VZCZCXRO6372
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHMD #0564/02 0861219
ZNR UUUUU ZZH
R 271219Z MAR 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 2164
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 2571

UNCLAS SECTION 02 OF 02 MADRID 000564 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EUR/WE 
 
E.O. 12958: N/A 
TAGS: BEXP EAGR EAIR ECON EFIN EIND ENRG ETRD KNNP
SENV, SOCI, TBIO, SP, EINV, UK 
SUBJECT: MADRID WEEKLY ECON/AG/COMMERCIAL UPDATE REPORT 
 
MADRID 00000564  001.4 OF 002 
 
 
EAGR/TBIO: The Political divide of biothtechnology 
ENRG: Renewables only at El Hierro Island 
ENRG/KNNP: Zapatero says NO to Nukes 
EINV/BEXP: Customer Focus Puts Spanish Banks in the lead 
SOCI/SMIG: Foreigners in Spain 1 out of 6 ratio 
EAID: Iraq Reconstruction Monies-Where Are They? 
EAIR: Boeing business boom in Spain 
 
 
//BT CORN MISUNDERSTOOD 
 
1 (U) The European Commission's (EC) de facto 
agriculture-biotechnology approval moratorium has 
precipitated a political divide among corn farmers in Spain 
regarding the desirability of agriculture biotechnology.  By 
1997, the first year of the moratorium, the EC had approved 
only one line of biotechnology (bt) corn events, corn-borer 
resistant seed varieties.  In Spanish regions where 
corn-borer infestations are important, Spanish farmers have 
embraced bt corn, planting almost all of the infested area 
(60,000 hectares) with bt seed.  On the remaining 340,000 
hectares planted with corn in Spain, weeds are a problem, but 
since weed-killer-resistant (Roundup Ready) corn has not been 
approved (the moratorium) Spanish corn farmers don't 
understand its benefit.  Hence the political divide in Spain 
where farmers who have access to, and can benefit from bt 
corn, embrace it, while many of the farmers who do not have 
access to bt corn seed developed to facilitate the 
elimination of weeds (Roundup Ready), oppose the continued 
deployment of agriculture biotechnology in Spain. 
 
SPAIN PLANS FIRST RENEWABLES ONLY ISLAND 
 
¶2. (U) The Spanish Government announced March 20 that "El 
Hierro," one of the islands that makes up the Canary Island 
chain, would become the first island in the world where 100 
percent of electricity used would come from renewable energy 
sources.  The 278 square hectare, 10,500 inhabitant island, 
which is a UN World Biosphere reserve, will receive a 54 
million euro investment to construct a mini-hydro and wind 
power complex that will generate 20 megawatts of power.  35 
million euros of the 54 million euro cost will be provided by 
Spain's Industry Ministry.  The renewable systems will save 
6,000 tons of diesel fuel annually (which is the equivalent 
of 40,000 barrels of oil and which costs two million euros a 
year) and will prevent the annual emission of 18,700 tons of 
CO2, 100 tons of sulfur dioxide, and 400 tons of nitrogen. 
The systems are planned to come on line in 2009. 
 
ZAPATERO REITERATES ANTI-NUCLEAR ENERGY STANCE 
 
¶3. (SBU) Prime Minister Zapatero is widely viewed as the most 
anti-nuclear member of the Spanish cabinet.  A few times each 
year during the three years of his government, Zapatero has 
felt compelled to reiterate his support for the Socialist 
Party's 2004 campaign promise to gradually close down Spain's 
remaining nuclear reactors.  He feels compelled to do so 
because leading figures from across the political spectrum 
continue to voice support for nuclear energy as a way to 
reduce dependence on foreign energy sources and to attack 
climate change.  Zapatero also must be aware that many 
leading members of his government voice private support for 
reconsidering the PSOE's anti-nuclear stance.  Zapatero's 
most recent restatement of his anti-nuclear views came on 14 
March, when he told the Spanish Congress that his government 
would present, by the end of its term (no later than March 
2008), a plan to implement its campaign promise to close down 
all Spanish reactors.  In his remarks, Zapatero also 
reiterated his support for increasing the amount of Spanish 
energy coming from renewable sources.  No one appears to have 
pointed out to the Prime Minister that his anti-nuclear 
stance will help guarantee that Spain's rate of dependence on 
foreign energy sources will continue to be one of the highest 
in Europe (it is currently over 80 percent) for the 
foreseeable future. 
 
SPANISH BANKS AMONG THE MOST EFFICIENT IN THE WORLD 
 
¶4. (U) The average cost/income ratio for the largest three 
Spanish banks was 43% in 2006.  That compared with an average 
of 58% for three of the U.S.,s biggest banks.    The lower 
the cost/income ratio the better as it costs less to produce 
income.  Why is Spanish banking so efficient?  Forced 
restructuring in the 1970s led to enormous efficiency gains. 
The Spaniards have invested heavily in technology.  The 
bigger banks, market shares allows for economies of scale. 
Cost controls and emphasis on sales are intense.  The Spanish 
emphasis on the customer, as opposed to the Anglo-Saxon 
 
MADRID 00000564  002.2 OF 002 
 
 
product-centered approach, seems to have worked for the 
Spaniards.  (IHT, March 20, 2007) 
 
ONE MILLION MADRID AREA RESIDENTS ARE FOREIGN BORN 
 
¶5. (U) The Madrid regional government reported March 14 that 
foreigners represent almost one out of six residents of the 
Madrid region.  The report said that the Madrid region 
population reached 6.3 million in 2006 and that just over one 
million of these residents was foreign born.  The foreign 
population grew 25 percent during the course of 2006 (from 
just over 800,000 to just over one million). Ecuadorians 
represented the largest foreign group (16.6 percent) followed 
by Romanians (15.5 percent), Moroccans (8.3 percent), 
Colombians (7.7 percent) and Bolivians (5.3 percent).  As for 
demographics, almost one half of the one million foreign born 
residents of the Madrid region are between the ages of 25-35. 
 
 
MADRID DONOR'S CONFERENCE PLEDGE ANNOUNCEMENT 
 
¶6. (U) The Spanish Agency for International Cooperation 
(AECI) recently released information regarding the status of 
Spain's 300 million USD pledge to Iraq made at the October 
2003 Madrid Donors' Conference.  According to AECI, 148.5 
million USD out of the 300 million pledge was obligated by 
the Aznar Government in 2003 and 2004.  The Zapatero 
Government obligated an additional 48 million between 2005 
and 2007.  39.6 million of the 48 million was routed through 
UNDP/IRFFI (22.2 million to the infrastructure account and 
17.4 million to the governability account), seven million was 
obligated directly by AECI (4.2 million in 2005, 1.9 million 
in 2006 and 900,000 in 2007), one million was obligated via 
NATO (for training Iraqi police), and 400,000 was spent for 
non-NATO training.  According to AECI figures, 103.3  million 
USD of the original 300 million pledge remains unobligated. 
Media quotes AECI sources as saying that the remaining monies 
have not been obligated because ongoing sectarian violence 
makes effective reconstruction efforts impossible.  Media 
also reports that the remaining 103.3 million dollars will be 
spent via further contributions to UNDP/IRFFI (28.3 million) 
and soft loans (75 million).  It is worth noting that these 
figures do not include either the 764 million USD worth of 
Iraqi Government debt written off by Spain or the 2.5 million 
USD in development assistance provided to Iraq by Spanish 
autonomous regions. 
 
BOEING PROJECTS 36 BILLION USD MARKET FOR NEW PLANES IN SPAIN 
 
¶7. (U) According to the recently released Boeing Current 
Market Outlook, Spain will order 410 new Boeing airplanes 
over the next 20 years.  Boeing's annual forecast estimated 
that the airplanes will amount to approximately 36 billion 
USD in commercial sales.  Boeing estimates that the Boeing 
737 range will account for 70 percent of all jetliners 
delivered to Spanish airlines.  Fifteen to sixteen percent 
will be twin-aisle airplanes such as the Boeing 777 and 787. 
Eleven percent will be smaller regional jets, and the 
remaining three to four percent will be of the Boeing 747 
size range.  Boeing projections assume an annual 4.5 percent 
increase in traffic on transatlantic routes between Europe 
and North America. 
Aguirre