VZCZCXRO4219
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSL RUEHSR
DE RUEHMD #0688 1911206
ZNR UUUUU ZZH
R 101206Z JUL 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 0924
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHZP/AMEMBASSY PANAMA 0323
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS MADRID 000688 
 
SIPDIS 
 
STATE FOR EUR/WE, EEB/IFD/OMA 
COMMERCE FOR 4212/D.CALVERT 
ENERGY FOR PIA/K.BALLOU 
TREASURY FOR OIA/OEE/T.O'KEEFFE,D.WRIGHT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EIND EINV ENRG EWWT SP
SUBJECT: MADRID ECONOMIC WEEKLY, JULY 6-10 
 
REF: A. MADRID 659 
     ¶B. MADRID 613 
     ¶C. MADRID 172 
 
Contents: 
 
ECON:IMF Slashes Forecasts on Spain,s Economy 
ENRG: GOS to Make Electric Cars a Priority During EU 
Presidency;  Announces Subsidies for Purchases 
EWWT: Sacyr's Winning Panama Canal Expansion Bid Generates 
Excitement 
EFIN: Salgado Announced 20 Billion-Euro Fund to Reorient 
Economy 
 
IMF Slashes Forecasts on Spain,s Economy 
¶1.  (U) The IMF predicted on Wednesday that Spain,s economy 
will shrink 4% this year, a significant downward assessment 
from the previous forecast of -3%.  The IMF also lowered its 
2010 growth forecast for Spain to -.08%, making Spain the 
only country to have its 2010 forecast revised downward.  The 
GOS's most recent forecast is much more optimistic, 
predicting a contraction of only 3.6% in 2009, and 0.3% in 
¶2010. (Europa Press, 7/8) 
GOS to Make Electric Cars a Priority During EU Presidency; 
Announces Subsidies for Purchases 
 
¶2.  (U) Minister  of Industry, Tourism, and Trade Miguel 
Sebastian announced that the promotion of electric vehicles 
will be a priority for the GOS when Spain assumes the EU 
Presidency in January 2010.  Domestically, the GOS aims to 
have  1 million electric and hybrid cars on the road by 2014. 
 The GOS has created subsidies for the purchase of hybrid and 
electric cars ranging from  a low of 750 euros up to 20,000 
euros to encourage sales.  The GOS is continuing to work with 
several automakers, including Renault and Nissan, to 
mass-produce electric vehicles, though they will not be ready 
until at least 2011 (see ref C).  Sebastian also announced a 
pilot project to build a network of recharging stations for 
electric cars in coordination with the cities of Madrid, 
Barcelona, and Sevilla  (El Mundo 7/7, Expansion, 7/7) 
 
Sacyr's Winning Panama Canal Expansion Bid Generates 
Excitement 
 
¶3.  (U)  The news that a consortium led by Spanish megafirm 
Sacyr Vallehermoso had won the bid to build the third set of 
Panma Canal locks generated widespread attention in Spain. 
Spanish Minister of Development Jose Blanco congratulated 
Sacyr on obtaining the contract for what the company's 
president, Luis del Rivero, characterized as &the most 
important construction project in the world.8  Sacyr shares 
jumped 13% on the news, sparking a stock market rally.  At 
the same time, the conglomerate, heavily affected by the 
severe contraction of Spain's construction sector, continues 
efforts to sell its remaining shares in subsidiary Itinere 
Infraestructuras. (All media, 7/9) 
 
Salgado Announced 20 Billion-Euro Fund to Reorient Economy 
 
¶4.  (U)  Second Vice President and Minister of Economy and 
Finance Elena Salgado announced a special fund financed by 
public and private funds with t total of at least 20 billion 
euros during 2009 and 2010.  The objective is to finance 
activities that contribute directly to a new Spanish 
sustainable productive economic model focusing on social, 
economic, and environmental factors.  She stated that a major 
objective is to encourage private investors to contribute 50% 
of the total, with the government to provide the rest. (All 
media, 7/9) 
CHACON