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FM AMEMBASSY MADRID
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RUEHC/SECSTATE WASHDC 5342

UNCLAS SECTION 01 OF 04 MADRID 001002 
 
SENSITIVE 
SIPDIS 
 
G FOR U/S DOBRIANSKY, DAN ROCHBERG, AGNES LIPTAK 
 
E.O. 12958: N/A 
TAGS: SENV KGHG SP
SUBJECT: SCENESETTER FOR U/S DOBRIANSKY VISIT TO MADRID 
SEPT.26-OCT. 1 
 
¶1. (SBU)  Summary:  Embassy Madrid warmly welcomes your 
visit.  Your speech at the American Chamber of Commerce 
energy conference, your meetings with GOS officials and 
climate change experts, and a press event will provide 
opportunities to explain USG leadership on climate change and 
address concerns on trafficking in persons and religious 
freedom.  After 15 years of rapid economic growth, Spain is 
feeling the pain of an economic slowdown that has hurt the 
Zapatero government's public standing.  Our bilateral 
relations have recovered from a low point after Spain pulled 
out of Iraq in 2004 and are based on strong cooperation in 
areas such as the military, law enforcement, 
counterterrorism, and renewable energy.  End Summary. 
 
--------------------------------- 
Tough Times for Economy, Zapatero 
--------------------------------- 
 
¶2. (SBU) President Zapatero's Socialist party (PSOE) narrowly 
defeated Mariano Rajoy's Popular Party (PP) in general 
elections last March.  The PSOE gained seats in Congress but 
fell just short of an absolute majority, forcing it to barter 
with small regional parties and the leftist IU to gain 
support.  Foreign affairs did not play a major role in the 
campaign, but the PSOE reminded voters that it removed 
Spain's troops from an unpopular war in Iraq.  Zapatero's new 
cabinet has more female ministers (9) than male (8), 
including Spain's first female Defense Minister, Carme 
Chacon. 
 
¶3. (SBU) Since Zapatero was re-elected, a deepening economic 
slump that the GOS has been unable to stop has increased 
public frustration.  After 15 years of rapid economic growth, 
the end last year of a long construction boom has led to 
surging unemployment, now likely over 11 percent.  Inflation 
is above 4 percent, the economy may already be contracting, 
and 2009 is expected to be an even more difficult year. 
Although Spaniards were briefly cheered by a summer of 
unprecedented sports success, the public mood was further 
dampened by an August 20 Madrid airplane crash that killed 
¶154. 
 
¶4. (SBU) After months of worse-than-predicted economic news, 
Zapatero and his economic policymakers are widely criticized 
for their predictions during the campaign and for having 
denied the economic difficulties long after many others were 
calling them a crisis.  Public skepticism has been aggravated 
by a series of initiatives that have not noticeably halted 
the slowdown and by Zapatero's efforts to blame U.S. 
financial woes (the international credit crunch aggravated 
Spain's troubles but came after the housing slump began). 
Now that the budget surplus of the last four years has become 
a rapidly growing deficit, tensions have heightened over 
regional government financing issues and the 2009 budget. 
 
¶5. (U) The medium-term economic picture remains reasonably 
favorable.  Spain has the world's eighth largest economy and 
is the second largest international tourism destination and 
eighth largest auto manufacturer.  Its per capita GDP 
is expected to pass Italy's in 2010.  U.S. investment has 
long been important to the Spanish economy (more so than 
bilateral trade), and U.S. firms employ over 220,000 
Spaniards.  Spanish investment in the U.S. has surged in the 
last few years, particularly in banking, toll road 
construction, and renewable energy.  In 2007, Spain was the 
fourth largest foreign investor in the U.S. 
 
--------------------------------------- 
Renewable Energy Increasingly Important 
--------------------------------------- 
 
¶6. (U) Renewable energy is an increasingly important part of 
the Spanish economy and of our bilateral relationship. 
Abundant wind and sun and generous feed-in tariffs have 
helped make Spain a world leader in wind and solar power. 
More than 10 percent of the country's electricity is 
generated by wind, and an additional 10 percent comes from 
hydro, solar, and other renewable sources.  Spanish 
companies, including the world's largest (Iberdrola) and 
third largest (Acciona) producers of wind power, own wind 
farms in at least 14 U.S. states and continue to expand. 
They also own four wind turbine manufacturing plants in Iowa 
and Pennsylvania.  Spanish companies have significant solar 
and biofuels investments in the U.S. as well, and U.S. 
companies such as AES are investing in Spain's solar market. 
 
¶7. (U) This past February, you met with a delegation of 
Spanish government and business leaders on renewable energy. 
Among them were several people you will see on this trip, 
 
MADRID 00001002  002 OF 004 
 
 
including Ambassador Aguirre, American Chamber of Commerce 
Chairman Jaime Malet, GOS Secretary of State for Climate 
Change Teresa Ribera, and Acciona official Carmen Becerril. 
The group visited Washington and Denver for meetings with 
federal, Senate, and state officials, business 
representatives, and the National Renewable Energy 
Laboratory.  One of our aims in organizing the mission was to 
emphasize the links between climate change policy and the 
renewable energy industry, and we recommend that you 
highlight these links at the American Chamber conference and 
your press event.  Spain also sent a delegation to WIREC, 
although the event's timing a few days before national 
elections prevented higher-level GOS representation. 
 
¶8. (SBU) An issue that you should be prepared to address is 
GOS and corporate concern over the uncertainty of U.S. 
federal investment and production tax credits for renewable 
energy set to expire December 31.  The GOS and energy 
companies have raised this with Senate and House members and 
USG officials, saying it is the most important issue 
affecting Spanish companies' investment plans.  Your 
interlocutors would appreciate any information you can 
provide about the prospects for renewal of these credits. 
 
-------------- 
Climate Change 
-------------- 
 
¶9. (SBU) Climate change is one of the signature issues of the 
Zapatero Administration.  The socialist government has firmly 
embraced the Kyoto Protocol, under which Spain committed to 
reduce greenhouse gas (GHG) emissions to 15 percent above 
1990 levels by 2012.  Despite generally popular initiatives 
to promote renewables and energy efficiency and to implement 
EU commitments, emissions are currently 50 percent above 1990 
levels, in part because of years of rapid economic growth. 
Spain is the EU country most out of compliance with Kyoto, 
and will not meet its 2012 commitment.  That said, Zapatero 
remains committed to fighting climate change and, despite the 
economic slowdown, may be willing to commit to costly actions 
if necessary. 
 
¶10. (U) After Zapatero,s March re-election, the former 
Ministry of Environment was merged into the former Ministry 
of Agriculture, creating a super ministry responsible for 
environment and climate change, agriculture, rural 
development and marine affairs.  Previous Agriculture 
Minister Elena Espinosa was given charge of the new ministry, 
but the profile of climate change issues was increased.  Lead 
international climate negotiator Teresa Ribera, with whom you 
will meet, is now a Secretary of State, equivalent to an 
Under Secretary.  Spanish officials were pleased that Dr. 
Jose Manuel Moreno was elected in Geneva earlier this month 
to the IPCC,s Working Group II, the group being co-chaired 
by U.S. candidate Chris Field.  You will see Dr. Moreno at 
the Ambassador,s climate change breakfast September 30. 
 
¶11. (SBU) Ribera has said informally that she favors 
establishing aggressive emissions reductions goals to ensure 
progress even if they are not fully attained.  The GOS wants 
to be taken seriously on climate change and demonstrate its 
leadership on the issue, and GOS officials have expressed 
repeatedly their frustration over not being included in the 
USG-initiated Major Economies Meeting process.  The USG and 
GOS obviously differ on climate change policy and approach, 
but we have made gains in developing positive relationships, 
communicating the USG position and providing perspective. 
After the December 2007 Bali conference, Ribera praised the 
USG for its leadership.  We recommend you emphasize the USG's 
commitment to combating climate change without jeopardizing 
economic growth, the need to include commitments by 
developing countries, and our support for technological 
research. 
 
---------------------- 
Trafficking in Persons 
---------------------- 
 
¶12. (SBU)  We hope you will raise trafficking issues when you 
see Deputy Foreign Minister Angel Sanchez de Lossada.  Spain 
continues to merit a Tier 1 country ranking in the annual TIP 
report and fully complies with the minimum standards for the 
elimination of trafficking.  Spain is both a destination and 
transit country for people trafficked for the purpose of 
sexual exploitation and, to a lesser degree, forced labor. 
Trafficking victims arrive in Spain from three major regions: 
Eastern Europe and the former Soviet Union, Latin America and 
sub-Saharan Africa.  More than three-quarters of all 
trafficked women come from five countries: Romania, Russia, 
 
MADRID 00001002  003 OF 004 
 
 
Brazil, Colombia and Nigeria.  Victims trafficked for forced 
labor purposes are primarily found in the agricultural, 
construction, and domestic sectors. 
 
¶13. (SBU)  To further expand its anti-trafficking efforts, 
and under the aegis of the powerful Vice President Teresa 
Fernandez de la Vega, Spain has developed a national integral 
plan against trafficking in persons. The plan, which includes 
a government pledge of almost $45 million per year and over 
200 police to aid in enforcement of anti-trafficking efforts, 
is reportedly ready for adoption by the Council of Ministers 
but is being held pending 
announcement of a larger human rights initiative by the 
Spanish Government, of which anti-trafficking is a part. 
We understand from our Spanish interlocutors that the human 
rights plan, along with the anti-trafficking plan, will be 
announced later this year. We recommend you raise the issue 
with Sanchez de Lossada, commending GOS efforts and urging 
adoption of the plan at the earliest possible date. 
 
------------------------------ 
Religious Freedom and Equality 
------------------------------ 
 
¶14. (SBU)  Spain's record on religious freedom and equality 
is a good one, but there is one issue (which has captured 
some U.S. Congressional attention) which we recommend you 
raise in your meeting with Sanchez de Lossada.  We have 
been encouraging Spain to grant tax treatment to Mormons, 
Jehovah's Witnesses, and Buddhists equivalent to those 
enjoyed by other religions.  The regulatory process is 
complicated, with the first step being a religion's 
recognition as 'well-known and deeply rooted.'  This status 
is known in Spanish as 'notorio arraigo.'  Mormons, 
Jehovah's Witnesses, and Buddhists now have this status, but 
concession of tax benefits and other privileges has 
been delayed because the Spanish Government is preparing a 
legal change that will automatically give all notorio 
arraigo religions the same tax and benefit status rather than 
requiring each to petition for the benefits individually. 
This would be a step forward, but unfortunately the previous 
Congress adjourned without acting.  We are now encouraging 
the GOS to get the measure back on the congressional 
calendar.  The issue involves both the Ministry of Justice 
and (because of the revenue implications) the Ministry of 
Finance. 
 
----------------------------------- 
Diplomatic Cooperation and Security 
----------------------------------- 
 
¶15. (SBU)  U.S-Spain relations were seriously damaged by 
President Zapatero's decision soon after his election in 
2004 to abruptly 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 last September to facilitate 
the sharing of information between our national 
counter-terrorism authorities.  Following the March 11, 2004 
train bombings, Spain remains a target of Islamic extremists. 
Al-Qaeda leaders often call for the recapture of the medieval 
"Al Andalus," and the uncovering in January of a cell 
allegedly sympathetic to Al-Qaeda and operating out of 
Barcelona has shown the public that this threat is not an 
idle one. 
 
¶16. (SBU) Spain is no stranger to terrorism, having fought 
the domestic Basque terrorist group ETA for almost 40 years. 
ETA has been weakened by a series of arrests stemming in part 
from improved cooperation from France.  However, it retains 
the capacity for violence.  It has carried out several 
small-scale bombings and killed two people this year. 
 
¶17. (SBU) Narcotics trafficking is another area of common 
concern and excellent cooperation.  Spanish authorities 
acknowledge that Andean cocaine is a serious problem here, 
and Colombian trafficking organizations are active in 
Spain.  Money laundering is another serious issue.  We are 
increasing bilateral cooperation and encouraging Spain to 
continue engaging more aggressively with law enforcement 
authorities in key Latin American countries. 
 
¶18. (SBU) Spain, second only to the U.S. in terms of 
Investment in Latin America, is actively engaged in the 
region. In addition to cultural and historical ties, Spain 
 
MADRID 00001002  004 OF 004 
 
 
shares our interest in a strong democratic and free market 
institutions in the region.  Regarding Cuba, we share with 
Spain the objective of a peaceful transition to democracy but 
differ markedly on how to achieve this end.  Spain's 
socialist government has opted for engagement, claiming it 
can encourage regime elements who want change.  It has 
claimed that Cuba's willingness to hold dialogue with the EU 
is a result of successful GOS efforts to improve EU-Cuban 
relations.  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. 
 
¶19. (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.  Spain has nearly 800 personnel in Afghanistan and 
runs a provincial reconstruction team in Badghis province. 
Spain has 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 equipment of a 
full battalion.  Spain has nearly 1,100 troops with UNIFIL in 
Lebanon and about 700 in Kosovo.  On Iraq, Spain has 
contributed $22 million to the Basrah Children's Hospital and 
a further $28 million in development funding for Iraq. 
Spain's total commitment to the Iraq Compact was USD 225 
million.  It also has provided through UNHCR over 800,000 
euros for refugee and displaced persons relief in Jordan and 
Syria. 
 
 
----------------- 
Personal Security 
----------------- 
 
¶20. (U)   In general, Spain is safe.  However, Madrid, 
Barcelona and other large cities in Spain attract a large 
number of criminals and pickpockets and frequent incidents of 
crime of opportunity against the unwary do occur.  It is best 
to carry only essential items including a photocopy of your 
passport's photo page.  Visitors can protect 
themselves against crime by being street-smart, alert and 
aware of their surroundings.  Travelers are encouraged to 
review the most recent Worldwide Caution issued by the 
Department of State.  As the Department of State continues 
to develop information on any potential security threats to 
Americans overseas, it shares credible threat information 
through its Consular Information Program documents, available 
on the Internet at http://travel/state.gov.  Additional 
information regarding safety and security in Spain is 
available on the U.S. Department of State's website 
(www.embusa.es). 
Aguirre