VZCZCXRO4722
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #0129/01 0371034
ZNR UUUUU ZZH
P 061034Z FEB 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 0175
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3794
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 MADRID 000129 
 
SIPDIS 
 
STATE FOR EUR/WE:SAMSON,ZERDECKI, EEB/IFD/OMA 
TREASURY FOR OIA/OEE/D.WRIGHT 
COMMERCE FOR 4212/DON CALVERT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EIND EINV ELAB KIPR PGOV PREL SP
SUBJECT: MADRID ECONOMIC WEEKLY, FEB. 2-6 
 
REF: MADRID 109 
 
MADRID 00000129  001.2 OF 002 
 
 
Contents: 
 
ELAB: Unemployment Increased Again in January 
EIND: Industrial Production Fell 15 Percent in December 
EFIN: GOS Urges Banks to Lend More 
PREL/PGOV: Spain Apparently Invited to London Economic Summit 
EINV: Inward Foreign Direct Investment Rises 
KIPR: Internet Piracy Criticized at Movie Awards Ceremony 
 
Unemployment Increased Again in January 
 
1.(U) The number of unemployed rose in January by 198,000, 
according to the National Statistics Institute (INE).  The 
Ministry of Labor and Immigration said this was the largest 
monthly increase since the series began 13 years ago.  In a 
written communique, Secretary General for Employment 
Maravillas Rojo indicated that the international financial 
crisis, the lack of liquidity, and the fall in consumption 
were the causes of this increase.  Noticeably absent from 
Rojo's list was the residential construction downturn, which 
has put hundreds of thousands of construction and associated 
workers out of work.  During a February 3 radio interview, 
Labor Minister Celestino Corbacho downplayed fears that 
unemployment would reach above the GOS-projected figure of 16 
percent in 2009.  However, in a news conference earlier that 
day, Secretary General Rojo did not rule out that possibility 
or the possibility that the number of unemployed would reach 
4 million.  (All Media, 2/2) 
 
Industrial Production Fell 15 Percent in December 
 
2.(U) According to the National Statistics Institute (INE), 
industrial output in December was 15.4 percent below its 
December 2007 level, the largest decline since the series 
began in 1993.  The sharpest decreases occurred in automotive 
products  (-48 percent), office equipment and machinery (-40 
percent), plastics (-36 percent) and minerals (-36 percent). 
Tobacco, energy products, and transportation construction 
materials all experienced increases.  (Europa Press, 2/5) 
 
GOS Urges Banks to Lend More 
 
3.(U) President Zapatero met with heads of Spain's leading 
banks on February 2, urging financial institutions to 
increase lending to stimulate the economy and create jobs. 
According to Chamber of Commerce Advisory Council President 
Javier Gomez Navarro, 80 percent of small and medium-sized 
businesses that apply for loans are reporting difficulties in 
getting credit.  Minister of Industry Miguel Sebastian was 
harsher during a February 3 radio interview, saying that the 
government was "losing patience with the failure of the 
country's banks to provide credit to the economy."  Ruling 
party vice-secretary general Jose Blanco and GOS Second Vice 
President Pedro Solbes stepped back from Sebastian's message 
in subsequent days.  Solbes said "I almost never lose my 
patience," and Blanco said the party had "unlimited 
patience," called on business groups not to demonize the 
financial sector, and urged everyone to "row in the same 
direction."  Leading bankers noted that there were fewer 
creditworthy borrowers now than in the past, but banks also 
have begun announcing the amount of loans they plan to 
provide to small and medium-sized businesses.  (El Pais, 
2/3-4; El Mundo, 2/6) 
 
Spain Apparently Invited to London Economic Summit 
 
4.(U) Local media reports that the GOS received an invitation 
via its Embassy in Germany to participate in the February 22 
meeting of EU heads of government who are attending the April 
2 London Summit, indicating that Spain is indeed invited to 
participate in the London Summit.  This is a victory  for the 
GOS, which made it a matter of national pride to be included 
in the November 2008 G-20 financial summit.  Among other 
things, the GOS wishes to be seen as one of Europe's leaders 
as it prepares for its EU presidency in the first half of 
¶2010.  (All Media 2/3) 
 
Inward Foreign Direct Investment Rises 
 
5.(U) FDI inflows into Spain increased by 7.3 percent in 2008 
despite a 21 percent worldwide decline in foreign investment, 
according to UNCTAD figures released by the GOS investment 
promotion agency "Invest in Spain."  With new FDI of USD 57.3 
billion, Spain ranked third in the EU and sixth in the world. 
 
MADRID 00000129  002.2 OF 002 
 
 
 By comparison, according to UNCTAD, the EU as a whole 
suffered a decline in FDI inflows of more than 30 percent and 
the U.S. 5.5 percent.  The GOS cites these figures as a sign 
that Spain remains an attractive destination for investment 
from abroad.  (Moncloa press release) 
 
Internet Piracy Criticized at Movie Awards Ceremony 
 
6.(U) At the annual "Goya" film awards ceremony (Spain's 
equivalent of the Oscars), Film Academy president Angeles 
Gonzalez-Sinde noted that the while times are tough 
everywhere, the Spanish movie industry "has always been in 
crisis...fighting so that illegal downloads don't cause us to 
disappear and that the (internet) administrators understand 
that ADSL operators can't be the only winners in the web 
business."  Gonzalez-Sinde called for a mechanism to make 
films legally available online that is "fair, convenient, and 
advantageous to the user," without which, she warned, 
thousands of jobs were at risk.  Comment: Negotiations 
between Internet Service Providers (ISPs) and rights-holders 
on measures to combat internet piracy are currently stalled, 
and representatives of the film and music industries are 
frustrated.  Gonzalez-Sinde,s remarks offer a useful 
reminder that effective IPR protection is a priority not only 
of the USG but also of Spain's own artists and entertainers. 
(El Pais, 2/3) 
CHACON