VZCZCXYZ0000
RR RUEHWEB

DE RUEHMD #0218/01 0571642
ZNR UUUUU ZZH
R 261642Z FEB 10
FM AMEMBASSY MADRID
TO SECSTATE WASHDC 2014

UNCLAS MADRID 000218 
 
SENSITIVE 
SIPDIS 
 
STATE/H PASS HCFA FOR CODEL GORDON 
 
E.O. 12958: N/A 
TAGS: OREP PREL SP
SUBJECT: SCENESETTER FOR CODEL GORDON, MARCH 5-9, SPAIN 
 
Summary 
------- 
 
¶1. (U) Embassy Madrid welcomes your visit.  U.S.-Spain 
relations are strong and based on shared global interests, 
including our association in NATO, the fight against 
terrorism, and growing economic ties.  Spaniards are 
enthusiastic about President Obama, and the GOS is optimistic 
about the prospect for closer bilateral relations and 
enhanced engagement.  Spain is the European Council president 
for the first six months of 2010. End summary. 
 
Bilateral Relations 
------------------- 
 
¶2. (SBU) We value Spanish cooperation on security issues and 
in the fights against terrorism and narcotics.  Spain is a 
strong bilateral defense partner, despite differences in the 
past over its sudden withdrawal from Iraq in 2004 and its 
poorly coordinated withdrawal in 2009 from the NATO force in 
Kosovo.  Spain operates a Provincial Reconstruction Team in 
Afghanistan with about 1,000 troops participating in ISAF, 
and the Spanish congress approved deployment of 500-plus 
additional troops on February 17 and authorized 40 civil 
guard police trainers.  Spain also allows us the use of two 
military bases that are crucial transit points between the 
U.S. and Afghanistan and Iraq.  Counter-terrorism and law 
enforcement cooperation is strong, as are business ties. 
 
Political Context 
----------------- 
 
¶3. (SBU) President Zapatero won re-election to a second term 
in 2008.  His center-left Spanish Socialist Workers Party 
(PSOE) is seven seats shy of a Congressional majority and 
fared poorly in regional and European Parliament elections in 
¶2009. Zapatero's popularity has suffered because of the long 
recession and what are viewed as the government's ineffective 
efforts to address it.  The conservative opposition Popular 
Party (PP) has not capitalized on Zapatero's unpopularity, as 
it has suffered internal divisions and has been dogged by 
corruption accusations.  That said, recent polls suggest that 
the PP could win an election over the Socialists if the vote 
was held today.  Zapatero has sought to show that he is 
taking a leading international role in the response to the 
economic crisis, and the EU Presidency gives the GOS an 
opportunity to play up its international role. 
 
Economic Context 
---------------- 
 
¶4. (U) Spain grew much faster than the EU average over the 15 
years through 2007 and now has the world's 9th largest 
economy.  The rapid growth was driven by a housing boom that 
ended in 2007, after which the world economic crisis 
aggravated the economy's woes.  Spain has been in recession 
for almost two years.  It will be the last large economy to 
begin to recover, and the eventual recovery is expected to be 
sluggish. Unemployment, now over 19 percent, is expected to 
pass 20 percent this year.  The GOS has responded with a 
major fiscal stimulus.  This has boosted the budget deficit 
above 11 percent of GDP, and the GOS will have to limit 
spending significantly between now and 2013 to meet EU 
deficit requirements.  Research spending is expected to see 
significant cuts.  Last month, markets and commentators 
expressed concern that the government's budget troubles would 
put it in a situation like Greece's, but concern seems to 
have receded, and the government successfully issued new debt 
the week of February 15. 
 
¶5. (U) The bilateral economic relationship is strong.  The 
U.S. is the largest investor in Spin though the flow of new 
investment has slowed in recent year.  Spain is the tenth 
largest foreign investor in the U.S., and Spanish firms are 
especially active in wind and solar power, banking, and road 
construction.  The GOS and Spanish companies see the USG as 
providing Spanish companies opportunities in these areas and 
others through the stimulus package, climate change 
legislation, and efforts to sell troubled banks, and the GOS 
portrays close bilateral relations as helping Spain's 
economic interests. 
 
Renewable Energy 
---------------- 
 
¶6. (U) Renewable energy is an increasingly important part of 
the Spanish economy, and of our bilateral relationship.  The 
Zapatero government is working to reorient Spain's economy 
towards more sustainable sectors. Renewable energy is a key 
part of Zapatero's vision, in fighting climate change as well 
as in promoting energy security and developing new 
industries.  Generous (and costly) feed-in tariffs have 
helped make Spain a world leader in wind and solar power: 
Iberdrola is the world's largest producer of wind power, and 
Acciona is the second largest.  Gamesa, partially owned by 
Iberdrola, is one of the world's largest manufacturers of 
wind turbines as well as operating wind farms.  Spain is also 
the world's third largest generator of solar power, and many 
firms are seeking approval to build photovoltaic and 
concentrated solar projects.  While U.S. companies are 
investing in (AES, FPL) and supplying (GE, First Solar) 
renewables projects in Spain, Spanish investment in 
renewables in the U.S. is much greater. 
 
7.(U) Spanish companies own wind farms in about 20 U.S. 
states and continue to expand.  Iberdrola plans to invest 
another six billion dollars in U.S. renewable projects by 
¶2012.  Iberdrola-owned wind projects have received over 
USD500 million in stimulus funds in grants it took in place 
of production tax credits, and Acciona expects to receive 
significant amounts as well. Gamesa and Acciona own four wind 
turbine manufacturing plants in Iowa and Pennsylvania. 
Acciona owns the world's third largest solar plant, the 64-MW 
Nevada Solar One concentrated solar (parabolic trough) 
project.  Abengoa Solar plans to build a 280-MW concentrated 
solar plant in Arizona that will be the world's largest. 
Abengoa Biofuels has several ethanol plants in the U.S.  In 
addition to the many investments mentioned above, Spanish 
companies and government bodies collaborate with DOE's 
National Renewable Energy Laboratory on research.  Abengoa 
Solar has received five DOE or NREL contracts to develop 
parabolic trough and power tower technology.  Abengoa has won 
DOE grants for second-generation ethanol projects. 
 
Science Policy 
-------------- 
 
¶8. (SBU) GOS science policy falls largely under the Ministry 
of Science and Innovation, a new ministry created by 
President Zapatero.  Minister Cristina Garmendia is not 
affiliated with the PSOE and comes from a business 
background.  She was reportedly recommended for the position 
by Minister of Industry, Tourism and Commerce Miguel 
Sebastian (for whom she had previously worked).  However, her 
ministry and Sebastian's have had turf battles over 
responsibility for energy research and space policy in which 
Sebastian has generally prevailed.  In addition, Garmendia's 
ministry has suffered budget cuts for R & D recently and lost 
some responsibility for university education.  Congress also 
has a say on science policy through the Commission on Science 
and Innovation (CSI) which is responsible for legislation 
that promotes science and innovation policies.  CSI is headed 
by Chairperson Teresa Rodriguez who first entered congress in 
¶1987.  CSI was created as a permanent legislative body in 
2008: it does not have a defined set of issues but works on 
matters referred from the Congressional Standing Committee. 
CSI is currently reviewing the relationship between the 
private sector and government in R and D. 
 
EU Presidency 
------------- 
 
¶9. (SBU) The GOS has named a wide range of issues as 
priorities for its presidency.  Its most frequently mentioned 
priorities are coordinating economic recovery and reform 
measures, coordinating implementation of the Lisbon Treaty 
(including adjusting to the new roles of President Van Rompuy 
and High Representative Ashton), and promoting gender 
equality.  Foreign Ministry officials have also acknowledged 
that during Spain's presidency, the EU will face important 
decisions on Iran sanctions.  President Zapatero and other 
GOS officials often cite strengthening transatlantic 
relations as another top priority and were disappointed that 
President Obama will not visit Spain for a U.S.-EU summit 
during Spain's tenure as EU president. 
 
 
Personal Security 
----------------- 
 
¶10. (U) In general, Spain is safe.  However, Madrid and other 
large cities attract a large number of criminals and 
pickpockets, and frequent crimes of opportunity against the 
unwary do occur.  It is best to carry only essential items, 
including a photocopy of your passport's photo page. Visitors 
can protect themselves against crime by being street-smart, 
alert, and aware of their surroundings. Travelers are 
encouraged to review the most recent Worldwide Caution issues 
by the Department of State.  As the Department of State 
continues to develop information on any potential security 
threats to Americans overseas, it shares credible threat 
information through its Consular Information Program, 
available on the Internet at http://travel/state.gov. 
Additional information regarding safety and security in Spain 
is available on the U.S. Department of State's website 
(www.embusa.es). 
SOLOMONT