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RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
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DE RUEHMD #0098/01 0321058
ZNR UUUUU ZZH
R 011058Z FEB 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 4164
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHUB/USINT HAVANA 0245

UNCLAS SECTION 01 OF 05 MADRID 000098

SIPDIS

SENSITIVE
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E.O. 12958: N/A
TAGS: OREP PREL ECON EFIN ETRD ENRG EINV SP
SUBJECT: CODEL MARTINEZ JANUARY 10-11 VISIT TO MADRID

¶1. (U) Summary: Codel Martinez had a busy and productive
visit to Madrid January 10-11, 2008, meeting with the Prince
of Asturias, Popular Party (PP) presidential candidate
Mariano Rajoy, National Security Advisor Carles Casajuana
(septel), former President Aznar, Foreign Minister Moratinos
(septel), and Cuban dissidents Hector Palacios and Gisela
Delgado. The Ambassador accompanied Senator Martinez in all
of his meetings. Codel Martinez also attended a lunch
organized by the American Chamber of Commerce where
discussion focused on renewable energy and a dinner with the
U.S.-Spain Council hosted by the Ambassador. In addition,
Senator Martinez gave an interview to El Pais newspaper.
Senators Grassley and Thune met with a senior official at the
Ministry of Industry, Tourism, and Trade to discuss U.S. pork
exports. End Summary.

Prince of Asturias
------------------

¶2. (SBU) Shortly after their arrival January 10, Senators
Martinez, Grassley, Thune, and Craig were received by the
Prince of Asturias at Zarzuela Palace. The Prince stressed
the importance for Spain of maintaining excellent relations
with the U.S. and his commitment to improving those
relations. The Prince reminisced happily about his travels
in the U.S. and expressed a great fondness for the country.
He had clearly been following the U.S. Presidential primaries
and sought the Senators' views on the process.

Mariano Rajoy
-------------

¶3. (SBU) The delegation met at PP headquarters with
presidential candidate Mariano Rajoy. Rajoy noted that with
less than two months to go before the Spanish general
elections, the polls showed him in a tie with Zapatero and
his Spanish Socialist Workers, Party (PSOE). Rajoy said his
campaign would focus on the economy, nationalism, and
terrorism. On the economy, he said polls showed it to be the
number one issue. Rajoy said Zapatero had lived for four
years off the inheritance of the previous PP,s government's
good economic management. Rajoy said the macroeconomic
indicators were still good, but people were beginning to feel
the pinch of inflation running above the EU average. He also
said interest rates were rising, a serious worry in a nation
of 44 million with eight million mortgages. Rajoy said
Zapatero had not defended Spain, the oldest national identity
in Europe, from the demands of radical regional groups with
nationalistic aspirations. On terrorism, Rajoy contrasted PP
firmness with Zapatero,s attempt to negotiate with ETA.

¶4. (SBU) In foreign policy, Rajoy said he would defend
democracy, freedom, human rights, and Western values. He
said Spain (and Europe) needed the best possible relationship
with the U.S. Rajoy noted Spain had once been a reliable
ally of the U.S. He promised that as President he would
speak his mind and avoid surprises. Rajoy said Spain should
play a significant role in Latin America and should promote
democracy, freedom, and human rights in the region, which was
suffering some unacceptable leaders at the moment. He said
the PP position regarding Venezuela was well known: populism
was not the direction the people of Latin America were
moving. He expressed strong disagreement with Zapatero,s
Cuba policy and voiced concern over treatment of dissidents
in Cuba. Rajoy noted Spain,s position on Cuba was important
within the EU. Rajoy insisted he would fulfill Spain,s
commitments abroad, which would be in defense of Western
values. He said it was difficult but the public would
understand the need for overseas engagement if the problems
were explained to them. He said Spain would continue in
Afghanistan, and noted the while in opposition the PP had
supported sending troops abroad. Rajoy said the PP opposed
Spain,s 2004 withdrawal from Iraq, which he characterized as
a mistake, albeit one that won the PSOE votes.

¶5. (SBU) Although he did not indicate he would make it a
campaign issue, Rajoy noted Spain was number two in the world
behind the U.S. in terms of the numbers of immigrants
received. Over ten percent of the population was of foreign
origin, and there was a large Muslim immigrant population.
He said immigration was beginning to cause problems, as
ordinary Spaniards saw their access to social services
affected (he mentioned public health was 40 percent of
Spain,s budget). He said the PP was against illegal
immigration and in favor of orderly migration flows. He
condemned Zapatero,s amnesty for nearly one million illegal
immigrants, saying it had drawn new immigrants and noted that
migratory pressures from Africa were only increasing.

¶6. (SBU) Rajoy mentioned that while Minister of Interior he
was the first European minister to visit the U.S. after the

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9/11 attacks. He said the West needed to invest more
resources in educating people about democratic values. He
criticized the Zapatero government,s Alliance of
Civilizations (AOC) effort, saying it was an electoral ploy.
He said the left wing in Spain and elsewhere tried to use the
popular media and entertainment figures to convince people
that they favored peace while center right parties such as
the PP in Spain favored war. He said this had to be
countered through education.

¶7. (SBU) Asked about voter turnout, Rajoy said this was a big
unknown. He said in 2000 the PP won an absolute majority in
Congress. In 2004, they lost by about five percent because
Zapatero was able to mobilize socialist voters using the Iraq
war and the Atocha bombings. He characterized 2004 as a vote
against the PP rather than for the PSOE. Rajoy predicted the
anti-PP vote would not be there this year. He said the PP
base was very loyal and would vote, so the question was many
socialist actually turned out. He noted in 2004 polls should
him eight points ahead the day of the Atocha bombings, and he
lost by five points the following Sunday. Rajoy noted that
the polls in the 2007 municipal elections predicted PP
defeat. In fact, the PP won. He said turnout and loyalty
were key. He claimed polls showed 85 percent of PP voters
were loyal but only 72 percent of PSOE voters. He said his
strategy was to reach out to the center and the opposition
rather than to his base. He said this was to avoid
mobilizing the PSOE base and increasing their turnout. Rajoy
mentioned that convincing the media which supported the PP to
avoid antagonizing the left was a challenge. Noting he had
been campaign manager both times, he noted Aznar,s 1996
campaign was aggressive whereas in the even more successful
2000 campaign the PP had behaved like nuns. Rajoy said the
costs of campaigning in Spain were negligible compared to the
U.S. He said in Spain, as opposed to the U.S., it was
important not to let people know how much money you had
raised since voters would turn against the candidate with the
most money. He noted the parties were prohibited from buying
advertising until the last two weeks, and so they had to earn
media coverage in the meantime and were heavily focused on
the internet, which he said was the only way to reach young
voters. He said the party was commissioning two polls a
month and would move to daily polling in the last two weeks
(Rajoy joked that after long and intensive study of the
science of polling he had concluded he knew nothing about
polls). He said most of the PP money would be spent on radio
and billboard advertising. He noted he was on the trail four
out of every seven days. Rajoy said the debates, scheduled
for February 25 and March 3, could be decisive since they
came so late in the process. He mentioned that the PP was
also hitting family issues, noting the PSOE favored gay
marriage. Rajoy said there were 1.5 million absentee voters,
a number he said was significant in terms of the Spanish
electorate. He recalled that in a recent election the PP had
lost a seat in Galicia because Hugo Chavez had sequestered
the mail from Venezuela, which Rajoy was sure contained a
heavy PP vote since Spaniards there were unhappy with the
PSOE,s failure to stand up to Chavez. Rajoy mentioned the
PP had an office in Washington and their representative there
was part of the party,s governing committee. He also sought
the Senators, views on the U.S. Presidential campaign.

Jose Maria Aznar
----------------

¶8. (SBU) On January 11 CODEL Martinez held a wide-ranging
discussion with former Spanish President Jose Maria Aznar
that touched on the electoral outlook in Spain and the U.S.,
as well as Aznar,s strong opinions on Kosovo, Turkey, and
the Alliance of Civilizations. President Aznar told the
CODEL that he held real reservations about Kosovo's
independence, concerns he mentioned he had conveyed to
Senator Lieberman the night before. Aznar said he believed
international acceptance of a unilateral declaration of
independence (UDI) would lead to three undesirable results:
the de facto acceptance of changed borders in Europe as a
consequence of "blackmail;" the establishment of a principle
of self-determination that would have ramifications in Spain,
Italy, Turkey, Iraq, and other states with minority
populations; and the rise of nationalism on the European
continent. Aznar said he feared the explosive mixture of
nationalism and changing borders and would prefer Kosovo
remain a protectorate for the next century rather than have a
UDI be accepted by much of the international community.

¶9. (SBU) Aznar opined that Turkey's EU bid was impossible at
present and would continue to be so for perhaps the next 15
years. The former president said that while Europe should
certainly look to forge and maintain a special relationship
with Turkey, it was hard for him to imagine a Muslim-majority
country fitting into a Europe of Christian roots. He said

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that EU and U.S. leaders needed to consider just what the
Turkey factor would mean to Europe with the addition of 100
million Muslims.

¶10. (SBU) Aznar voiced skepticism regarding the AOC. He said
during his term in office he visited Iran and worked closely
with former Iranian President Khatemi to establish a dialogue
of civilizations, but that he could not see the desirability
or feasibility of forming an alliance with figures such as
Supreme Leader Khamenei. Aznar said that the AOC was not in
the best interests of the West. He mentioned that he
maintains good relations with Turkish President Erdogan and
claimed to have it on good authority that Erdogan was taking
an active role in Zapatero,s AOC not because he necessarily
believed in it, but because he hoped it would help Turkey,s
EU bid.

¶11. (SBU) Aznar concluded the meeting with a discussion of
the role of his think tank, the Foundation for Social
Analysis and Studies (FAES). He said that FAES was set up in
the European liberal tradition and was intended to defend the
values of the western world and an Atlantic policy. FAES
seeks to strengthen the U.S.-EU pillar and believes that an
Atlantic Europe is the only possibility for the continent.

Renewable Energy
----------------

¶12. (U) At a lunch on renewable energy hosted by the
American Chamber of Commerce, the Senators and Spanish
companies discussed the status of several forms of renewable
and low-emission energy. Ambassador Aguirre and AmCham
president Jaime Malet opened with remarks describing Spanish
and U.S. leadership in the sector and emphasizing the amount
of Spanish investment in renewables projects in the U.S.
Ambassador Aguirre described the February renewable energy
trade and investment mission post is organizing with the GOS
to bring Spanish government officials and companies to the
U.S. Senators Grassley and Thune discussed biofuels, which
Senator Grassley noted were likely to shift away from the
present emphasis on corn-based ethanol to cellulose-based
ethanol after the next 5-10 years. Senators Grassley and
Thune explained their states, favorable location for wind
power (Iowa has Spanish investment in both wind farms and a
wind turbine manufacturing plant), while Senator Martinez
noted that the U.S., geographic variability meant that an
identical national renewable portfolio standard for each
state would be unfair to states such as Florida that lacked
commercially viable quantities of wind. Senator Craig and
Ambassador Aguirre emphasized the importance of technological
advances in addressing energy dependence and climate change.
Senator Craig described U.S. climate change policy, outlined
the U.S. national energy laboratories, role in technological
research, and reviewed issues related to nuclear and clean
coal technology. Spanish company representatives described
Spain,s system of incentives for electricity from renewable
sources (Spain,s system is based on guaranteed prices, while
U.S. incentives are mainly tax-related) and expressed
interest in investment opportunities in the U.S. in
electricity transmission as well as generation. Participants
from both countries emphasized the importance of encouraging
renewable energy as an alternative to dependence upon
hydrocarbon imports from undemocratic suppliers.

Cuban Dissidents
----------------

¶13. (SBU) Senators Martinez and Craig, joined by the
Ambassador and Deputy Chief of Mission, met January 11 with
Cuban dissidents Hector Palacios and his wife Gisela Delgado.
Palacios briefed the Senators on his personal situation
saying he had been released from jail at the petition of the
Spanish Government in order to come to Spain to receive
medical treatment. While appreciated Spain,s help, he did
not agree with Spain,s policy of engagement with the Cuban
regime or with gestures such as the 2007 Moratinos visit to
Cuba. He said he and his wife had made public statements
critical of Spanish policy and as a result the Spanish had
cut his per diem allowance and moved him to a cheaper hotel.
He said Moratinos had not seen him and instead he dealt with
the Director General for Iberoamerica.

¶14. (SBU) Palacios said political control in Cuba was
fragmenting into three or four different groups. Fidel had
been the glue that held it together. Each group had a
somewhat different agenda their common goal was to stay in
power. Palacios said Cuba was ripe for change. He said the
military would not be a major obstacle once change began
because conscription meant that the military reflected the
people. Also, Fidel,s policy of rotating troops regularly
underneath their officers had had its intended effect of

MADRID 00000098 004 OF 005


preventing the formation of units personally loyal to their
commanders. He said a greater problem would the large system
of repression Fidel had created (the Ministry of Interior,
neighborhood committees, bands of thugs who attacked and
intimidated dissidents). There were about 200,000 people in
this system and they were the ones who lived well and who had
a great deal to lose. Even those within government would
find these people a formidable obstacle if they tried to
promote change.

¶15. (SBU) Palacios said U.S. assistance was not reaching the
dissidents. He noted the irony of being jailed as an agent
of U.S. imperialism when the actual amount of USG funding was
minimal. He said they ran into problems doing things as
simple as finding the small amounts of money needed to bring
dissidents from one part of the island to another to attend
demonstrations. He said he planned to travel to Washington
and Miami soon and intended to raise this issue in both
places.

National Security Advisor Casajuana and Foreign Minister
Moratinos

--------------------------------------------- -----------------

¶16. (SBU) Senators Martinez and Craig (joined by Senator
Lieberman) met January 11 with Carles Casajuana and discussed
Afghanistan, Lebanon, Morocco, Cuba, and the AOC. Also on
January 11, Codel Martinez met with FM Moratinos where the
conversation touched on Afghanistan, the Middle East peace
process, Syria, Venezuela, Cuba, and the AOC. Both meetings
are reported via septels.

Agricultural Trade Issues
-------------------------

¶17. (SBU) On January 11, Senators Charles Grassley and John
Thune, together with the Deputy Chief of Mission, AgCouns and
EconOff, met with the Ministry of Industry, Tourism and
Trade,s Secretary of State for International Trade, Pedro
Mejia, and Secretary General Alfredo Bonet. Senator Grassley
emphasized the importance of science-based decisions in the
agricultural biotechnology context. Mejia said that Spain
had a relatively "liberal" view with respect to
biotechnology. However, even in Spain the technology was
controversial and faced NGO opposition, albeit not as strong
as in some other EU member states. Senator Thune asked what
influence Spain could exercise in Brussels on this issue.
Bonet noted it was very difficult to get a qualified majority
for biotech approvals in the EU Environment Council so in the
end the Commission was taking decisions in favor of
biotechnology. Both Mejia and Bonet noted that commodity
price hikes might spur greater liberalization on biotech
imports. The Secretary of State asked about the status of
the proposed elimination of the "splash and dash" tax credit
loophole that allows biodiesel producers in the U.S. to
import commodities such as soybeans, add a minimal amount of
petroleum diesel, and then reexport the biodiesel. European
producers have complained about these imports. The Senator
promised to get back to the Secretary of State on the status
of the proposed elimination of the loophole. Mejia said that
he was pessimistic about the prospects for Doha because major
developing countries were not willing to give sufficiently in
terms of industrial and services market access; he emphasized
especially Spain,s interest in better services access. He
noted also that with high agricultural commodity prices, some
developing countries now did not see why they should give on
industrial goods and services access. He said that the U.S.
was still under pressure to do more on domestic agricultural
support. Spain's senior trade representative asserted that
the EU had made a good agricultural access offer. The
Senators expressed support for Doha but were pessimistic
about getting support for Trade Promotion Authority (TPA)
this year. Finally, there was a lively discussion of
Secretary of State Mejia's February energy renewables trip to

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the U.S. Both Senators Grassley and Thune were very
interested in the mission. (Comment: This was a very good
substantive discussion. However, it is clear that while
Spain will continue sometimes to vote in favor of
biotechnology liberalization proposals, the Spaniards will
tread warily on this issue given their own domestic
sensitivities and other equities Spain has in the EU. It was
interesting to hear Mejia,s strong emphasis on services as
the future of Spain,s economy. Unfortunately, Spanish
services companies have not been aggressive in promoting
Doha, although this is true of many other services companies
in Europe as well. End comment.)
Press Coverage
--------------

¶18. (U) ABC, EFE, Europa Press, and El Pais reported on the

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visit. El Pais published January 14 an interview with
Senator Martinez focused on the U.S. elections, the Middle
East peace process, and the need for democratic change in
Cuba.

¶19. (U) Senator Martinez cleared this cable.
LLORENS