US embassy cable - 04MADRID1122

UNCLAS SECTION 01 OF 02 MADRID 001122 
 
SIPDIS 
 
FOR EUR/WE 
 
E.O. 12958: N/A 
TAGS: PGOV, ECON, ETRD, PREL, SP 
SUBJECT: AMBASSADOR'S OUTREACH TO GALICIA 
 
 
1. Summary: The Ambassador traveled March 30-31 to Santiago 
de Compostela, capital of the northwestern region of Galicia, 
to open the eighth in a series of regional seminars on 
E-Commerce and Internet for small and medium sized firms. 
The Ambassador took the opportunity to meet with President of 
the Galician region and eminent Spanish politician Manuel 
Fraga and President of Galicia's regional parliament Jose 
Maria Leira as well as a group of prominent Galician business 
leaders to discuss economic and political issues.  Neither 
the politicians, both of whom are Popular Party (PP) members, 
nor the business leaders were pleased with the Socialist 
Party victory in the March 14 national elections.  However, 
they said they would work cooperatively with the new 
Administration just as they had the last time the Socialists 
were in office (1982-96).  At the March 31 business seminar, 
the Ambassador highlighted the significant potential for US 
and Spanish firms in the areas of Internet and E-Commerce. 
In his meetings as well as in interviews with local press, 
the Ambassador expressed condolences for the March 11 
terrorist attacks in Madrid and pledged continued cooperation 
in fighting terrorism.  End summary. 
 
2. The Ambassador traveled to the capital of Galicia, 
Santiago de Compostela, to open the eighth in a series of 
regional seminars focused on opportunities for small and 
medium sized companies in E-Commerce and Internet-based 
trade.  This seminar, like the previous seven, was organized 
by the Spanish Employers Association (CEOE) with the 
assistance of the US Commercial Service.  In his 
presentation, the Ambassador highlighted the objectives of 
the seminar: to help Spanish firms to build technological 
bridges with the US, find the latest in US technology and 
promote strategic alliances with US companies.  He pointed 
out the great potential for expanded ties between US and 
Spanish firms in the areas of Internet and E-Commerce.  While 
over 80% of US firms have their own website on the Internet 
and more than 60% of US businesses buy and sell on-line, only 
40% of Spanish companies have their own site and only 11% are 
active on E-Commerce transaction, with most of the purchases 
by Spanish firms and individuals coming from the US (37%). 
The Commercial Service has planned trade missions and other 
trade events designed to bring together small and medium 
sized companies from both countries to get to know each other 
and do business together. 
 
3. The night before the seminar, the Ambassador had dinner 
with a small group of Galician business leaders to ask them 
about the growth prospects for their respective sectors and 
to get their take on the outcome of the March 14 national 
elections.  While all of the participants expressed 
disappointment with the Socialist election victory, they 
expressed hope that President-elect Rodriguez Zapatero would 
surround himself with an experienced, moderate team that 
would keep the economy on track. 
 
4. The Ambassador took advantage of his visit to Santiago de 
Compostela to meet with Galicia President Manuel Fraga. 
Fraga has played a key role in Spanish politics since 1951, 
including service as a minister in the administrations of 
General Franco and the first monarchical government, and as 
President of Galicia since 1989.  He is known as the father 
of the Popular Party, having created its predecessor in 1977 
and served as the first head of the PP. 
 
5. As he did in every meeting, the Ambassador expressed 
condolences for the terrorist attacks of March 11.  Fraga 
said that the terrorists chose the exact moment to have 
maximum effect on the elections, noting that in the aftermath 
of the attacks, many decided voters switched sides and 
undecided voters determined to come out and vote Socialist. 
Had it not been for 3/11, the PP clearly would have won. 
When asked how the Galician government would work with the 
new administration, Fraga harkened back to the 1982-96 
Socialist administration of Felipe Gonzalez when the Galician 
government was concurrently run by the PP.  While support 
from Madrid was easier with the PP in power, "we will work 
with the Socialists now as we did before," he said.  He 
characterized as "reasonable Socialists" Jose Bono, tapped to 
be the new Defense Minister, and Miguel Angel Moratinos, the 
probable future Foreign Minister.  Fraga commented that few 
people in Spain understood President Aznar's Atlanticist 
views, although Fraga himself, the son of immigrants from 
Cuba with family in Latin America, agreed that Spain must 
have strong relations with the Americas. 
 
6. When asked for his views of the outcome of the March 14 
elections, Parliamentary President Jose Maria Leira also 
referred back to the previous Socialist administration and 
stated his intention to work with the Socialists now as he 
did then.  He mused that while governance will be more 
difficult now in some ways, it can actually be easier to make 
demands of the central government when the administration is 
the opposition.  Leira criticized the Socialists' record 
during their last stint in power, saying that unemployment 
and inflation rose while the deficit increased.  The past 8 
years of PP administration brought reduced unemployment and 
inflation as well as a balanced budget.  Leira expressed 
dismay at recent statements by a Socialist leader that the 
new administration might accept at least a short period of 
budgetary deficits.  He listed as challenges for the new 
government improving infrastructure, particularly 
communications, rail and ports. 
 
7. In a one-on-one interview with the local paper "Voice of 
Galicia" and short comments to reporters after his meeting 
with Fraga and his presentation at the business seminar, the 
Ambassador expressed US support for Spain in the wake of the 
March 11 terrorist attacks and pledged continued 
anti-terrorism cooperation.  He also made clear that 
regardless of who leads the Spanish government, the US and 
Spain will continue to be good friends and work together on a 
full range of issues. 
ARGYROS