Viewing cable 07MADRID1420, C) SPAIN'S RELATIONSHIP WITH CUBA (C-RE7-00940)

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TO RUEHC/SECSTATE WASHDC PRIORITY 3036
INFO RUEHUB/USINT HAVANA PRIORITY 0214
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C O N F I D E N T I A L SECTION 01 OF 02 MADRID 001420

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E.O. 12958: DECL: 07/16/2017
TAGS: PINR PREL SP CU
SUBJECT: (C) SPAIN'S RELATIONSHIP WITH CUBA (C-RE7-00940)

REF: A. SECSTATE 92831
¶B. MADRID 1144
¶C. MADRID 1179

Classified By: DCM Hugo Llorens for reasons 1.4 b & d.

¶1. (C) SUMMARY: Post appreciates INR's careful attention to
the evolving issue of Spain's engagement with Cuba. The
Ambassador and DCM, as well as Washington visitors, continue
to take every opportunity to express to the GOS our
disagreement with its current policy. Additional information
on the relationship, keyed to Ref A's questions, is provided
below. END SUMMARY.

¶2. (C/NF) Question A: Foreign Minister Moratinos told the
Ambassador that he and his Chief of Staff Javier Sancho had
initiated the Cuba trip on their own and did not act on
instructions from President Zapatero's office in Moncloa. As
we understand Moratinos' decision-making and leadership
style, he has a certain amount of autonomy and shares with
Zapatero a penchant for sudden, almost theatrical,
announcements that are not widely consulted first. Moratinos
is most likely to resort to these tactics when he feels that
he is not getting the respect that he believes that he
deserves. The specific timing of Moratinos' visit to Havana
may have had to do with a sudden change in Moratinos'
calendar or the felt need to set a new course before the EU's
then-upcoming Cuba deliberations scheduled for June.
Politically, the visit was timed on the eve of regional and
municipal elections held on May 27 and intended to mobilize
the more left-wing base of the ruling Socialist Party (PSOE).

¶3. (C/NF) Question B: Although the opposition Popular Party
has attempted to score domestic political points from
Moratinos' trip to Cuba, the issue has not gained traction
with the public. The Government has more or less
successfully made the case that the previous policy of
isolation was not providing results, and that it was worth
trying something new. The far left supports engagement with
Cuba, and the center-left isnt focused on Cuba.
Furthermore, most of the Spanish public, including more
right-wing elements, are opposed to US sanctions against Cuba
and there remains an abiding affection and nostalgia for
Cuba, Spain's last major colony. Even right-of-center
leaders like Manuel Fraga, a pillar of the conservative
element in Spain, have met Fidel Castro. The bottom line was
that there was no political downside for the Zapatero
government in approving Moratinos' initiative. It is true
that most of the senior "Cuba hands" in the Foreign Ministry,
including Secretary of State for Latin American Affairs Trini
Jimenez, Political Director Rafael Dezcallar and Director
General for Latin America Javier Sandomingo, opposed the
Foreign Minister's decision to travel to Cuba. However, once
the decision was made, these senior officials have loyally
promoted the new policy approach.

¶4. (C) Question C: The media splits along ideological lines,
with conservative newspapers La Razon and ABC harshly
criticizing GOS actions on Cuba. Even El Pais, which tends
to support liberal policies and the current government, has
been relatively critical of Moratinos trip, particularly the
failure to meet with dissidents and the lack of discernible
results.

¶5. (C) Question D: For details on the first session of the
bilateral human rights dialogue, please see ref B's readout
of DCM's conversation on June 11 with MFA Political Director
Rafael Dezcallar, who had just returned from leading Spain's
delegation to Havana. The GOS professes that it will exert
"strong pressure" on human rights issues through this
dialogue, and has sought to persuade us that the US can
expect to see measurable results. The EU has offered to Cuba
to a similar "comprehensive dialogue" and invited a Cuban
delegation to Brussels to discuss details, but we are not
aware that Cuba has responded at this time.

¶6. (C/NF) Question D (cont'd): MFA has announced that it will
hold another dialogue session in September. MFA Deputy DG for
human rights Fernando Fernandez-Arias (protect) told poloff
that the Cubans proposed holding it in NYC at the time of the
UN General Assembly. Dezcallar went along with this against
the objections of Fernandez-Arias and the Spanish Ambassador
to UN. Fernandez-Arias noted that the Spaniards would face
certain problems with a NY meeting, including: where to hold
the meeting; how to keep the meeting from taking place
between Perez Roque and Moratinos; how to avoid being
outsmarted by the Cubans during the incredibly hectic week;
how to keep the Cubans from creating a media circus; and how
to avoid the Spain-Cuba meeting becoming the focus of any
US-Spanish bilateral talks. He also said that the Cubans
were irritated that Spain issued a statement regretting the

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loss of the UNHRC Special Rapporteur for Cuba, but that the
Spanish replied that they really did regret losing it. The
Cubans promised to make certain gestures, including opening
access to the Red Cross, once the UNHRC mandate went away.

¶7. (C) Question E: MFA insists that it maintains a robust
policy toward the dissidents, and notes that MFA DG for Latin
America Sandomingo met with Cuban dissident groups in Madrid
on June 19 to explain GOS policy. According to MFA, he
described the "frank and constructive" environment of
Dezcallar's meeting in Havana and emphasized that "all
issues" were on the table. Dissidents including Raul Rivero
and Cuba Democracia Ya leader Rigoberto Carceller attended
the meeting, but criticized the GOS policy. Carceller said
"I don't doubt that they have talked about everything in
Havana, but I don't think that they will achieve any
results." The Madrid-based dissidents insisted that the
Spanish government meet with dissidents in Havana whenever it
meets with the Cuban government.

¶8. (C) Question F: Updated information on major Spanish
business interests in Cuba is detailed in Ref C. Most Spanish
businessmen, regardless of political persuasion, are
interested in Cuba. It is certain that Spanish companies
seek to influence GOS decisions on Cuba, but they do so
discretely in order to avoid possible Helms-Burton
complications. It is likely that Spanish companies limit
their possible lobbying to the economic dimension of the
relationship. As discussed above, the Zapatero government is
engaged with the Cuban regime, so it is not likely that
Spanish firms are needed as conduits between Havana and
Madrid. Press reports indicate that Repsol has won the right
to prospect for oil in a number of blocks off the coast of
Cuba, but there are no publicly available numbers on how much
money, if any, Repsol has spent on physical oil and gas
exploration in Cuba.

¶9. (C) Question G: The Ministry of Economy & Finance and the
Ministry of Industry, Tourism and Trade do influence the
economic dimensions of Spanish Cuba policy, particularly with
respect to debt forgiveness negotiations and export credits.
These ministries prefer to use economic criteria in making
Cuba-related decisions but will bend to foreign policy
considerations, particularly if the Office of the Presidency
insists. The Office of the Presidency's Economic Office has
not been active on Cuba policy as far as we know, but it
certainly could be.

¶10. (C) Question H: On March 11, 2007, the Cuban government
formally asked the GOS for debt relief negotiations, for the
Spanish Export Credit Agency (Cesce) to grant export credits
again for Spanish exports to Cuba, and to renegotiate a
Bilateral Investment Treaty. Since then, there has been
little discussion on the status of these issues. We do know,
however, that the Ministry of Economy's preference is to use
Paris Club criteria in determining how much Cuba debt Spain
should forgive/renegotiate - we know that the Ministry is
prepared to deal on a portion of the debt. With respect to
export credits, Cesce reports to the Ministry of Industry.
This Ministry is so far not convinced that Cuba meets the
normal criteria for reestablishing export credits. It is
worth noting, however, that despite the absence of export
guarantees, Spanish exports to Cuba went from Euros 489
million in 2005 to Euros 692 million in 2006. We do not know
the status of the negotiations on a possible Bilateral
Investment Treaty.

¶11. (C/NF) Question I: Spain considers itself the EU opinion
leader on issues related to Latin America. It does not
willingly take advice from any other country on Cuban issues,
but as the recent debate over the EU Common Policy shows, it
can be forced to back down by concerted action by other EU
members. It is useful, in Embassy Madrid's opinion, to
develop alternative voices within the EU to challenge alleged
Spanish leadership on Cuba policy when this leadership
appears in conflict with the EU's own common policy and
broader stated goals of support for democracy and human
rights.

¶12. (C) Question J: As was widely reported in the press in
early June, Spain tried and failed to lift the EU sanctions
on Cuba. It may try again in the future, particularly if it
can show results from its engagement with the Castro regime.
AGUIRRE