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FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 4032
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UNCLAS SECTION 01 OF 04 MADRID 000006 
 
SIPDIS 
 
SIPDIS 
 
FOR H - PLEASE PASS TO CODEL LIEBERMAN 
 
E.O. 12958: N/A 
TAGS: OREP PREL SP
SUBJECT: SPAIN SCENESETTER FOR CODEL LIEBERMAN - CORRECTED 
CABLE PARAGRAPH 13 
 
MADRID 00000006  001.2 OF 004 
 
 
¶1. (SBU) Summary:  I warmly welcome Senator and Mrs. 
Lieberman to Madrid.  When you arrive, Spain will be emerging 
from the Holidays and starting to focus on what is likely to 
be a very competitive March 9 general election.  Although the 
media here prefers to focus on differences in the U.S.-Spain 
relationship resulting from Spain's 2004 withdrawal from 
Iraq, cooperation is excellent in areas of common interests - 
fighting terrorism and organized crime, strengthening NATO 
and the Transatlantic security relationship, and in promoting 
the spread of democracy in many areas of the world.  As the 
Hispanic population of the United States continues to grow, 
and as Spanish increasingly becomes our second national 
language, Spain has the potential to be an even closer U.S. 
partner.  End summary. 
 
Counter-Terrorism and Law Enforcement 
------------------------------------- 
 
¶2. (SBU) U.S.-Spain relations were seriously damaged by 
President Zapateros's decision soon after his reelection in 
2004 to precipitously withdraw Spanish forces from Iraq. 
However, over the last several years both countries have made 
a concerted and successful effort to rebuild the relationship 
based on strong mutual interests in counter-terrorism, 
fighting narcotics trafficking and organized crime, and 
rapidly expanding economic ties.  The real bilateral story is 
found in novel initiatives such as the HSPD-6 agreement we 
signed in September to facilitate the sharing of information 
between our national counter-terrorism authorities.  Spain is 
home to a large and growing Muslim population.  The March 11, 
2004, train bombings were a shock to Spain (21 of the 
suspects were convicted here in October).  Spain remains a 
target of Islamic extremists; al-Qaeda has called for attacks 
to recapture the medieval "Al Andalus".  The Spanish are 
actively pursuing Islamic extremist terrorism-related 
investigations and have scores of suspects in jail.  Neither 
has the threat of ETA terror gone away:  two Spanish Civil 
Guard officers were murdered in France in early December by 
the Basque terrorist group. 
 
¶3. (SBU) Narcotics trafficking is another area of common 
concern.  Andean cocaine is a serious problem here, and 
Colombian trafficking organizations are active in Spain. 
Money laundering is another serious issue.  We are eager to 
find ways to increase bilateral cooperation and to encourage 
Spain to engage more aggressively with law enforcement 
authorities in key Latin American countries. 
 
Security and Diplomatic Cooperation 
----------------------------------- 
 
¶4. (SBU) Spanish military cooperation matters.  The bases of 
Rota and Moron are strategic hubs, midway between the U.S. 
and Afghanistan and Iraq.  U.S. planes and ships account for 
around 5,000 flights and 250 port calls a year in Spain.  The 
Spanish military is pro-U.S. and pro-NATO.  The navy employs 
the AEGIS system in its frigates and has been working for 
five years to acquire the Tomahawk missile system.  Spain is 
also interested in the Joint Strike Fighter.  We need to keep 
this military-to-military relationship strong. 
 
¶5. (SBU) Spain has 750 troops with ISAF in Afghanistan and a 
provincial reconstruction team in Badghis province.  They 
have contributed some 150 million Euros in Afghan 
reconstruction funds.  Planning is underway to allow the 
Spanish to train and equip an Afghan Army company, which we 
hope will be a prelude to the training and equipping of a 
full battalion.  On Iraq, Spain has contributed $22 million 
to the Basrah Children's Hospital and a further $28 million 
in development funding for Iraq.  Spain has nearly 1,100 
troops with UNIFIL in Lebanon and about 700 in Kosovo. 
 
¶6. (SBU) On the diplomatic front, Spain in recent years has 
more often been a follower than a leader, looking to stay 
within EU consensus on issues such as Kosovo, Iran, and 
missile defense.  It is more forward-leaning on the Middle 
East peace process, undoubtedly driven by FM Moratinos' long 
personal involvement in the issue.  Moratinos was an eager 
participant in the Annapolis Conference and helped ensure 
Spain made a robust pledge of support for the Palestinian 
Authority during the recent Paris donors' conference.  Driven 
by the twin threats of terrorism and illegal immigration, 
Spain is also increasing its engagement with the countries of 
North and Western Africa. 
 
¶7. (SBU) Spain is second only to the U.S. in terms of 
economic and political influence in Latin America.  Spain 
 
MADRID 00000006  002.2 OF 004 
 
 
wants strong democratic and free market institutions in the 
region.  Nevertheless, we have sharp differences over Cuba. 
Spain's socialist government has opted for engagement, 
claiming it can encourage regime elements who want change. 
We take every opportunity to remind the Spanish that the 
Cuban regime is only interested in survival and that the 
Cuban dissidents need and deserve the active and visible 
support of democracies everywhere.  On Venezuela, the 
socialists' early efforts at constructive engagement with 
Chavez have gone sour.  At the most recent Iberoamerican 
Summit, King Juan Carlos publicly interrupted a Chavez tirade 
about former Spanish President Aznar, telling the Venezuelan 
President to "shut up." The government is uncomfortably 
situated between Spanish companies who fear Chavez will move 
against their Venezuela interests and the strong public 
support for the King. 
 
Economy 
------- 
 
¶8. (SBU) Spain has one of the fastest growing economies in 
Europe.  In fact, the economy has grown in each of the last 
15 years, and per capita GDP passed Italy's in 2006.  In the 
last several years, a housing boom has contributed greatly to 
growth, but as elections approach, housing prices are 
stagnating, construction is slowing, and unemployment and 
inflation are staring to creep up.  U.S. investment has long 
been important to the economy (more so than bilateral trade), 
but the tables have turned.  This year, Spain has been the 
fourth largest foreign investor in the U.S., with particular 
emphasis in banking, construction, and renewable energy.  In 
the latter sector, Spain has the world's largest and third 
largest wind power firms, and Spanish firms also are active 
in U.S. solar and biofuels projects. 
 
Elections 
--------- 
 
¶9. (SBU) Spain will hold a general election March 9, and the 
campaign will just be heating up as you arrive.  The ruling 
Spanish Socialist Workers' Party (PSOE) candidate is 
President Jose Luis Rodriguez Zapatero.  Despite a strong 
economy, a budget surplus, and a variety of social spending 
initiatives, the early polls indicate a close race. 
Nevertheless, the polls also suggest Partido Popular (PP) 
candidate Mariano Rajoy has had limited success getting his 
message out.  The PSOE will run on the economy and its social 
programs.  The PP will argue the economy is softening and 
that the PSOE has made too many concessions to Basque and 
Catalan regional governments, is weak on ETA, and soft on 
illegal immigration.  Foreign affairs is unlikely to be a key 
issue, but the PSOE will remind voters it got Spain out of 
Iraq while the PP will say Spain's international prestige has 
slipped. 
 
Jewish Community in Spain 
------------------------- 
 
¶10. (SBU) Full religious freedom only returned to Spain in 
1978 with the establishment of a democratic constitution.  In 
practice, Spain is still an overwhelmingly Catholic country, 
although Protestant and Islamic believers are increasingly 
important demographically.  Estimates of the size of the 
Jewish community in Spain vary from 50,000 to 100,000 
faithful, primarily concentrated in urban areas including 
Madrid and Barcelona.  The Spanish Federation of Jewish 
Communities (FCJE) signed an agreement with the Spanish 
government in 1992 establishing Judaism as one of the "deeply 
rooted faiths" of Spain.  Certain local and regional 
governments, among them Toledo, Segovia, and Sevilla, have 
sought to capitalize on Jewish tourism by publicizing the 
romantic aspects of the Sephardic community in 
pre-Inquisition Spain while downplaying the expulsion. 
Nevertheless, anti-Semitism remains an undercurrent in Spain; 
swastikas and other graffiti appear periodically on buildings 
and in neighborhoods associated with Judaism or the 
pre-expulsion Sephardic presence.  Neo-Nazi propagandists and 
ultra-rightists remain present in Spain, most significantly 
along the Mediterranean coast in Valencia and Barcelona, but 
also in all major cities.  In Madrid, skinheads, Falangists 
and Franco supporters make their presence known through 
infrequent demonstrations and marches, as well as by 
harassing the growing immigrant population. 
 
¶11. (SBU) The USG is currently engaging with the GOS over the 
2007 exhumation of three pre-expulsion Sephardic cemeteries 
in Andalucia and Catalunya.  In each case the cemeteries were 
 
MADRID 00000006  003.2 OF 004 
 
 
uncovered by accident during excavation for construction or 
road projects, and in each instance the local authorities did 
not handle the graves in keeping with strict Jewish dictates, 
more likely out of ignorance than malice.  Based on interest 
from concerned Americans, among them Representative Edolphus 
Towns, Chairman Warren Miller of the U.S. Commission for the 
Preservation of America's Heritage Abroad, and Rabbi David 
Niederman of the United Jewish Organization, I, my DCM and 
our Consul General in Barcelona have expressed our concern to 
the Spanish government that these culturally and religiously 
sensitive sites need to be protected and handled in a manner 
in keeping with the wishes of the Jewish community in Spain. 
Because each municipal government has jurisdiction in affairs 
dealing with cemeteries, the government has sought to place 
the responsibility on each local jurisdiction.  The FCJE and 
local Jewish organizations have lobbied the national and 
local governments to enact a national protocol for addressing 
any future excavations and are hoping to secure funding to 
research the location and condition of other cemeteries that 
have been lost for centuries.  The exhumed remains have since 
been re-interred in other Jewish cemeteries with religious 
authorities present. 
 
¶12. (SBU) Critics have accused the Spanish government of 
taking anti-Israel stances with respect to both the Middle 
East Peace Process and the 2006 Israel-Lebanon conflict, 
while the government has strongly refuted allegations of 
anti-Semitism and Israel bashing.  Spain's Foreign Minister 
Moratinos is a frequent visitor to the region, and he made a 
controversial visit to Damascus and Beirut in 2007 in which 
he was photographed with the number two of Hizballah. 
Nevertheless, he claims to enjoy a good relationship with 
Israeli FM Livni and is planning a fence-mending trip to 
Israel in the coming months. 
 
Pisarro Painting Claim 
---------------------- 
 
¶13. (SBU) During your conversation with Ambassador Ana 
Salomon, you may wish to mention the claim of Claude 
Cassirer, an elderly American citizen, for a Camille Pissarro 
painting ("Rue Saint Honore") now at the Thyssen Bornemisza 
Museum in Madrid, Spain's appeal of a U.S. district court 
ruling that U.S. courts have jurisdiction is now before the 
9th Circuit.  The Nazis forced Mr. Cassirer's grandmother to 
sell the painting in 1939.  Baron Hans Heinrich 
Thyssen-Bornemisza acquired it in 1976.  In the early 1990's, 
the Spanish Government purchased the collection and built the 
current museum.  In 1958, Mrs. Cassirer received a DM 120,000 
restitution payment for the disappearance and provisional 
dispossession of the painting, but retained full right to the 
painting.  Were Mr. Cassirer to win his claim, he would be 
obliged to reimburse this amount to the German authorities. 
Pursuant to the 1998 Washington Conference Principles on Nazi 
Confiscated Art, Cassirer's attorneys offered to discuss the 
claim with the Government of Spain in 2002 but the government 
refused.  Spain also refused to engage in a mediation process 
that was part of the district court proceedings.  The 
Washington Conference accepted the Principles by consensus, 
in which the Spanish representative joined.  Dealers, 
claimants and holders of artworks generally heed the 
principles.  Spain correctly points out that the principles 
provide for states to "act within the context of their own 
laws", and notes that claimant has not filed a claim in 
Spain.  But the Principles also call on parties to achieve 
just and fair solutions on an expeditious basis and to 
develop and use alternative dispute resolution mechanisms. 
In December 2007, Ambassador Salomon told Ambassador J. 
Christian Kennedy, the Special Envoy for Holocaust Issues, 
that the new Spanish Minister of Culture might take a more 
constructive view of this claim.  In June 2005, the then 
Special Envoy raised the issue in Madrid with museum and 
government officials, to no avail.  Earlier correspondence 
between the Envoy and the Spanish Ambassador in Washington 
was also without result.  We recommend you urge Ambassador 
Salomon and others as appropriate to engage with Cassirer to 
find a mutually acceptable solution. 
 
Conclusion 
---------- 
 
¶14. (SBU) Again, I am looking forward to your visit.  While 
we want to avoid being an issue in the Spanish elections, we 
do need to remind Spain that the bilateral relationship is 
founded on strong mutual interests such as counter-terrorism 
and law enforcement.  Regardless of who wins in March, 
terrorists, drug traffickers, and alien smugglers will 
 
MADRID 00000006  004.2 OF 004 
 
 
continue to see both our countries as targets.  We have much 
work to do together. 
AGUIRRE