VZCZCXRO8937
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHMD #0510/01 0781144
ZNR UUUUU ZZH
R 191144Z MAR 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 2114
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 2539

UNCLAS SECTION 01 OF 02 MADRID 000510 
 
SIPDIS 
 
SIPDIS 
 
EUR/WE 
 
E.O. 12958: N/A 
TAGS: EAGR EIND ECON EFIN ETRD SENV TBIO SP EINV UK
SUBJECT: MADRID WEEKLY ECON/AG/COMMERCIAL UPDATE REPORT 
 
 
MADRID 00000510  001.2 OF 002 
 
 
EIND: Tourism in Spain still going Strong 
EAGR/TBIO: Negative Press for Biotechnology 
ELTN: Spain to Morocco via rail link 
SENV: Climate Change Ambassador soon to be named 
EINV: Spaniard makes Forbes top 10 list 
EINV: Breakfast with Latin America investors 
 
 
TOURISM REMAINS STRONG 
 
¶1. (U) Visits to Spain in January 2007, primarily from 
Britain and Germany, but increasingly from France, Italy, and 
Scandinavia, were up 4 percent over January 2006.  According 
to the Ministry of Industry, Trade, and Tourism, tourism 
volume to the Canary Islands fell slightly, but increased in 
Catalonia and the Basque Country.  Spain is the world's 
second-largest tourist destination, after France. (Ministry 
of Industry, Trade and Tourism) 
 
BAD NEWS FOR BIOTECHNOLOGY'S FUTURE 
 
¶2. (U) During the last week of February, we noted an increase 
in the number of negative press references regarding 
agriculture biotechnology from representatives of the Spanish 
Ministry of Agriculture (MOA), and many of them attributed to 
MOA Minister Elena Espinosa.  Given that Spain's coexistence 
decree (Decree) is still being debated, we were concerned 
that Minister Espinosa may have been "setting up" to announce 
the Decree and that it might contain new provisions 
(reportedly demanded by the Ministry of the Environment 
(MOE)) that could greatly reduce or eliminate the use of 
agriculture biotechnology in Spain.  In our review of the 
press articles, where Minister Epinosa responded negatively 
to questions about biotechnology, it appears that her 
objective was to promote the MOA's new 35.8 million Euro plan 
for organic agriculture, and not to bash biotechnology.  Our 
contacts at the MOA continue to insist that while this 
Government (and Minister Espinosa, in particular) is not 
supportive of agriculture biotechnology, the MOA will not 
cede to the demands of the MOE regarding the terms of the 
Decree, which could preclude future agriculture biotechnology 
use in Spain. 
 
PM ZAPATERO ANNOUNCES RAIL LINK FROM SPAIN TO MOROCCO 
 
¶3. (U) Spanish Prime Minister Jose Luis Rodriguez Zapatero 
announced on March 6 an ambitious project to link Spain and 
Morocco via a rail link under the Gibraltar Strait.  Zapatero 
has pledged to rally European Union support for the plan and 
called it a "historic project" that would "change Africa and 
Europe, and more particularly Morocco and Spain."  The plan 
calls for a 39 km rail tunnel to be dug under the seabed, at 
an estimated cost of between seven and 17 billion USD. 
Zapatero acknowledged that the project will require major 
financial backing and EU support before it will proceed. 
Other EU member states have already questioned the wisdom of 
such a plan given the current flow of illegal immigrants into 
the EU from Morocco via Spain. 
 
 SPAIN TO NAME CLIMATE CHANGE AMBASSADOR 
 
¶4. (U) Foreign Minister Moratinos announced March 8 that the 
Spanish Government would "soon" name a "Special Ambassador" 
for Climate Change.  Moratinos, noting that climate change 
requires an "agile and committed multilateral response," 
admitted that Spain is "still far" from meetings it Kyoto 
Protocol objectives.  (Note: Kyoto called for Spain to have 
greenhouse gas emissions levels in 2012 of no more than 15 
percent above 1990 levels.  In 2005, Spanish emissions levels 
were 53 percent above 1990 levels.  End Note.)  Media has 
speculated that one possible candidate for the position is 
Spanish Ambassador to Mexico Cristina Barrios.  (Note: Just 
before this cable was transmitted, the Spanish cabinet 
announced that Spanish Ambassador to Mexico Cristina Barrios 
would indeed get the nod.) 
 
SPANIARD MAKES FORBES TOP TEN RICHEST PEOPLE IN THE WORLD 
 
¶5. (U) Amacio Ortega is ranked the number eight richest 
person on the planet with an estimated fortune of USD 24 
billion.  He is the owner of the Galicia-based textile retail 
group, Inditex.  Ortega is pretty low profile in Spain, 
although everybody knows who he is.  Inditex's most 
well-known brand is Zara, which is becoming more and more 
popular around the world.  It can now be found, for instance, 
on the best streets of New York.  Zara's basic business model 
is to make affordable stylish clothing for women and men 
(although women tend to be the most addicted Zara shoppers). 
The company relies on repeat shoppers who come back for the 
latest at a decent price.  The group has a very sophisticated 
 
MADRID 00000510  002.2 OF 002 
 
 
information technology system that allows it to figure out 
quickly what people are buying and then make it available. 
There are 19 more Spaniards in the top 717 of the richest 
people on earth, mostly in construction. (El Pais, 5/10/07) 
 
 
AMBASSADOR HOSTS 5/9/07 BREAKFAST FOR SPANISH COMPANIES WITH 
MAJOR INVESTMENTS IN LATIN AMERICA 
 
¶6. (U) We thought it would be a good idea to solicit ideas 
from Spanish businesses with major stakes in Latin America. 
The date of the breakfast turned out to be timely given the 
President's trip to Latin America.  Repsol, BBVA, Santander, 
FCC, OHL, ACS, Endesa and Iberdrola sent their CEO, deputy or 
senior executives to the event.  The executives were pleased 
that the President was traveling to the region in order to 
dispel the perception that after 9/11, the U.S. lost interest 
in Latin America.  Peru's Alan Garcia was something of a 
pleasant surprise - that country was key in their opinion in 
countering the region's populist trend.  Spain could 
contribute by showing how a modern state functions, 
especially with respect to creating a modern tax collection 
system.  The development of a bigger middle class was 
crucial.  The U.S. needs to continue to push free trade. 
Some Latin American leaders have made extraordinary efforts 
to promote free trade, for instance Peru's Alan Garcia.  The 
executives all agreed that Mexico had been very lucky in 
electing President Calderon.  However, the  Santander 
representative, himself Mexican, said that this was the "last 
chance" for a free market oriented government to deliver for 
Mexico's poorer people.  It if did not, Mexico would 
definitely turn left in five and a half years.  While Lopez 
Obrador may be politically moribund, his ideas have not died. 
 (Comment: Perhaps the most striking thing about this 
essentially conservative business group was that there was a 
broad consensus that if free market economics in Latin 
America are to continue to thrive, the region must get 
governance issues right.  The group was convinced that 
Spain's successful transition over the last thirty years from 
a country with a protectionist economic structure with a low 
tax take to a country with open markets, a moderate (by OECD 
standards) tax take and efficient government was a model 
worth emulating.) 
Aguirre