
in Spain to all undocumented workers and their family members. 
 
The Socialists, new proposal 
----------------------------- 
 
¶7.  (U) Developing a policy to integrate immigrants into the 
labor market and manage the flow of illegal immigrants were 
priorities of the Spanish Socialist's (PSOE) electoral 
program.  On September 14, Spain's Minister of Labor and 
Social Affairs, Jesus Caldera, formally presented the GOS's 
plan on illegal immigration to a congressional committee on 
economic and social affairs.   Caldera proposed granting 
legal status only to those undocumented immigrants who 
demonstrated work ties to Spain for a minimum of one year and 
physically resided in Spain for a yet-undetermined time 
period. 
 
¶8.  (U) The new proposal involves a one-time immigration 
process, which Caldera called "normalization," that would 
result in renewable, one year work permits for those 
undocumented immigrants currently in Spain who met labor 
legislation requirements.  Under the proposed requirements, 
illegal immigrants would have to reveal their employers 
voluntarily and prove that they had been working for them 
illegally for a minimum of one year to receive work permits 
and temporary resident status.  Companies guilty of hiring 
illegal immigrants would be required to pay social security 
taxes retroactively for the immigrant's period of employment. 
 Newly arrived immigrants, or those that lack employment 
history or domiciles (so-called "clandestine" immigrants) 
would not be eligible for normalization, according to 
Minister Caldera.  Caldera issued a report to the 
congressional committee outlining the new policy and said 
that proposal would be open to debate by all parliamentary 
groups, political parties, businesses, and labor unions.  He 
was optimistic that the new plan would be approved by 
congress in October. 
 
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Criticisms 
---------- 
 
¶9.  (U) The GOS's new plan has been sharply criticized by the 
opposition Popular Party and was met with mixed reviews by 
labor union leaders as well as the EU Immigration Commission. 
 PP Secretary General Mariano Rajoy said the plan amounted to 
"papers for all" illegal immigrants and argued that the 
proposal would benefit clandestine immigrants and criminal 
mafias.  PP immigration spokesperson Angeles Munoz reiterated 
the charge that the government's proposal was another attempt 
by the ruling Socialist party to "radically change the 
policies put in place by the PP."   Munoz said the 
government's normalization policy would exclude the majority 
of out-of-status contract workers because only 8% of such 
workers have contracts that last more than a year. 
 
¶10. (U) Some labor unions and immigrant associations have 
also questioned the normalization criteria in Caldera's 
proposal.  Immigration spokesperson for the Commissiones 
Obreras (CCOO) labor union Lola Granados added that most 
agriculture, hotel, and domestic services require contracts 
that last less then a year, so the proposal's one-year work 
requirement would not help many immigrant workers in these 
industries.  A spokesperson for the Association of Moroccan 
Immigrant Workers in Spain (ATIME) rejected the one-year 
formula and the requirement to reveal illegal hiring 
practices.  ATIME said the government should have consulted 
with immigrant groups to establish consensus on the criteria 
for normalization before they announced the plan in congress. 
 The General Worker's Union (UGT) expressed the concern that 
any changes in Spain immigration policy that did not 
strengthen immigrants' labor rights would give immigrants 
false expectations. 
 
¶11. (U) Vice President of the European Commission on 
Immigration, Loyola de Palacio, expressed the EU's concern in 
August that Spain's proposal would increase illegal 
immigration to other regions of the EU.  Palacio commented 
that under the new Spanish proposal, illegal immigrants in 
Spain could use temporary work status to emigrate to other 
parts of Europe Union where they would face equally uncertain 
job prospects.  This concern was reiterated by the Catalan 
Convergence and Union (CiU) party, which suggested that Spain 
also impose measures to prevent illegal immigrants from using 
their temporary residence status under the normalization plan 
to emigrate to other European countries, specifically those 
within the Schengen visa space. 
 
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Comment 
-------- 
 
¶12. (U) As the largest net recipient of immigrants in Europe, 
Spain is the gateway into Europe for immigrants from North 
Africa and Latin America.  Although the GOS contends that its 
proposed plan will resolve the backlog of undocumented 
immigrant cases and curb illegal employment in Spain's 
underground economy, the plan does not appear reasonable for 
businesses, labor unions, and illegal immigrants alike.  The 
new measures would penalize businesses for hiring illegal 
workers by making them pay retroactive social security tax 
and may cause illegal immigrants to lose their jobs if they 
inform on their employers.  The proposal also fails to 
address labor concerns on whether illegal immigrants can join 
unions or protect their employment status if they hold 
contracts for less than a year.  In addition, the GOS 
proposal could create an unintended pull effect of new 
immigrants into Spain and create problems with the EU on 
coordinating common immigration policies.  The GOS proposal 
in its present form may not survive a robust domestic debate 
among businesses, unions, and immigrants groups and could 
generate greater uncertainty about the direction of Spain's 
immigration policies within the European Union. 
MANZANARES