This record is a partial extract of the original cable. The full text of the original cable is not available.

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