VZCZCXRO3590
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHMD #1123/01 2981538
ZNR UUUUU ZZH
R 241538Z OCT 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 5483
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3617
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 MADRID 001123 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/WE, EEB/IFD/OMA 
COMMERCE FOR 4212/DON CALVERT 
TREASURY FOR IA/OEE: W.LINDQUIST 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV PGOV PREL TSPA SP
SUBJECT: MADRID ECONOMIC WEEKLY, OCT. 20-24 
 
REF: A. MADRID 1105 
     ¶B. MADRID 1101 
     ¶C. MADRID 1080 
 
MADRID 00001123  001.2 OF 002 
 
 
CONTENTS: 
 
ECON/PGOV:GOS Pulling Out All Stops for invitation to Global 
Financial Summit 
 
ECON/PGOV: GOS Sidesteps Attempts by Opposition Partido 
Popular to Derail its 2009 Budget Proposal 
 
EINV/EFIN: Argentine Plan to Nationalize Private Pensions 
Causes Madrid Stock Market to Plunge 
 
EFIN/EINV: GOS Intends to Support Bank Asset Purchase Program 
Via Gulf States SWFs 
 
TSPA: NASA and Spanish Space Agency Celebrate Cooperation at 
Madrid Deep Space Tracking Station 
 
 
GOS Pulling Out All Stops for Invitation to Global Financial 
Summit 
 
¶1.  (SBU) The hot topic for much of this week has been 
President Zapatero's failure to be invited to the upcoming 
global financial summit and GOS efforts to secure an 
invitation (ref A).  Media reported October 24 that the 
government is reaching out "in every direction to the entire 
world at all levels."  Coverage has included versions of 
Ambassador Dezcallar's meeting with Deputy Treasury Secretary 
Kimmit and FM Moratinos's telcon with the Secretary. 
Zapatero, during a last-minute visit to China, reportedly 
pressed his case with the GOC, and there is talk of overtures 
to Brazil as current president of the G-20.  According to 
some reports, King Juan Carlos is also trying to use his 
prestige to ensure Spain's inclusion.  The opposition Partido 
Popular (PP) supports Spain's participation in the summit, 
but also blames the failure to invite Spain on international 
perceptions that Zapatero is not a serious leader.  Some 
press reports suggest that the relationship between President 
Bush and Zapatero is not helping Spain's chances.  (All 
media, October 22-24) 
 
GOS Sidesteps Attempts by Opposition Partido Popular to 
Derail its 2009 Budget Proposal 
 
¶2.  (U) On October 22, the ruling PSOE successfully blocked 
attempts by the opposition Partido Popular to secure 
legislative rejection of the 2009 proposed budget.  During 
the Parliament's budget debates, opposing parties proposed a 
total of five "rejection amendments" which would have forced 
the GOS to completely reformulate the budget.  With 169 
parliamentarians, the ruling Socialist Party (PSOE) was seven 
votes short of a majority needed to block these amendments. 
However, with offers to improve infrastructure investment in 
Galicia and the Basque region, the PSOE was able to gain 
eight supporting votes from the National Galician Bloc (BNG) 
and National Basque Party (PNV), traditional allies in the 
budget process.  The proposed 2009 budget envisions a 2 
percent increase over 2008 with a deficit projected at 1.5 
percent of GDP.  It places particular emphasis on social 
spending and investment in infrastructure and research and 
development.  Having avoided being sent back to the drawing 
board, the bill will now be subject to piecemeal amendment 
proposals.  It is expected to be approved in its entirety and 
signed in the last week of December in time to take effect 
January 1, 2009. 
 
Argentine Plans to Nationalize Private Pensions Causes Madrid 
Stocks to Plunge 
 
¶3.  (U) The Madrid Ibex 35 Index fell by more than 8 percent 
October 22, its second-worst day of the year, followed by an 
additional 2 percent decline October 23 and another 7 percent 
fall through mid-afternoon of the 24th, after news that 
Argentina planned to nationalize private pension funds. Spain 
is the largest foreign investor in Argentina.  Its 
second-largest bank, Bilbao Vizcaya Argentaria (BBVA), is 
running one of the pension funds to be nationalized.  Based 
on fears that the GOA might engage in further 
nationalization, stocks of energy giant Repsol fell by 15 
percent, BBVA and Banco Santander by 8 percent, and 
Telefonica by 9 percent.  Another large Spanish investor, 
 
MADRID 00001123  002.2 OF 002 
 
 
Grupo Marsans, continues to negotiate with the government 
over the re-nationalization of Aerolineas Argentinas.  (All 
media, October 23-24) 
 
GOS Intends to Support Bank Asset Purchase Program Via Gulf 
States SWFs 
 
¶4.  (U) On October 20, the Parliament approved the GOS bank 
support package (ref C), under which the GOS initially will 
spend between 10 and 20 billion euros, beginning in November, 
to buy high-quality bank assets.  The GOS will finance the 
purchases, which could eventually total 50 billion euros, by 
offering public debt to sovereign wealth funds from Gulf 
Cooperation Council member states, according to Minister of 
Industry, Tourism, and Trade Miguel Sebastian.  (All media, 
October 21) 
 
NASA and Spanish Agency Celebrate Cooperation at Madrid Deep 
Space Tracking Station 
 
¶5.  (U) On October 21, officials of NASA and its Jet 
Propulsion Laboratory (JPL) traveled to Robledo de Chavela, 
located in the mountains about an hour northwest of Madrid, 
to visit the Madrid Deep Space Communications Complex (MDSCC) 
as guests of the Spanish National Institute of Aerospace 
Technology (INTA).  One of three such stations in the world - 
the others are in Canberra, Australia and Goldstone, 
California - MSDCC provides critical tracking and 
communications support for NASA's deep space missions, as 
well as training for communications professionals.  Its four 
large satellite dishes, of which the largest is 70 meters in 
diameter, send and receive transmissions to and from 
satellites orbiting the earth and space vehicles on a variety 
of missions.  The ceremony marked the station's transition 
from outmoded gas generators to commercial power and was 
attended by representatives ofthe Madrid regional government 
and the Mayors of several nearby towns.  The NASA-INTA 
partnership offers an excellent example of constructive 
bilateral cooperation.  (Embassy Madrid) 
 
AGUIRRE