VZCZCXRO7165
PP RUEHAG RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ
RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHMD #0766/01 0891417
ZNR UUUUU ZZH
P 301417Z MAR 06
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 9272
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHLA/AMCONSUL BARCELONA PRIORITY 1824

UNCLAS SECTION 01 OF 03 MADRID 000766

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PTER PGOV PREL SP
SUBJECT: ETA CEASEFIRE: MAJOR POLITICAL VICTORY FOR ZAPATERO

REF: A. MADRID 720
¶B. MADRID 707
¶C. OSLO 374

MADRID 00000766 001.2 OF 003


¶1. (U) Summary. The recent announcement of a permanent
ceasefire by the Basque separatist terror group ETA was met
with cautious optimism by a public that recalls ETA's
abandonment of previous truces. However, there is a sense
that ETA's declining military fortunes and Zapatero's
readiness to engage Basque political factions, have convinced
ETA of the need to end violence and shift to the political
arena. Government figures involved in the negotiations
remain tight-lipped about the details of their discussions,
but press reports indicate that Sinn Fein figures played a
role in convincing ETA to shift to the political process and
that Sinn Fein briefed former President Clinton and USG
officials regarding the progess of the ETA talks; a March 30
press report indicated strong interest by former President
Clinton in playing a mediating role. Some ETA-Government
discussions evidently took place in third countries,
including in Norway and Switzerland. The ETA announcement
has proven a major political victory for the Zapatero
government, one that will likely benefit the Socialist Party
through the 2008 general elections. End summary.

//ETA ON THE WANE//

¶2. (U) ETA has killed more than 850 people during its
four-decade-long battle to win self-determination for the
Basque Region, which already enjoys considerable autonomy,
including its own police force, control over tax revenues,
and management of its education system. The terrorist group
benefited from both a strong Basque sense of cultural
identity and from the region's historical grievances against
the Madrid government. However, support for ETA has been
limited by the Basque region's heterogenous political
environment (with about one-third of the electorate
supporting close ties to the central government) and by the
strength of moderate Basque nationalist political groups.
ETA and its political front groups, known as the "abertzale"
or Basque nationalist left, have maintained a core of
approximately 150,000 supporters out of the Basque Region's
population of 2.1 million, a political base strong enough to
play a spoiler, but too small to set the political agenda.

¶3. (U) ETA's military capacity has been in steady decline
since 1990, a trend that has accelerated in recent years.
The combination of Spanish/French police pressure and the
exclusion of ETA front group Batasuna from the political
system (because of its refusal to renounce terrorism) had
greatly weakened ETA by 2004. Most police observers believe
that fewer than 150 ETA terrorists remain at large, while
more than 500 are being held in Spanish and French jails.
The March 2004 Madrid train attacks added complications for
ETA in the form of increased public intolerance of political
violence, even among Basque radical supporters.

¶4. (U) The Socialist (PSOE) victory in 2004 also led to
greatly improved relations between the central government and
moderate Basque political parties, further isolating radical
Basque nationalists. Zapatero hinted, however, that the PSOE
would be open to a greater political role for ETA front
groups if the organization abandoned the armed struggle, an
important signal in advance of key municipal elections coming
up in 2007. Sensing the shift in its political and military
environment, ETA approached the Zapatero government in August
2004 to suggest exploratory discussions.

//MULTIPLE CHANNELS OF COMMUNICATION//

¶5. (U) While the small circle of Zapatero advisers who manage
the ETA peace process have refused to discuss details, press
reports indicate that Zapatero responded positively to ETA's
soundings, authorizing a series of contacts that eventually
led to the March 22 cease fire announcement. It appears that
those discussions were undertaken through intermediaries in
different locations, including in Oslo and Geneva in the
summer of 2005, and that the talks were intended as
confidence building measures rather than to formally resolve
specific issues.

¶6. (U) At the international level, Sinn Fein figures played
an important role in convincing ETA to announce a cease fire
and express support for a political solution to the conflict.
Specifically, Parliamentarians Gerry Kelly and Alex Maskey
have been identified as Sinn Fein "advisers" to ETA, a role
they allegedly took on at the request of Batasuna. According
to the daily "El Mundo," Kelly and Maskey briefed Sinn Fein
leader Gerry Adams, who then reportedly briefed the Irish and
UK governments, as well as U.S. State Department official
Mitchell Reiss and former President Clinton, on the progress

MADRID 00000766 002.2 OF 003


of the talks. According to Spanish daily "El Periodico,"
Spanish government sources report that former President
Clinton contacted Zapatero to offer to act as a mediator in
ETA discussions; the press report said Zapatero was very
interested in involving a "U.S. Democrat with international
prestige" in the peace talks. COMMENT: The Embassy has not
received any such indications from the Spanish government.
END COMMENT.

¶7. (U) While these international contacts were important in
bringing ETA along, the key internal communications began
with a set of conversations between the Basque branch of the
Spanish Socialist Party and Batasuna leader Arnaldo Otegi in
early 2004. Through these discussions (which will be
reviewed extensively in a separate cable), the Zapatero
government signaled its willingness to negotiate with radical
Basques, but only if ETA announced a halt to its terrorist
activities. Batasuna and Basque Socialist leaders agreed
during these talks that ETA would leave political issues to
be handled by "abertzale" (Basque leftist) political parties,
while ETA would only address issues related to weapons and
ETA prisoners. Under these terms, ETA agreed to a cease
fire, at a time to be determined by the organization. Almost
certainly, ETA made the announcement now in the hope that
Batasuna would have time to negotiate its participation in
the 2007 Basque municipal elections.

//PARSING THE CEASE FIRE//

¶8. (U) Spanish experts and media pored over the March 22
cease fire announcement to compare it with previous truce
delcarations. The most critical element in the 2006 ETA
document in comparison with previous delarations is the
absence of an explicit demand for Basque self-determination,
ETA's central ambition throughout its history. The short ETA
statement appears to have been drafted to fit the resolution
approved by Spain's Congress in May 2005, which requires
ETA's abandonment of the armed struggle as a pre-condition
for government negotiations with ETA. Skeptics point out
that the ETA statement neither expressed regret for ETA's use
of terrorist methods nor repudiated tactics such as extortion
and "kale borroka," (organized vandalism and street
violence), tactics it continued to employ during previous
truces. It is vague in that respect and could leave the door
open for ETA to continue to use these methods.

¶9. (U) Zapatero is expected to delay responding to ETA for at
least two months to allow the government to determine whether
ETA is complying with its cease fire. In an important
clarification, Vice President Maria Teresa Fernandez de la
Vega indicated that the government viewed both the cessation
of ETA street violence and the halt of ETA extortion of
Basque businesses as part of the cease fire.

//A POLITICAL COUP FOR ZAPATERO//

¶10. (SBU) While there is far to go in achieving a definitive
end to the ETA problem, the cease fire announcement
constitutes a resounding political victory for Zapatero. The
cease fire not only vindicated Zapatero's pursuit of a
negotiated solution to the conflict, it also undermined
opposition accusations that he was weak on terrorism. The
result was an immediate jump in Zapatero's approval ratings
and a surge in confidence within the Socialist Party, which
until the ETA announcement was barely one point ahead of the
PP in the polls. Rafael Estrella, the Socialist spokesperson
in the Parliamentary Foreign Affairs Commission, told the DCM
and Political Counselor on March 22 that the ETA announcement
virtually guaranteed a political victory for the Socialist
Party in the 2008 general elections. Less partisan observers
have echoed this analysis.

¶11. (U) Zapatero has moved swiftly to consolidate his
advantage. After dramatically expressing his "full
confidence" in the PP to work responsibly with his government
in managing the ETA peace process, Zapatero met with Popular
Party (PP) leader Mariano Rajoy on March 28 to seal the
bargain. The PP grudgingly agreed to support the
government's initiative, understanding that it would face a
significant backlash if the party were perceived as blocking
an opportunity to bring an end to ETA violence. In order to
obtain full political cover, Zapatero will meet with all
political parties to seek their support and is expected to
eventually ask the Parliament for authorization to start
official talks with ETA.

//COMMENT//

¶12. (SBU) It may be early for the PSOE to forecast victory in
the 2008 elections, but the Zapatero government is clearly in
a very strong position and well situated to direct events to

MADRID 00000766 003.2 OF 003


PSOE's advantage. Many observers expect Zapatero to delay
any definitive solution regarding ETA's status and Basque
autonomy until after the 2008 elections rather than risking a
bruising political fight on these issues before electoral
victory is assured. Zapatero could suffer if his handling of
ETA is viewed as insensitive to the victims of terrorism, but
his caution and pursuit of broad political backing for his
approach to ETA will shield him to some degree. A more
controversial point will be the political "reinsertion" of
ETA-affiliated groups, which is necessary in Zapatero's view
and yet anathema to the PP and to conservative voters. At
this point, the most likely approach is the formation of a
new Basque nationalist party rather than the "legalization"
of Batasuna, since Batasuna remains under judicial sanction
and is associated by the public with its defense of ETA
terrorism.
AGUIRRE