US embassy cable - 04MADRID2164

UNCLAS SECTION 01 OF 03 MADRID 002164 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, PTER, PREL, ECON, SP, MO 
SUBJECT: AMBASSADOR'S VISIT TO SEVILLE, SOCIALIST HEARTLAND 
 
 
Sensitive But Unclassified.  Please Protect Accordingly. 
 
Summary 
 
1.  (SBU) During the Ambassador's June 3 visit to Seville, 
Andalusia Region President Manuel Chaves told him that 
Spanish President Zapatero seeks "normal, strong" relations 
with the US despite Zapatero's rapid withdrawal of Spanish 
troops from Iraq.   Chaves, a long-time Socialist party 
"boss," stressed that the Popular Party had lost the March 14 
general election because of Aznar's commitment of troops to 
Iraq, not because of the March 11 Madrid terrorist attacks. 
 Looking ahead to the June 13 EU Parliament elections, Chaves 
said that while the Socialists are favored to win, the public 
is apathetic.   A low turnout would boost the Popular Party's 
chances.  The Ambassador also met in Seville with Jose 
Antonio Viera, central government delegate to Andalusia. 
Viera expressed concerns that Islamist terrorists might hide 
among the 2.7 million Moroccans expected to travel through 
Andalusia in July and August.  Andalusian business leaders 
expressed high regard for Second VP and Economy Minister 
Solbes, but were worried that the Zapatero government, as a 
whole, might be bad for business.   End Summary. 
 
Reaching out to the Regions 
 
2.  (SBU) The Ambassador made a one-day visit June 3 to 
Seville, the capital of Andalusia, as part of his program of 
regular travel to Spain's 17 regions.   Andalusia has long 
been a Socialist stronghold, and Socialist former President 
Felipe Gonzalez hails from there.   Andalusia is Spain's 
largest region, both geographically and in population, with 
over 7.4 million inhabitants.   It is also one of Spain's 
poorest regions.   Tens of thousands of rural residents live 
on welfare payments (known as PER) targeted at seasonal 
agricultural workers.  The Socialist government distributes 
the benefits at the local level and this patronage provides 
them with a solid bloc of voters. 
 
Chaves Adamant on Iraq 
 
3.  (SBU) The Ambassador began his visit to Seville with a 
call on Socialist "Baron," Manuel Chaves.   Chaves, President 
of Andalusia since 1990, won re-election to a fourth term on 
March 14 regaining an absolute majority for the Socialists in 
the regional parliament.   The Ambassador congratulated 
Chaves on his victory.   Chaves responded with a commentary 
on Iraq.  He said the withdrawal of Spanish troops from Iraq 
was a political necessity for Zapatero.  Aznar's commitment 
of the troops went against the overwhelming sentiment of 
Spanish society.   The US resort to force in Iraq was a 
mistake.    Zapatero had to withdraw the troops from "Aznar's 
war" since they should never have been there in the first 
place, Chaves said. 
 
4.  (SBU) Chaves stressed to the Ambassador that Zapatero's 
March 14 election victory was due not to the March 11 Madrid 
terrorist train attacks, but to Aznar's involvement in Iraq. 
  If Aznar had not committed Spanish troops to Iraq, the PP 
would likely have won nationally on March 14.   The terrorist 
attacks drew attention to the Iraq commitment, but the 
Spanish public did not vote for Zapatero on the basis of the 
terrorist attacks, Chaves maintained.   What brought the PP 
down was Aznar's decision to implicate Spain in the Iraq war, 
he reiterated. 
 
5.  (SBU) Underlining that he holds the position of national 
President of the Socialist Party (PSOE), Chaves affirmed that 
the Zapatero government wants "normal, strong" relations with 
the US.   He noted that despite the differences on Iraq, 
Spain remains a US ally.  The transatlantic link is vital; 
indeed it is the linchpin of the world order, Chaves stated. 
 He added that both Zapatero and FM Moratinos are committed 
to forging positive relations with the US and were pleased by 
their meeting with Secretary Powell in Madrid in March. 
 
Rota and Moron 
 
6.  (SBU) The Ambassador expressed thanks for the assistance 
the USG receives from the Andalusian government for the bases 
in Rota and Moron.   Chaves raised the issue of the taxation 
of Spanish worker salaries, which the GOS instituted several 
years ago and has resulted in a substantial drop in workers' 
take home pay.    Chaves expressed the hope that the US 
military and the GOS taxation authorities could work out "a 
reasonable solution that is fair to the workers." 
 
Investor Concerns 
 
7.  (SBU) The Ambassador told Chaves he wanted to pass along 
that some business leaders he had spoken with are concerned 
about the economic outlook under the Zapatero government. 
The Ambassador noted that US companies had invested over $50 
billion in Spain in the previous five years and that investor 
confidence was key to keeping that trend going.  Chaves said 
he would pass those concerns on to VP/Economy Minister Solbes 
when they meet the next week.    Chaves stressed that the 
Zapatero government would not change the fundamental 
direction of Spain's recent economic policy and that there 
was no reason for businessmen to be concerned.   The 
appointment of Solbes as Economy Minister was a deliberate 
signal of the commitment of the Zapatero government to a 
responsible economic policy, Chaves said. 
 
June 13 EU Parliament Election: Turnout Key 
 
8.  (SBU) Regarding the outlook for the June 13 EU 
parliamentary election, Chaves said he was uncertain.   Voter 
interest in the EU election is low.   Turnout is likely to be 
especially low since the EU vote comes only three months 
after the intense national elections of March 14.    In 
addition, previous EU parliamentary elections had been held 
in conjunction with other Spanish elections, while this one 
is stand-alone.   Popular Party voters may be more motivated 
than PSOE voters.   The PP certainly hopes this is the case, 
and is working hard to turn its voters out.   On the positive 
side for PSOE, Chaves said, Zapatero is enjoying a honeymoon. 
  The decision to pull the troops from Iraq was highly 
popular. 
 
2.7 Million Moroccans Crossing the Strait This Summer 
 
9.  (SBU) The Ambassador also met with the central 
government's delegate to the Andalusia, Jose Antonio Viera. 
(One of the delegate's primary functions is to coordinate the 
activities of the national police and Guardia Civil in the 
region.)    Viera, who until March was Employment and 
Technology Counselor in Chaves' pre-March 14 government, 
agreed that the June 13 EU parliament election would have 
much lower turnout than the March 14 general election.   He 
added that this was unfortunate, since EU issues directly 
affect Andalusia.   Labor costs in Andalusia have been 
relatively low by EU standards.   However, the expansion of 
the EU largely eliminates the cost advantage of Andalusian 
labor and may encourage some investors to locate in Eastern 
Europe instead.     As a result, Andalusian businessmen must 
now focus on Andalusia becoming a higher value investment 
location, not just a low labor cost location. 
 
10.  (SBU) Viera also discussed Morocco.   He noted that 
during July and August about 2.7 million Moroccans would 
drive through Spain on their way across the Strait of 
Gibraltar to spend the summer vacation with their families. 
Many come from France, Belgium or elsewhere in the EU. 
Viera expressed concerns about the ability of terrorists to 
mix among the travelers.    He said police would step up 
their presence to monitor the Moroccan travelers.   He 
commented that Spain, as Europe's frontier state with 
Morocco, was bearing the brunt of such travel.   Viera said 
the EU must do more to reach out to the Maghreb to fight 
organized crime, terrorism, drug running and immigrant 
smuggling.    Broadening the system for legal guest workers 
is another goal. 
 
11.  (SBU) Regarding the flow of illegal immigrants across 
the Strait of Gibraltar, Viera said that Spain's electronic 
monitoring system was highly effective and enabled Spanish 
police to see the entire coast.   Spain will be adding more 
air patrols to the mix in the next few months to improve 
efficiency.    This is important to cut down on the many 
immigrant deaths that occur in the crossing of the Strait, he 
said. 
 
Businessmen:  Respect for Solbes, But Still Concern 
 
12.  (SBU) The Ambassador also addressed the Andalusian 
Business Confederation.    In the lunch that followed, the 
Andalusian business leaders conveyed a cautious attitude 
toward the Zapatero government's economic policy and the 
potential for a loss of budget discipline.    They also 
expressed worries that, in the wake of the Spanish pullout 
from Iraq, Spanish products might face a backlash by US 
consumers.   Nonetheless, they had high regard for Economy 
Minister Solbes.   Some credited Solbes as being the one who 
started Spain on the path to economic growth when he was in 
Felipe Gonzalez's last cabinet in the mid 1990's.   The 
question, they said, is not Solbes, but whether Solbes can 
prevail over others in the Socialist government who do not 
share his philosophy. 
13.  (U) In addition to meetings, the Ambassador was 
interviewed by various regional media.   Press coverage was 
favorable. 
ARGYROS