US embassy cable - 05MADRID2359

C O N F I D E N T I A L SECTION 01 OF 04 MADRID 002359 
 
SIPDIS 
 
E.O. 12958: DECL: 06/16/2015 
TAGS: PGOV, PTER, SP, Basque Region 
SUBJECT: ZAPATERO AND THE BASQUE PROBLEM: A HIGH STAKES 
GAMBLE 
 
Classified By: Political Counselor Kathy Fitzpatrick; reason 1.4 (D) 
 
1. (C) Summary.  In one of his most dramatic gestures since 
taking office last year, President Jose Luis Rodriguez 
Zapatero recently requested Parliamentary approval for direct 
government negotiations with the Basque terrorist group ETA, 
if ETA agrees to abandon the armed struggle.  This was the 
latest measure in a two-pronged Zapatero strategy intended to 
demonstrate a clean break with Aznar's hard-line approach 
towards the Basque issue.  The first element is aimed at 
ending ETA's 30-year terrorist campaign.  The second element 
of the strategy is a political effort to hijack elements of 
the Basque nationalist platform in order to weaken mainstream 
Basque nationalist parties and increase the Socialists' 
strength in the region.  Zapatero's Socialist (PSOE) 
government has offered to renegotiate the statute governing 
the Basque Region's relationship with the central government 
and opted not to challenge the participation in Basque 
elections of a small party acting on behalf of ETA front 
group Batasuna.  Zapatero is motivated both by the prospect 
of potentially becoming the leader who finally succeeds in 
ending ETA violence and by his desire to isolate the 
opposition Popular Party (PP), the only party to oppose his 
peace overture to ETA, and to sideline the moderate Basque 
Nationalist Party (PNV).  His concessionary approach towards 
both ETA and to legitimate Basque nationalist parties is a 
risky proposition, since even some members of Zapatero's 
cabinet are skeptical of any expansion of the Basque Region's 
powers and prefer a hard line approach to dealing with ETA. 
The PP and the "Association of Victims of Terrorism" have 
bitterly denounced Zapatero for extending an olive branch at 
a time when ETA has shown no signs of ending its violent 
course.  A series of ETA attacks since Zapatero's peace offer 
could make opposition criticism resonate with a broader 
sector of the Spanish population and Zapatero's tolerant 
approach to the Basque issue in general represents a 
significant political vulnerability at the national level. 
End Summary. 
 
//PEACE OVERTURES// 
 
2. (C) Since taking office, Zapatero has extended his 
trademark emphasis on "dialogue" to the Basque issue.  Early 
in his tenure, he met with Basque Region leader Juan Jose 
Ibarretxe, a clear break with former President Jose Maria 
Aznar's refusal to meet with Basque Government or PNV leaders 
and a symbolic gesture of Zapatero's willingness to 
negotiate.  Zapatero took additional concrete measures in the 
first half of 2005 that gave substance to his peace 
initiative, including: 
 
-- Acceptance of the participation of the "Communist Party of 
the Basque Lands," (EHAK) a suspected cover for ETA 
front-group Batasuna, in April 17 Basque regional elections. 
GOS officials insist that they did not have enough time or 
evidence to prevent EHAK's participation in the vote, but 
Batasuna's overt support for EHAK led many observers to 
speculate that the GOS could have disrupted EHAK, but chose 
not to in order to avoid alienating Basque nationalist voters. 
 
-- On April 21, Zapatero won Parliamentary support for a GOS 
measure overturning Aznar-era legislation mandating jail 
terms for anyone who convoked an "illegal referendum," a law 
aimed at preventing the Basque Government from organizing a 
popular referendum ("Plan Ibarretxe") on whether to modify 
the Basque autonomy statutes.  This was interpreted as a sign 
of GOS good will by the moderate PNV, but criticized by the 
PP and others as opening the door to demands for ever-greater 
regional independence from Madrid. 
 
-- On May 17, Zapatero won the support of all parties except 
the PP for his proposal to engage in peace talks with ETA if 
ETA agreed to abandon the armed struggle.  ETA victims groups 
and PP politicians suspect that secret GOS-ETA talks are 
already underway, an assertion vigorously denied by the 
Zapatero government.  Talks with ETA would not be unusual; 
every Spanish administration since the democratic transition 
has made contact with the terrorist group.  The difference in 
this case is that the major opposition party is against any 
discussions with ETA, placing greater pressure on the GOS to 
produce results. 
 
3. (C) Zapatero holds in reserve additional incentives to 
draw ETA into negotiations, measures he has not yet deployed, 
including: 
 
-- Releasing ETA prisoners who have served three-quarters of 
their prison sentences or who have health problems.  This 
group would account for approximately 85 ETA inmates.  (NOTE: 
The total number of ETA members in jail is 713, distributed 
as follows: Spain - 551; France - 153; Belgium - 2; UK - 1; 
Quebec - 1; Mexico - 5.  END NOTE.) 
 
-- Transfer all ETA prisoners to the Basque Region near their 
families rather than continuing the current practice of 
distributing them in prisons throughout Spain. 
 
-- Release non-violent ETA prisoners (logistical support 
teams) with the understanding that they will leave Spain for 
other countries and not resume their pro-ETA activities. 
 
-- Allowing ETA prisoners to take courses through the 
University of the Basque Country, course work which counts 
towards sentence reductions. 
 
These additional steps would be highly unpopular outside of 
the Basque Region unless accompanied by reciprocal overtures 
from ETA.  The sensitivity of this issue was highlighted by 
the firestorm touched off recently by a separate judicial 
decision confirming the impending release of ETA terrorist 
Ignacio de Juana Chaos after completing 18 years of a 30-year 
prison term for his role in 25 murders.  Though the timing of 
the decision was curious, most observers do not believe this 
decision is connected to Zapatero's overtures to ETA.  The 
GOS insisted that it would challenge Chaos' release and 
tighten oversight of ETA prisoners to ensure that they were 
not receiving undue sentence reductions. 
 
//ETA VICTIMS REACT ANGRILY// 
 
4. (C) Zapatero's strategy towards ETA has met with stiff 
resistance from both the PP and ETA victims organizations. 
These groups contend that Zapatero revitalized ETA just as 
the terrorist group was reeling from French and Spanish 
detentions of senior ETA leaders, including the arrest of the 
group's nominal leader, Mikel Antza, in October 2004. The 
most visible rejection of Zapatero's Basque policy was a June 
4 mass demonstration organized by the "Association of Victims 
of Terrorism" (AVT) and attended by the PP leadership, 
including former President Aznar.  Socialist representatives 
pointedly refused to take part in the March, though Zapatero 
subsequently agreed to meet with victims rights organizations 
to hear their views.  Though the PP continues to lose ground 
to the PSOE on social issues, its opposition to Zapatero's 
Basque policy sets the stage for the PP to take advantage 
should Zapatero's approach fail to draw ETA into productive 
negotiations. 
 
//ETA RESPONDS TO ZAPATERO WITH SHOW OF FORCE// 
 
5. (C) ETA has not made it easy for Zapatero.  On June 16, 
ETA released a statement through the Basque daily "Gara" 
attacking the Zapatero government for continuing police 
activities against ETA (which ETA terms GOS "repression") and 
expressing confidence that the government's anti-terrorist 
policies and illegalization of ETA front group Batasuna had 
failed.  The ETA statement, widely perceived as ETA's 
official response to Zapatero's various overtures, suggested 
that ETA was open to discussions, "dialogue, and 
negotiation," but made no mention of abandoning the armed 
struggle and demanded that negotiations lead to 
"self-determination for the Basque Region."  Instead, ETA 
claimed responsibility for nine recent terrorist attacks, 
including four since Zapatero's offer to engage in peace 
talks.  Though no people have been killed in these incidents, 
ETA's car bombing in Madrid and mortar attack against 
Zaragoza Airport could easily have resulted in casualties. 
Just as ominously, ETA-supported street violence ("kale 
barroka") is on the upswing after years of decline, with 138 
attacks so far in 2005 compared to 86 attacks in the same 
period last year.  Such shows of force are typical ETA 
maneuvers for demonstrating its military capacity in advance 
of discussions with the GOS, but they also vindicate those 
who strenuously oppose negotiations and favor an aggressive 
police/judicial solution to the ETA problem.  Zapatero may be 
disappointed by ETA's response, but is probably not surprised 
since it fits a historical pattern.  Some observers have even 
speculated that Zapatero was banking on ETA's violent 
response and believed it would further discredit the 
organization, but it seems unlikely Zapatero would 
consciously accept the risk of dramatic new attacks for so 
little gain. 
 
//ZAPATERO SIDELINES DOMINANT BASQUE NATIONALIST PARTIES// 
 
6. (C) Zapatero's moves take place against the backdrop of a 
rapidly shifting political landscape in the Basque Region. 
Prior to EHAK's assumption of the Batasuna platform during 
the March/April campaign for the Basque elections, the PNV 
appeared poised to win outright control of the Basque 
Parliament.  The PNV portrayed the elections as a virtual 
plebiscite on Basque government leader Juan Jose Ibarretxe's 
plan to hold a referendum on Basque autonomy in defiance of 
the central government's rejection of any such referendum. 
Ultimately, however, Zapatero succeeded in undermining 
nationalist passions by projecting a willingness to negotiate 
on the Basque Region's relationship with the national 
government.  Worse yet for the PNV, EHAK's appearance split 
the nationalist vote and gave an option to radical 
nationalists who might otherwise have voted to support 
Ibarretxe's more moderate vision.  PNV politicians are 
convinced Zapatero deliberately avoided action against EHAK 
in order to deny the PNV the radical nationalist vote and 
thereby prevent a PNV majority in the Basque Parliament. 
 
7. (C) As the Basque Parliament prepares to elect a new 
"Lehendakari" (Basque Regional president) on June 22, the 
PNV's relative decline has become readily apparent. 
Opposition parties refused to endorse the PNV's choice for 
Parliamentary leader, forcing the PNV to select a new 
candidate.  For the first time since the early 1990s, the 
PSOE is in a position to make a credible bid for leadership 
of the Basque government.  In order to secure the 
Lehendakari's office, Ibarretxe and the PNV will have to bank 
on the support of radical EHAK parliamentarians, undermining 
the credibility of the PNV at the national level.  The Basque 
PP, once the most powerful opposition force, is now in third 
place behind the PSOE.  PSOE outreach to Basque nationalists 
and calls for dialogue have kept the PP on the defensive and 
forced the PP to assume positions that seem radical and 
distasteful to the Basque electorate.  At the moment, the 
PSOE has the initiative in Basque politics. 
 
//HIGH RISK, HIGH REWARD// 
 
8. (C) Socialist contacts tell us that Zapatero has several 
motives for pursuing a high-profile peace effort in the 
Basque Region.  First and foremost, Zapatero believes that 
ETA is weaker than at any point in its history and, despite 
bluster to the contrary, can only negotiate from a weak 
position.  PSOE sources acknowledge that political 
considerations are also important; Zapatero's moderate, 
inclusive tone has played well in the Basque Region, 
strengthening the regional PSOE while isolating the hard-line 
PP from other political groups.  Zapatero is also driven by 
the possibility that he could become the Spanish leader who 
finally brings an end to ETA violence, an elusive, historic 
achievement that would strengthen his hand on other issues 
and cement his political legacy. 
 
9. (C) While final victory over ETA is a tantalizing 
prospect, Zapatero's current strategy carries significant 
risks.  His calculation seems to be that Spanish voters are 
tired of ETA violence and are not particular about how peace 
is achieved.  This may be accurate at the moment, but if ETA 
resumes killings the public mood would likely harden and 
shift the advantage to those who had advocated a tougher line 
against ETA.  Some observers believe ETA is playing for time 
and will essentially blackmail Zapatero before the 2008 
national elections, threatening violent actions that would 
discredit and embarrass Zapatero unless he offered 
political/legal concessions to ETA.  One journalist who has 
covered ETA for two decades told us recently that ETA and 
radical Basque nationalists feel strengthened and have no 
interest in serious peace talks.  He suggested that ETA's 
political front groups are focused on Basque Region municipal 
elections in 2007, when they believe they can achieve de 
facto control of broad regions of the Basque country and 
nullify Madrid's efforts to illegalize Batasuna and other ETA 
front organizations.  This would prove a major setback for 
Zapatero, given the widespread antipathy throughout Spain 
(outside of the Basque Region and Catalonia) towards Basque 
nationalist aspirations. 
 
10. (C) It is at the national level that Zapatero is assuming 
the greatest risk in adopting a conciliatory stance towards 
ETA and towards moderate Basque efforts to achieve broader 
autonomy.  Even other PSOE leaders, such as Defense Minister 
Jose Bono, favor a centralist model and have little patience 
for negotiating additional rights for a region they already 
see as enjoying unusual privileges.  The corrollary to this 
centralist bent is intense skepticism of any approach towards 
ETA that does not emphasize police action against the group. 
While Zapatero has accumulated significant political capital 
in his first year in office, enabling him to extend an olive 
branch to ETA, his credibility would be seriously damaged by 
a botched attempt to win a peace deal with the group.  If he 
opts to make additional overtures to ETA, such as those in 
para 3, the political risks will increase.  Likewise, any 
revelation that the GOS has engaged in secret talks with ETA 
while ETA continued its bombing campaign, would be damaging 
to Zapatero unless those talks resulted in clear ETA 
concessions.  Despite their overall confidence, Zapatero and 
his advisers are aware of the political risks they are 
incurring and are likely to balance optimism and offers of 
dialogue with high profile arrests and denunciations of ETA 
violence.  That may not be enough to protect Zapatero from a 
backlash at a national level if ETA resumes killings. 
 
MANZANARES