VZCZCXRO4229
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHMD #3037/01 3471608
ZNR UUUUU ZZH
R 131608Z DEC 06
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 1448
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 2286

UNCLAS SECTION 01 OF 02 MADRID 003037 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EUR/WE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR EAGR TBIO SP EINV EWWT
SUBJECT: MADRID WEEKLY ECON/AG/COMMERCIAL UPDATE REPORT 
 
 
MADRID 00003037  001.2 OF 002 
 
 
¶1. EWWT: Prestige wreck leaking fuel 
¶2. ECON: Spain's economic situation 
¶3. EUR/ERA Deputy Director for Econ visit to Madrid 
¶4. EAGR: Spanish coexistence decree update 
¶5. EAGR: Water levels/drought conditions in Spain 
 
Prestige May Be Leaking Fuel Again: 
 
¶1. (U) The Spanish Oceanographic Institute (IEO) mounted an 
early November expedition to the site of the sunken wreckage 
of the Prestige, the oil tanker carrying 37,500 tons of fuel 
that sank off the coast of Galicia on November 19, 2002, 
resulting in the largest oil spill in Spanish history.  The 
IEO confirmed reports that the Prestige was indeed leaking 
oil and recommended that these leaks be "controlled."  They 
did not recommend the removal of the remaining 700 tons of 
fuel left in the Prestige's tanks following earlier efforts 
to mitigate the disaster.  As a result of the IEO's 
recommendations, Spanish Vice President Maria Teresa 
Fernandez de la Vega announced December 2 that the GOS would 
contract with Spanish oil giant REPSOL to send technicians to 
the site of the wreckage, 250 kilometers off the Galician 
coastline, in early 2007 to ascertain the extent of the 
problem.  She said the possibility of a major leakage of oil 
was "remote" and the leaks "would not have an impact on the 
maritime or coastal ecosystems" of Galicia.  Some scientists 
believe that oil-eating bacteria that was deposited in the 
tanks during earlier mitigation efforts and was supposed to 
slowly eliminate the petroleum, has instead acted as a 
corrosive and has been destroying the tanks as well, thus 
producing the leaks. 
 
One in five living below poverty level in Spain 
 
¶2. (U) According to a recent report by Spain,s National 
Statistics Institute, 19.8 percent of the country,s 
population was living below the poverty line in 2005.  The 
report was based on a survey of living conditions that will 
be included in a European Union study to be released in 2007. 
 Drawing on data from 2005, the Institute said the average 
household net income was 22,418 euro (29,798 USD at 1.327 
euro/dollar), while for individuals it was 7,925 euro (10,516 
USD).  Of those who lived under the poverty threshold, which 
was defined as an annual net income of 6,347 euro (8,422 USD) 
for a household and 9,520 euro (12,633 euro) for an 
individual, 47.3 percent were over 65 years of age and living 
alone, while 36.9 percent were single parents with at least 
one child.  The report also noted that 40.4 percent of 
households are unable to afford an annual one week vacation 
away from home. 
 
¶3.  (U) The results of the study are surprising given that 
Spain has had one of the fastest growing economies in the 
euro zone, with continuous growth for over a decade. 
However, this is primarily the result of strong domestic 
demand driven by population (immigration) growth, as well as 
robust growth in the construction sector.  Another report by 
the National Statistics Institute noted that immigrants have 
also played an increasing role in the growing economy, thus 
this segment of the population may well make up a significant 
part of those living below the poverty line.  The autonomous 
communities with the lowest family income are Extremadura and 
Castilla-La Mancha.  The autonomous communities of Navarra 
and Madrid surpass the national average by 20 percent. 
 
EUR/ERA Deputy Director for Economic Affairs visits Madrid 
 
¶4. (U) Post hosted the visit of EUR/ERA Deputy Director for 
Economic Affairs Eric Luftman on Monday, November 27. 
Luftman met with Felipe de la Morena, Deputy Director for 
Bilateral Economic Relations with Developing Countries 
(non-OECD) at the Ministry of Foreign Affairs.  In a cordial 
meeting, de la Morena discussed Spain,s increased role in 
Latin America, energy policy, and Plan Africa, a development 
plan geared to stem the flow of immigration.  Luftman also 
met with Cristina Serrano, Deputy Director for Economic and 
Financial Affairs for the European Union, and with Eleutorio 
Alcocer, Director of Coordination and Legal Communitarian 
Affairs at the MFA.  The latter two meetings focused on 
Spain,s interaction within the EU on the implementation of 
economic-related EU directives. 
 
Agriculture: 
 
¶5.  (U) The Spanish coexistence decree (Decree), previously 
expected in final form this calendar year, appears to be on 
hold again.  This time the delay is reported to be a new 
disagreement between the Ministry of the Environment (MOE) 
and the Ministry of Agriculture (MOA) over the perceived 
 
MADRID 00003037  002.2 OF 002 
 
 
terms that led to the current Decree, with its exorbitant 
220-meter buffer zone.  We were told in July, by one of the 
Ambassador's contacts within the Spanish President's inner 
circle, that the Decree could not be changed/influenced by us 
(the U.S. Government) or by anyone else, and that it would be 
promulgated yet during 2006.  However, our contacts now tell 
us that the Decree will not see the light-of-day until 
February 2007 at the earliest, which may open the window for 
biotechnology corn production for the tenth straight year 
with the planting of next year's crop in February 2007. 
 
¶6. (U) While we are not certain of the exact points of 
discrepancy between the agencies (some suggests that the MOE 
now wants a 400 meter buffer zone), we do know that we have 
seen an upsurge in anti-biotechnology activity in recent 
weeks.  It began with an article in El Pais, one of Spain's 
most-read dailies.  The article has since been reproduced in 
press all over Europe, including in the paper and online 
versions of Agri-Net/Agri Europe.  In the original article, 
anti-biotechnology activists/corn producers claim that 
biotechnology corn is destroying organic corn production in 
Spain, because of cross-pollination said to be occurring even 
within the currently recommended 50-meter buffer zone. 
 
Drought Fears Washed Away: 
 
¶7. (U) After suffering two years of severe drought and water 
use restrictions, record fall rains throughout Spain (the 
second wettest autumn since 1990) have brought relief to 
most, but not all, of the affected regions.  During the 
course of the last week, total Spanish water reserves 
surpassed the 10 year average for this time of the year. 
Nationwide, dams were at 54.7 percent of their capacity in 
early December, 11 percentage points higher than at this time 
last year and 16 points higher than late September 2005 (when 
water levels reached the lowest point recorded since the 1995 
drought).  In the Madrid region, water reserves now stand at 
72 percent above levels measured at this time in 2005.   As a 
result of the rains, government authorities have lifted most 
water use restrictions throughout Spain (which had generally 
focused on water used for crop irrigation).  Nonetheless, 
water reserves in a few areas in the southern region of 
Andalucia (e.g., the Jucar and Segura river-based systems) 
are still dangerously low. 
AGUIRRE