VZCZCXRO2715
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #0286/01 0771257
ZNR UUUUU ZZH
P 181257Z MAR 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 0391
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 0947
RUEHLA/AMCONSUL BARCELONA 3902

UNCLAS SECTION 01 OF 02 MADRID 000286 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EUR/WE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SP RS
SUBJECT: SPAIN AND RUSSIA FORGE NEW AGREEMENTS 
 
REF: A. 08MADRID1359 
     ¶B. 09MADRID58 
     ¶C. 07MADRID1257 
     ¶D. 07MADRID1833 
     ¶E. 08MADRID1142 
 
MADRID 00000286  001.2 OF 002 
 
 
¶1. (SBU) SUMMARY: Russian President Dimitri Medvedev visited 
Madrid March 1 - 3, 2009 at the invitation of King Juan 
Carlos and signed a number of agreements with the Spanish 
government aimed at enhancing bilateral relations. The visit 
and resulting agreements reinvigorated the countries' 
economic relationship and political dialogue, particularly in 
the wake of tensions caused by Lukoil,s attempt to purchase 
a large stake in Repsol.  The visit occurred at a key moment 
for relationship building, less than one year before Spain is 
to assume the EU Presidency.  END SUMMARY. 
 
¶2. (SBU) Medvedev,s visit to Spain, at the invitation of 
King Juan Carlos, invigorated dialogue between the two 
countries and was marked by the signing of several 
agreements.  Presidents Medvedev and Zapatero signed a 
"Political Declaration of Strategic Association," which 
raises the level of the bilateral relationship beyond the 
1994 Treaty of Friendship and Cooperation.  With this 
strategic association (similar to those which Spain has 
entered into with Argentina, Brazil, Colombia, Chile, Mexico, 
and Peru), Zapatero and Medvedev will meet annually to 
promote the bilateral relationship, and the foreign ministers 
will meet semi-annually. 
 
¶3. (SBU) The two sides also entered an agreement to allow 
Spanish military personnel, arms, and equipment to transit 
Russia via train and air (with some restrictions) en route to 
Afghanistan.  Memorandums of Understanding also were signed 
between prosecutorial offices regarding engagement and 
cooperation in the fights against terrorism and organized 
crime and between CESCE (Spain's public-private export credit 
company) and the Russian Bank of Development. 
 
¶4. (SBU) The visit provided an opportunity for Russia to 
cement the bilateral relationship prior to Spain,s 
January-June 2010 European Union Presidency.  President 
Zapatero committed that during Spain's 2010 EU Presidency, he 
would support the Russian proposal for a EU-Russia 
Partnership and Cooperation Agreement (PCA), as well as 
Medvedev's security treaty proposal.  In a March 3 opinion 
piece, FM Moratinos echoed this support, stating, "...True 
development must be based on diversification, and because of 
its level of  development and economic profile, the EU is 
Russia's natural partner...Although Europe may be our central 
focus, in Russia and Spain we have a dimension to our 
identity that goes beyond European borders: Spain, with its 
deep involvement in Latin America and the southern 
Mediterranean, and Russia with its strong ties to Asia...We 
must move toward a better integration of our skills and 
reinforce the security and progress of our citizens.  In that 
sense, Medvedev has put forward an interesting proposal to 
consider a new system of European security, one which, while 
preserving the existing structure, increases security for us 
all...." 
 
¶5. (SBU) This visit also comes on the heels of Lukoil's 
controversial bid for a 29.9 percent stake in Spanish Energy 
giant Repsol (reftels A and B).  This bid created a stir in 
the media and within the political opposition partially based 
on a negative perception of Russia - especially its actions 
in Georgia and the Ukraine gas conflict.  Although the King 
and Zapatero both favored the bid, Industry and Commerce 
Minister Sebastian was a critic, saying that (even if the 
sale did take place) the GOS would do everything possible to 
ensure that Repsol remained independent and Spanish. 
 
¶6. (SBU) During Medvedev,s visit, these concerns were 
smoothed over, particularly with the signing of an energy 
agreement between Zapatero and Medvedev committing to 
increased cooperation in the areas of petroleum, natural gas, 
and renewable energies.  Russia is currently Spain,s top 
provider of crude oil (22 percent in 2007), but has not yet 
broken into Spain,s natural gas market.  However, media 
sources report that Gazprom is interested in exporting gas to 
Spain, as well as working with Spanish companies to expand 
its operations to Latin America.  Encouraging Russia,s entry 
as a supplier of natural gas might prove to be a boon to 
Spain, which has experienced tense moments with its principal 
supplier, Algeria (reftels C and D). 
 
¶7. (SBU) COMMENT: Russia is no doubt courting Spain in 
advance of its EU Presidency. Given the GOS's previous 
 
MADRID 00000286  002.2 OF 002 
 
 
openness to both the EU-Russia PCA and Medvedev's security 
treaty proposal following the Caucasus crisis (reftel E), 
Russia and Spain focus on their common ground.  President 
Zapatero added to these bilateral commitments a promise to 
work to promote dialogue between Russia and the United States 
during the EU Presidency.  "We plan to resume our 
trans-Atlantic contacts with the U.S. It is important for the 
European Union to ensure serious changes in the agreements 
between Russia and the United States, with Spain's assistance 
and mediation." END COMMENT. 
CHACON