VZCZCXRO4447
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHMD #0692/01 1031632
ZNR UUUUU ZZH
R 131632Z APR 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 2281
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 2620

UNCLAS SECTION 01 OF 02 MADRID 000692 
 
SIPDIS 
 
SIPDIS 
 
EUR/WE 
 
E.O. 12958: N/A 
TAGS: BEXP EAGR EAIR ECON EFIN EIND ETRD TBIO SP
EINV, UK 
SUBJECT: MADRID WEEKLY ECON/AG/COMMERCIAL UPDATE REPORT 
 
 
MADRID 00000692  001.2 OF 002 
 
 
EINV: Spain seeking larger IMF quota 
ECON/EINV: Projected growth for Spain up by 3.6% 
BEXP/TBIO/BTIO: U.S. Biotechnology corn exports down 
EIND: Residential Realestate finally slowing down? 
EINV/ELAB: US companies among top 10 best places to work 
 
MINISTER SOLBES TRAVELING TO U.S. IN HOPES OF AN IMF INCREASE 
 
¶1. (U) Finance Minister Solbes, Central Bank Chief Ordonez 
and Secretary of State for Economy Vergara traveling to 
Washington this weekend to campaign for bigger IMF Quota: 
Spain's IMF quota share is 1.41%, below Belgium's 2.13%.  The 
Spaniards are aware that China, Mexico, Russia, Turkey and 
Brazil will probably get bigger quotas this year; Spain 
intends to argue for an increase with the hope of getting it 
in the fall of 2008. (Comment: Increasing Spain's IMF quota 
has been a GOS interest for some time.) (Expansion, April 12, 
2007) 
 
IMF FORECASTS 3.6% GROWTH FOR SPAIN IN 2007 AND 3.4% GROWTH 
IN 2008 
 
¶2. (U) This compares with a projected Eurozone average growth 
rate of 2.3% in 2007 and 2.3% in 2008.  The U.S. is projected 
to grow at 2.2% in 2007 and 2.8% in 2008.  (Comment: This 
basically tracks with other forecasts and will probably mean 
the legislative elections in Spain, which must be held by 
March next year at the latest, will mostly be fought over 
issues other than economics.) (El Pais, April 12, 2007) 
 
BUT: Relatively Low Investment in Training/Education 
(including receptivity to foreign students)/Research must 
eventually lead to lower growth:  The following numbers are 
illustrative of the challenge Spain faces. 
 
Investment in    Increase in number   Levels of    Number of 
Research as      of university        Permanent    foreign 
% of GDP         graduates            Training     students 
                 2005-2015                         in 2004 in 
% 
 
 
SPAIN      3%   32% decrease           40           2% 
 
EUROZONE   4%   Increase in            50           France, 
                many EU nations                     Germany, 
                                                    UK 10-13% 
 
U.S.       7%   12% increase                        22% 
 
There is a lot of talk about upgrading skills and technology 
in Spain, but the country is still below the Eurozone average 
and way below the U.S. averages. (El Pais, April 12, 2007) 
 
FRANCE VS. U.S. FOR BIOTECH CORN MARKET 
 
¶2. (U) U.S. seed corn producers/exporters appear to be losing 
their ability to export to Spain, the rest of Europe, and to 
other countries as well.  Reportedly, a decisive factor 
propelling biotechnology seed production and import decisions 
is concern about the potential for adventitious genetic 
material in U.S.- produced seed, and its associated 
liabilities.  According to data from the Global Trade Atlas, 
world-wide U.S. seed corn exports have declined from 200,000 
tons in 2002 to 50,000 tons in 2006.  Reportedly, one of the 
biotechnology seed producing companies that services the 
Spanish market is moving/has moved its biotechnology seed 
production (for seed used in Spain and likely for the rest of 
Europe) from the United States to France, because their 
clients are wary of seed produced in the United States due to 
a perceived greater risk of adventitious genetic material 
presence from non-European approved biotechnology seed corn. 
 
COMMERCIAL REAL ESTATE INVESTMENT UP AS RESIDENTIAL SHOWS 
SIGNS OF SLOWING DOWN 
 
¶3. (U) Companies such as Savills PLC, Immobiliaria Chamartin 
(Morgan Stanley Real Estate owns 16% of the firm), 
Barcelona-based Immobiliaria Colonial S.A., Grupo Inmocaral 
and others report increasing their exposure in the commercial 
real estate sector.  Last year, Spain built around 818,000 
homes, compared with roughly 213,000 in the UK (Britain has 
60.6 million people; Spain has about 44 million inhabitants). 
 Clearly, this pace of residential construction cannot 
continue indefinitely.  The OECD reports that homes could be 
20%-30% overvalued.  Spain's homeownership rate is 85%, 
compared with 71% in the UK, 68% in France, 43% in Germany 
and 69% in the U.S.  Observers are not forecasting a hard 
landing for the residential housing market (yet) but 
 
MADRID 00000692  002.2 OF 002 
 
 
certainly a slowdown.  (Comment: As long as growth in Spain 
is relatively high, focusing on the commercial real estate 
market makes sense.  Spanish real estate firms will probably 
also try to hedge risk by expanding overseas.) (Wall Street 
Journal, April 11, 2007) 
 
IS YOUR COMPANY AMONG THE BEST PLACES TO WORK? 
 
¶4. (U) For the fifth consecutive year "Great Place to Work 
Institute" has conducted a survey of 130,000 workers from 200 
companies asking them to rank their bosses, workplace, and 
companions in search of the top 30 best companies to work for 
in Spain.  American businesses are among the top ten (listed 
in ranking order): Microsoft, Lilly (Pharmaceuticals), 
Danone, Procter & Gamble, American Express, Bankinter, 
Masterfoods Espana, Roche (Pharmaceuticals), McDonald's, and 
Novartis (Pharmaceuticals). 
 
¶5. (U) The most valued traits in a working environment are 
Respect, Confidence, Pride, Equality, Justice, Camaraderie, 
and Benefits.  The survey results indicate 71% of workers say 
they are treated with respect; 74% enjoy their boss's 
confidence; 76% are proud of their work; 87% feel that they 
receive equality in the workplace; 68% of the workers say 
that everyone is treated justly no matter what position they 
hold in the company; 75% enjoy the camaraderie of coworkers 
additionally 86% enjoy an open door policy with their 
superiors.  Strangely only 6 out of 10 employees put 
significant value on special benefits such as parking, day 
care facilities, or massage services located inside their 
place of work. (20 minutos, April 10, 2007) 
Aguirre