US embassy cable - 04MADRID2142

UNCLAS MADRID 002142 
 
SIPDIS 
 
SENSITIVE 
 
STATE PASS USTR - JSANFORD 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, EAGR, SP, Popular Party 
SUBJECT: OPPOSITION ECONOMIC SPOKESMAN:  WE'RE WATCHING 
CLOSELY 
 
 
1. (SBU) Summary.  The Popular Party's (PP) Economic 
Spokesman in Parliament Arias told us his party is watching 
closely the development of the Socialist economic policy, 
which he characterized as a work in progress.  He described 
both sides of the political aisle in Spain as strongly in 
favor of a successful Doha Round, though he expected more 
anxiety for Spain on cotton.  Arias found the Socialist 
government's decision to abstain on recent biotech votes as 
encouraging, having anticipated a complete reversal of 
support on biotechnology.  Arias lamented the excellent shape 
in which the PP had left the economy, predicting the economic 
foibles of the new government wouldn't catch up them for at 
least two years.  End Summary. 
 
2. (SBU)  In a brief June 2 meeting, PP Economic Spokesman in 
Parliament (and former Minister of Agriculture and Fisheries) 
Miguel Arias Canetes told us he is watching the formation of 
the government's new economic policy closely and plans to be 
very active in his role as opposition economic spokesman.  Of 
particular concern is the budget, and how the Socialist 
government will implement its many electoral promises while 
maintaining promised fiscal discipline.  "We'll be watching 
closely" said Arias.  He encouraged us to reach out to him 
with any issues of concern regarding legislation in his 
committee. He predicted the Zapatero government would become 
less strident in its "Europe vs. the US" rhetoric after June 
13 European Parilament elections. 
 
3.  (SBU)  Arias described the excellent shape in which the 
Aznar government had left the economy as a gift to the 
Zapatero government.  He predicted the Socialists would have 
at least 18 months to two years of strong economic growth 
before any possible economic repercussions of new policies 
would begin to take effect.  If the economy then started 
taking a turn for the worse, he predicted the government 
would call early elections to ensure they stayed in power for 
another term. 
 
4. (U) Arias predicted that Spain would continue its "helpful 
and supportive" role within the EU pressing to conclude the 
Doha Development Round negotiations.  He took encouragement 
from Commissioner Lamy's letter supporting the elimination of 
agriculture subsidies, predicting the Spanish agriculture 
community would go along with whatever was decided without 
too much noise and difficulty.  He predicted the most serious 
area of concern for Spanish farmers would be cotton. 
 
5. (SBU) To our surprise, Arias took encouragement from the 
recent Spanish abstention votes on biotech events in EU 
bodies.  Arias had anticipated the Zapatero government would 
be ardently anti-biotech.  Arias interpreted the abstentions 
as a sign that the professional staff of the Agriculture 
Ministry was exerting an positive influence. Spanish farmers 
were very pro-biotech.   The professional staff at other 
relevant ministries -- Environment and Health -- were also 
generally pro-biotech.  If the Ministers relied on their 
staffs, he predicted the Zapatero government would continue 
to support biotech, if not as pro-actively as the Azanr 
government. 
 
6. (SBU) Comment: Arias had an air of resignation about him, 
clearing getting used to his small Parliamentarian's office 
and new opposition role.  We found his comments on biotech to 
be encouraging, recognizing that the Spanish interagency 
process has not yet met to decide a formal stance.  The 
appointment on Friday of Jose Ignacio Arranz as the head of 
the Spanish Food Safety Agency is also an encouraging 
development.  We have worked closely with Arranz on biotech 
over the past several years and found him to be generally 
pro-biotech. 
 
ARGYROS