US embassy cable - 04MADRID750

C O N F I D E N T I A L SECTION 01 OF 02 MADRID 000750 
 
SIPDIS 
 
DEPARTMENT FOR EUR/RPM AND EUR/WE 
OSD FOR I. BRZEZINSKI 
USNATO FOR JUHL, WRIGHT AND WELLS 
 
E.O. 12958: DECL: 03/04/2014 
TAGS: MOPS, PREL, PGOV, SP, NATO, Defense and Political 
SUBJECT: DASD BRZEZINSKI DISCUSSES NATO NON-FUNDING OF 
SPANISH AIR DEFENSE WITH MOD OFFICIALS 
 
Classified By: Political Counselor Kathleen M. Fitzpatrick for reasons 
1.4 (A), (B) and (D) 
 
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Summary 
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1.  (C) Deputy Assistant Secretary of Defense (DASD) for 
European and NATO policy Ian Brzezinski met February 26 with 
Ministry of Defense officials in Madrid to discuss the NATO 
Security Investment Program,s (NSIP) funding of Spanish air 
defense systems and Spain's blockage of NATO infrastructure 
projects at both U.S. bases in the CONUS and Aviano Air Base, 
Italy.  The U.S. side rolled out its new &over and above8 
eligibility policy that updates the criteria for providing 
NATO common funding for portions of national air defense 
systems.  The Spanish agreed that this new policy should be 
applied to NATO,s future Air Command and Control System 
(ACCS) but not to the current NATO Integrated Air Defense 
System (NATINADS).  Spain asserted, inaccurately, that NATO 
had approved funding of approximately 50 million euros for 
Spain's air defense systems before the "over and above" 
policy was put in place.  NATO should therefore fund this 
amount for Spain's air defense systems. 
 
2.  (C) DASD Brzezinski replied saying the U.S. greatly 
appreciates Spain's contributions as a close ally. 
Nonetheless, the over and above policy was in effect before 
Spain's system requirements were submitted for NATO 
consideration and at any rate, the NATO Security Investment 
Program (NSIP) could no longer afford to fund air defense 
systems to the extent Spain wished.  If NATO did so, the NSIP 
would not have funds for higher-priority projects essential 
to NATO Transformation.  Spain agreed to consider an initial 
mutual un-blocking of some NSIP projects as a first step 
toward resolving the impasse, and Brzezinski agreed the U.S. 
would take another look at whether any portions of Spain's 
air defense system warranted NATO funding within the over and 
above limitation.  End summary. 
 
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GOS: Fund Air Defense Retroactively 
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4.  (C) Jimenez-Ugarte laid out Spain's position:  Spain gets 
only 40 cents for every dollar it contributes to NATO and has 
been proud to be an ally that "has not made substantial 
financial demands on the Alliance8.  Spain, he said, was 
only asking for NATO to fund 20 percent of its "NATINADS" 
radar system, which amounted to approximately 50 million 
euros.  Spain had funded or will fund the remaining 80 
percent.  Spain did not disagree with the U.S.'s "over and 
above" policy, but believed the U.S. decided to apply the 
rule after NATO had already approved Spain's radar system. 
The rule should therefore not apply to Spain's air defense 
projects.  He said Spain would have a difficult time lifting 
the Aviano blocks if the parties could not reach a compromise 
on Spain's air defense system. 
 
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DASD Brzezinski: NATO Cannot Exhaust NSIP Funding on ACCS 
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5.  (C) DASD Brzezinski emphasized the U.S. greatly 
appreciates Spain's contributions to the War on Terror, in 
the Balkans and in Iraq and is proud that Spain is one of our 
closest allies.  He said, however, that Spain's blockage of 
Aviano infrastructure projects in the NSIP was inhibiting 
NATO transformation and was a growing irritant in relations. 
He noted that the "over and above" policy was not new and the 
U.S. had long said NATO should only fund air defense systems 
beyond national requirements.  Aside from that, times had 
changed since Spain first requested funding for its air 
defense system in the late 1990s, and  NSIP simply could no 
longer afford to fund members' air defense systems beyond the 
over and above principle.  If NSIP funded more for air 
defense systems, the budget would hemorrhage as other 
countries would insist on the same treatment. Funding would 
not be available to pay for higher-priority NSIP projects 
such as new satellite communications, missile defense, NATO 
enlargement, Airborne Ground Surveillance, creating 
deployable Combined Joint Task Forces, and implementing the 
new command structure, all of which are estimated to cost 3.5 
billion euros. Responding to Spain's concern that it was 
paying more than it was receiving in NATO funds, DASD 
Brzezinski stressed that, over the next five years, Spain 
would be the beneficiary of approximately 800 million euros 
of NATO and U.S. funding destined for infrastructure projects 
supporting ACCS, Rota Naval Base, and the new HQ LANDSOUTH. 
 
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Steps Toward Resolving Impasse 
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6.  (C) After further discussion, DASD Brzezinski suggested 
the parties take a first step toward resolving the impasse by 
mutually lifting blocks on relatively small-scale projects: 
The U.S. would lift blocks related to Rota Naval Base and 
several other bases worth about 2.4 million euros, if Spain 
lifted un-blocked projects in the CONUS worth about 2 million 
euros.  Brzezinski also said the U.S. would take another look 
at Spain's unfunded air defense projects and the associated 
cost estimates (once Spain provided more detailed, "Type B" 
estimates) to determine if the NSIP could fund additional 
sums while still staying within the over and above 
parameters.  The meeting ended on a positive note. 
 
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SFOR/Bosnia 
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7.  (C) In a brief pull-aside, Jimenez-Ugarte told Brzezinski 
Spain agreed SFOR should terminate by year's end with a 
follow-on EU force taking its place.  The GOS agreed that the 
EU force should reinforce the Berlin Plus principles, that 
DSACUER would have operational command, develop operational 
plans and carry out force generation, and AFSOUTH would be in 
the chain of command. Brzezinski emphasized the change in 
forces was not simply a re-flagging exercise -- the EU force 
would be different from SFOR and would focus on civil order 
and law enforcement functions.  The EU force would have a 
heavy police composition. Jimenez-Ugarte agreed with this 
formulation. 
 
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The Delegations 
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3.  (C) DASD Brzezinski was accompanied at the meeting by 
Clarence Juhl, Deputy Defense Advisor, USNATO; David Wright, 
Director of Infrastructure and Logistics, USNATO; El Wells, 
Assistant for NATO ACCS, USNATO; Anthony Aldwell, Senior 
Analyst, OSD/NATO Policy; and the Embassy's Pol-mil Officer, 
Defense Attache and Assistant Air Attache.  The Ministry of 
Defense's (MOD) Secretary General for Defense Policy, Javier 
Jimenez-Ugarte, headed up the Spanish side.  He was joined by 
Gen. Felix Sanz, Deputy Director General for International 
Relations, MOD; Adm. Enrique Perez, President of the Spanish 
component of the Hispano-American Permanent Committee on 
Defense Cooperation; Capt. Antonio Hernandez-Palacios, MOD 
Chief for NATO and European Union Issues; Lt. Col. Victor 
Pastor, NATO Department, MOD; Concepcion Figueroa, Ministry 
of Foreign Affairs; and three representatives from Spain's 
mission to NATO. 
 
8. (U) DASD Brzezinski has cleared this cable. 
ARGYROS