This record is a partial extract of the original cable. The full text of the original cable is not available.

121706Z Jan 06

C O N F I D E N T I A L SECTION 01 OF 02 MADRID 000076

SIPDIS

FROM THE AMBASSADOR FOR EUR A/S FRIED AND NSC DAN FISK

E.O. 12958: DECL: 01/11/2016
TAGS: PREL SP
SUBJECT: SPAIN/VENEZUELA: REACTION TO DENIAL OF LICENSE FOR
TECH TRANSFER

REF: STATE 5253

Classified By: DCM Bob Manzanares; reasons 1.4 (B) and (D).

¶1. (C) Summary. The Ambassador met with Foreign Minister
Miguel Angel Moratinos on January 12 to advise him of the USG
decision to deny the Spanish technology transfer license
request related to the sale of Spanish aircraft to the
Venezuelan government. Moratinos expressed frustration,
saying it would be seen as a "punitive action" by the USG
against Spain and would provide a field day for the
opposition and the media. He said he expected a negative
reaction by President Zapatero to the news. Moratinos
complained that the USG did not recognize Spain's positive
steps, but only focused on negative episodes in the
relationship; he urged a clear "positive signal" that the USG
wanted good relations with Spain. The Ambassador reviewed
the USG's clear, consistent, and frequent messages to Spain
regarding its sale of ships and planes to Venezuela. He said
the USG also desired better relations and had made a
concerted effort to work with Spain in Latin America, as
evidenced by the upcoming visit of WHA A/S Shannon. The
Ambassador met briefly with President Zapatero and Moratinos
at a representational event later in the day; both appeared
to have accepted the news and were focused on how to deal
with it in the media. Comment: It would be useful from
Embassy Madrid's perspective to again demonstrate our
interest in good relations with Spain, perhaps by arranging a
meeting for Moratinos with the Secretary when Moratinos is in
the U.S. in May for the U.S.-Spain Council meeting in
Florida. End Comment.

¶2. (C) Separately, Moratinos discussed his impressions of
Bolivian president-elect Evo Morales, describing him as
honest, but inexperienced and caught in "a bear hug" by
Castro and Chavez. He said he had encouraged Morales to work
with the USG. For his part Morales asked that Spain convey
two messages to the USG: A) that the USG not imply that he is
connected to narcotraffickers (or by association with
terrorists) because of his support for the coca growers, and
B) that the USG give Morales "room for maneuver" with the IMF
and World Bank. End Summary.

¶3. (C) The Ambassador, accompanied by DCM, relayed reftel
points to FM Moratinos and Deputy FM Bernardino Leon, telling
Moratinos that it was not the USG's intent to make the denial
of the licenses public. The Ambassador explained that the
USG had carefully reviewed the application for a license by
EADS CASA and was denying the application consistent with USG
concerns regarding the transfer of such technology to
Venezuela, not as a swipe against the Spanish government. He
told Moratinos that he would similarly inform Minister of
Defense Jose Bono and EADS CASA Chairman Sanz.

¶4. (C) Moratinos asked whether the USG decision could be
reversed. The Ambassador said that it was a firm decision
that could only be revisited if Venezuela changed its present
course, noting that the USG was following the same policy
with respect to similar applications by other countries for
authorization to transfer technology to Venezuela, as we had
recently explained to Spanish officials. Moratinos said the
denial of the applications was unfortunate, given the Spanish
government's approval to EADS CASA to continue with the sale
and expressed concern about how this decision would affect
Spanish commercial interests. The Ambassador ventured that
EADS CASA would probably not be unduly harmed, given the
company's significant business interests elsewhere, but that
that issue was for the company to resolve.

¶5. (C) Moratinos turned to the political impact of the USG
decision, saying it would be portrayed as a punitive action
by the USG against the Zapatero government and would give the
opposition and the media platform to cast Zapatero as inept
in his handling of relations with the U.S. Moratinos said he
would inform Zapatero immediately and expected him to react
negatively to the news. He said he would inform the
Ambassador of Zapatero's reaction.

¶6. (C) In a frustrated tone, Moratinos asked what the USG
expected of Spain. He said 2006 was a crucial year for the
Zapatero government and that they had to get bilateral
relations on track because the U.S. would be absorbed by
political campaigning in 2007. Moratinos said Spain desired
"clear signals" from the USG that bilateral relations had
improved, but saw only "punitive signals," including this
decision to deny the technology transfer to Venezuela. He
said the USG and Spain should be establishing joint
objectives in democracy promotion in Venezuela rather than
arguing over arms sales. "We are the eighth largest power in
the world, but (the USG) treats us like a fifth-rate power.
We have no indication that there could be a visit by
Secretary Rice or other high level attention. We want to

SIPDIS
work with you, but need a minimal political signal that you
want to work with us. We need to demonstrate that the
bilateral relations are on track and are not just about what
we are doing in Venezuela and Cuba."

¶7. (C) The Ambassador responded that there could be no
surprise on the part of Moratinos or other Spanish leaders
regarding the USG's decision on the EADS CASA application.
From the beginning, the USG message on the Spanish sales to
Venezuela had been clear, consistent, and frequent. Spain
had made its decision in spite of our objections.
Nevertheless, said the Ambassador, the USG also wished to put
this issue behind us and move forward on a common agenda, as
evidenced by the upcoming visits of WHA A/S Tom Shannon and
Senator Mel Martinez. He also noted Spanish Vice President
de la Vega's expression of interest in visiting the U.S.,
which the Embassy supported. The Ambassador said he agreed
with Moratinos that we could work together to make 2006 a
good year for the bilateral relationship. At this point,
Deputy FM Leon noted that former President Felipe Gonzalez
planned to visit Venezuela at the end of January to talk to
both Chavez and the opposition as part of Spain's democracy
promotion efforts.

¶8. (C) Hours later, the Ambassador met with President
Zapatero and Moratinos in an informal pull-aside at a Royal
Palace reception. They seemed to have digested the news well
and were focused on media portrayal of the decision. The
Ambassador assured them that the USG was not interested in a
negative portrayal of this episode in the media viz-a-viz
U.S.-Spain bilateral relations.

//EVO MORALES VISIT//

¶9. (C) On the visit of Bolivian president-elect Evo Morales,
Moratinos shared his impression that Morales' strengths were
his "honesty and his conscience." However, Moratinos also
described Morales as uninformed and inexperienced. Morales
told Spanish interlocutors that he desired a special
relationship with Spain and did not want to rely solely on
Venezuela and Cuba, but Moratinos expressed concern that
Castro and Chavez' "bear hug" of Morales would continue to
have a negative effect. Moratinos said he had urged Morales
to stop aggravating the USG. According to Moratinos, Morales
asked that Spain convey two messages to the USG on his behalf:

-- Do not implicate him with narcotics trafficking (or by
extension narco terrorism) simply because of his support for
coca cultivation; and,

-- Give him room for manuever with the IMF and the World Bank.

//COMMENT//

¶10. (C) Given President Zapatero's measured response, it
appears that Moratinos overcame his frustration and presented
the issue to Zapatero is a straightforward manner. Overall,
Moratinos has been a positive influence throughout this
episode, despite having to (again) play the role of the loser
in an internal struggle with Bono. Moratinos consistently
scores near the bottom in Spanish public opinion polls while
Bono is among the most popular figures in the cabinet. This
may be due in part to the fact that Bono is a professional
politician, while Moratinos is a career diplomat with little
flair for the spotlight. From our viewpoint, it makes sense
to reinforce Moratinos' positive attitudes, perhaps through a
meeting with the Secretary during Moratinos' visit to the
U.S. in May to participate in the U.S.-Spain Council meetings
in Florida.

AGUIRRE