VZCZCXRO1687
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #0542/01 1561309
ZNR UUUUU ZZH
R 051309Z JUN 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 0731
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1375
RUEHLA/AMCONSUL BARCELONA 4016
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 MADRID 000542 
 
SIPDIS 
 
STATE FOR EUR/WE, EEB/IFD/OMA 
COMMERCE FOR 4212/D.CALVERT 
TREASURY FOR OIA/OEE/T.O'KEEFFE,D.WRIGHT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ELAB ENRG PRELSP PBTS SP
SUBJECT: MADRID ECONOMIC WEEKLY, MAY 25-JUNE 5 
 
REF: A. MADRID 497 
     ¶B. 08 MADRID 879 
 
MADRID 00000542  001.2 OF 002 
 
 
Contents: 
 
EFIN/EINV: Banco Santander, Venezuela Agree on Billion-Dollar 
Price for Nationalized Bank 
ELAB: Unemployment Numbers Register First Decline in 14 Months 
EFIN: Banco Santander Reaches Agreement to Return $235 
Million in Madoff Funds 
EFIN: Interest Rate on Spanish 10-year Bonds Falls to 4.415 
Percent; Signals Increase in Confidence 
ENRG: Power Company Sells 10-percent Stake in Gamesa 
PREL/EWWT: Odyssey Ruling Sets Important Precedent, Says 
Culture Minister 
 
Banco Santander, Venezuela Agree on Billion-Dollar Price for 
Nationalized Bank 
 
¶1. (U) The Venezuelan government agreed May 22 to pay Banco 
Santander $1.05 billion (755 million euros) for the 
Santander-owned Banco de Venezuela.  The price is 110 million 
euros less than the amount Santander had sought from the GOV, 
which was the same as the price it had agreed upon last year 
with a private Venezuelan purchaser before President Chavez 
blocked the sale and announced that the GOV would purchase 
the bank (Ref B).  Nonetheless, Santander will make a healthy 
profit on its Venezuelan operations; it had invested a total 
of 430 million euros in two banks it purchased in 1997 and 
¶2000.  The letter of intent for the sale also authorizes 
Santander to repatriate 220 million euros in dividends; this 
was reported to be a key issue, and other Spanish companies 
have large amounts (over 1.4 billion euros in the case of 
Telefonica) of dividends pending authorization for 
repatriation.  The GOV will take over the bank on July 3 and 
will pay Santander the $1.05 billion in July, October, and 
December.  The sale will leave BBVA as the only Spanish bank 
with operations in Venezuela.  (El Pais, 5/23) 
 
Unemployment Numbers Register First Decline in 14 Months 
 
¶2. (U) According to the National Employment Institute, the 
number of registered unemployed workers decreased by 
approximately 25,000 (-0.68) in the month of May, registering 
the first decline in 14 months.  In April 2008 the number of 
registered unemployed rose by 40,000.  Spanish government 
officials welcomed the good news, but warned against reading 
too much into this new data.  The media reports that 
decreases in May are common due to hiring for temporary 
summer employment.  (Europa Press, 6/2) 
 
Banco Santander Reaches Agreement to Return $235 million of 
Madoff Funds 
 
¶3. (U) Banco Santander, Spain's largest bank, has agreed to 
return $235 million of funds withdrawn from investments 
associated with Bernie Madoff shortly before his arrest.  In 
return, the U.S. Government has agreed not to pursue any 
other claims against Banco Santander with regards to the 
Madoff funds.  The agreement absolves Banco Santander of any 
wrongdoing and represents 85% of the fundsYC|Qh7 issued 7 billion Euros worth of 
10-year bonds at an interest rate of 4.415%.  With this 
latest issuance, the spread between German bonds and Spanish 
bonds fell from 136.7 basis points to 78.6 basis points. 
German bonds are often used as a benchmark, and the narrowing 
of the spread between German and Spanish bonds signals an 
increase in market confidence in Spanish debt. (El Pais 
5/27/09) 
 
Power Company Sells 10-percent Stake in Gamesa 
 
¶5.  (U) Spain's Ibedrola announced it had sold a 10-percent 
stake in Spanish wind-turbine manufacturer Gamesa Corporation 
Technologica for 391.7 million euros.  The stake was sold at 
Euros 16.10 per share.  Gamesa's share price closed Wednesday 
down 8.16 percent at Euros 15.41.  The stock had closed up 
over 6 percent on June 1.  Iberdrola's shares closed up 1.14 
percent on June 2.  The power company said it would book a 
 
MADRID 00000542  002.2 OF 002 
 
 
capital gain from the sale of 112 million euros.  Despite the 
stake sale, Iberdrola remains Gamesa's leading shareholder 
with a 14.1-percent interest.  Iberdrola's renewable energy 
unit, Iberdrola Renovables, is Gamesa's biggest wind turbine 
customer.  (El Pais, 6/3) 
 
Odyssey Opinion Sets Important Precedent, Says Culture 
Minister 
 
¶6.  (U) Minister of Culture Angeles Gonzalez-Sinde said she 
was pleased with a Florida magistrate's opinion that the 
shipwreck and treasure recovered by US company Odyssey off 
the coast of Cadiz rightfully belongs to the GOS.  She also 
said that the decision sets an important precedent for future 
shipwrecks.  The treasure, determined to be from the Spanish 
ship "Nuestra Senora de las Mercedes," consists of $500 
million of gold and silver coins.  The court's ruling was 
widely covered in the press, making the front page of several 
dailies.  Most stories highlight the fact that Odyssey has 10 
 days to return the treasure or file an objection. (ABC 
6/5/2009, Europa Press 6/4/2009) 
CHACON