Viewing cable 05MADRID1178, DEMARCHE TO ZAPATERO ON MEETING WITH CHAVEZ, LULA,

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C O N F I D E N T I A L MADRID 001178

SIPDIS

INFO EUROPEAN POLITICAL COLLECTIVE PRIORITY
AMEMBASSY BOGOTA PRIORITY
AMEMBASSY BRASILIA PRIORITY
AMEMBASSY CARACAS PRIORITY

E.O. 12958: DECL: 03/29/2015
TAGS: PREL PGOV PTER SP VZ
SUBJECT: DEMARCHE TO ZAPATERO ON MEETING WITH CHAVEZ, LULA,
URIBE

REF: A. A) SECSTATE 52920
¶B. B) HALL - MANZANARES E-MAIL OF 3/23

Classified By: Charge d'Affaires Bob Manzanares; reasons 1.4 (B) and (D
)

¶1. (SBU) Charge conveyed Ref A points to National Security
Adviser Carles Casajuana on March 23. Casajuana stressed the
correlation of USG-Spanish interests in a stable, democratic
Venezuela and assured Charge that the USG points would be
provided to President Zapatero and his party prior to
Zapatero's departure for the region on March 28.

¶2. (U) The largest-ciruclation Spanish dailies, "El Pais" and
"El Mundo", provided extensive front page coverage of "U.S.
concern" regarding the Spanish weapons sale to Venezuela and
President Zapatero's overtures to Chavez. These press
stories indicate that Spain made a final decision on March 27
on the weapons package it would offer Venezuela, which will
include:

- 4 coastal patrol boats
- 4 ocean going corvettes
- 2 oil tankers
- 1
- 10 C-295 transport aircraft
- 2 coastal patrol aircraft

The total value of the sale is estimated at Euros 1.3 billion
(USDOLS 1.69 billion) and will reportedly provide 600 jobs
for 6 years at Spain's hard-pressed Navantia shipyards.
Separately, Spanish oil giant Repsol-YPF and Petroleos de
Venezuela were expected to conclude a cooperation agreement
during Zapatero's visit, which could include up to USDOLS 185
million in investments in Venezuela by Repsol.

¶3. (C) "El Pais," which has close ties to the ruling
Socialist Party, cited unnamed sources who asserted that the
MFA had strongly opposed the weapons sale to Venezuela
because it would undermine Spanish relations with Colombia
and the USG. The press story cast the four-leader format of
the summit as an effort by the MFA to mollify the USG by
ensuring Uribe's inclusion in the most high-profile element
of the Zapatero visit. This tracks with numerous private
conversations with MFA contacts at various levels, including
Deputy FM Bernardino Leon, who were clearly uncomfortable
with the nature of the weapons sale to Venezuela and insisted
that Defense Minister Jose Bono pushed the deal through
despite the MFA's strong opposition. The MFA is now in spin
control mode, minimizing the potential offensive capability
of the weapons package (describing the corvettes as "patrol
boats" for example) and working hard to protect the GOS from
USG and opposition criticism.

¶4. (C) With Ref A demarche, we have now raised our concerns
regarding Spanish overtures and weapons sales to Venezuela in
at least eight separate meetings with GOS officials,
including with Deputy FM Leon, Defense Minister Bono, Deputy
Defense Minister Pardo, and CHOD Sans. More importantly,
Attorney General Gonzalez raised Venezuela as a key source of
bilateral friction during his March 10 meetings with Vice
President Maria Teresa Fernandez de la Vega and FM Moratinos.
Given the magnitude of the sale, we did not expect to derail
the ship deal, but the USG's constant pressure on this issue
does make clear that the weapons sale will remain a drag on
efforts to improve bilateral relations.
MANZANARES