Search

 

Cablegate: Madrid Weekly Econ/Commercial/Ag Update June 21-25

VZCZCXRO6156
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHMD #0715/01 1820836
ZNR UUUUU ZZH
R 300836Z JUN 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 5005
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3483

UNCLAS SECTION 01 OF 02 MADRID 000715

SIPDIS

STATE FOR EUR/WE AND EEB/IFD/OMA

E.O. 12958: N/A
TAGS: BEXP EAGR ECON EIND EINV ENRG PGOV SP
SUBJECT: MADRID WEEKLY ECON/COMMERCIAL/AG UPDATE JUNE 21-25
UPDATE

MADRID 00000715 001.2 OF 002


Table of Contents

ECON/PGOV: Solbes disassociates himself from June 23
economic package
ECON: Inflation rate projected to reach 5.1 percent in June
ENRG: Enel and Acciona clash over Endesa's renewables assets
but agree to sell other assets to E.ON
EAGR/EIND/BEXP: Smithfield Foods and Campofrio to create
joint pan-European group
PGOV: Telefonica first company to register as a lobby on an
EU registry
BEXP/EINV: ACS/Zachry win 50 year infrastructure project in
Texas
ENRG/EINV: Iberdrola Renovables to invest heavily in
renewable energies in the U.S.

SOLBES DISASSOCIATES HIMSELF FROM JUNE 23 ECONOMIC PACKAGE

1. (U) Second Vice President and Finance Minister Pedro
Solbes said on June 24 that the freeze in government salaries
of high officials announced as one of the 21 measures in the
June 23 package would have more of a &psychological8 than
macroeconomic impact. Sources in his ministry also
reportedly told Expansion said that they had not participated
in the preparation of the 21 measures. (Comment: Observers
seem to think that this may be the first salvo for control of
economic policy that will take place between Solbes and the
Minister of Industry, Tourism and Trade, Miguel Sebastian.
In any event, Solbes, recent statement is just the latest
example of his occasionally intimating publicly disapproval
of certain economic policies approved by President Zapatero.
The Second Vice President does not apparently intend to leave
the government though.) (Expansion, 6/25/08)

INFLATION RATE PROJECTED TO BE 5.1 PERCENT IN JUNE

2. (U) The definitive number will be out by July 11. The
projected June inflation rate is twice as high as the June
2007 rate. The inflation rate for the year of 2008 is
expected to be around 4 percent. Price hikes in oil, raw
materials and food products are responsible for the high
inflation rate. (El Confidencial, 6/27/08)

ENEL AND ACCIONA CLASH OVER ENDESA'S RENEWABLES ASSETS, BUT
AGREE TO SELL OTHER ASSETS TO E.ON

3. (U) Last year, with some controversial GOS help,
Italy,s Enel and Spanish construction/electricity company,
Acciona, edged out Germany,s E.ON for control of Endesa,
although Enel and Acciona agreed to sell some of Endesa's
assets to E.ON. The takeover was the culmination of a two
year battle for control of the utility. Since then,
Acciona,s CEO, Jose Manuel Entrecanales, has apparently
moved aggressively to control Endesa, in some cases
successfully against Enel,s will. Enel may, however, be
able to exercise leverage over Entrecanales in the next
couple of months because Acciona wants to buy Endesa,s
renewable energy assets at a favorable price. However,
because Acciona is the buyer, the company cannot sit on the
corporate entity that will determine the sales price for the
assets. Enel will, however, be represented on this body. In
the meantime, on 6/26/08, Enel and Acciona sold conventional
power plant assets located in Spain to E.ON for euros 11.8
billion. As a result of the sale, Iberdrola is now Spain's
largest electric utility. (FT, 6/25/08/Europa Press,
6/26/08)

SMITHFIELD FOODS AND CAMPOFRIO TO CREATE JOINT PAN-EUROPEAN
GROUP

4. (U) The Spanish meat processing company, Campofrio, is
planning to merge with Groupe Smithfield Holdings (GSH) and
create a pan-European group. The new company will be a
European leader in processed meat products such as cured ham,
bacon, and sausages. The new firm will have the name
Campofrio and will be listed on the Madrid stock exchange.
Campofrio shareholders will own 51.5 percent of the new group
and GSH shareholders will own 48.5%. The press is describing
the transaction as a friendly merger between equals. (Note:
The Ambassador is meeting with Campofrio CEO Pedro Ballve,
who will head up the new entity, on July 16.) (Expansion,
6/26/08)

TELEFONICA FIRST COMPANY TO REGISTER AS A LOBBY ON AN EU
REGISTRY

5. (U) The Spanish telecoms giant was the first European
company to sign in with this voluntary registry. Telefonica
reported that its lobbying costs were USD 1.5 million in

MADRID 00000715 002.2 OF 002


2007. (IHT, 6/24/08; Expansion, 6/24/08)

ACS/ZACHRY WIN 50 YEAR INFRASTRUCTURE PROJECT IN TEXAS

6. (U) The Spanish construction giant has won with its Texas
partner, Zachry, a 50-year contract to design, plan and
develop an infrastructure corridor of 1,000 kilometers across
Texas. This "I-69 Trans Texas Corridor" project will go
across Texas from North to South, connecting the Mexican
border to the coastal region of the Gulf of Mexico, Houston,
and major industrial and logistics centers of Texas with the
northern part of the country. (WSJ, 6/26/08)

IBERDROLA TO INVEST HEAVILY IN RENEWABLE ENERGIES IN THE U.S.

7. (U) Iberdrola announced in a press release June 26 that it
planned to spend over 18 billion euros during 2008-2012
investing in renewable energy projects domestically and
abroad. Of that amount, 50 percent is slated for investment
in the U.S., 23 percent for investments in Spain, and 25 for
the rest of Europe. Iberdrola Renovables invests in all
types of renewable energy, but focuses primarily on wind
energy. The company also announced plans to invest USD 800
million in gas storage in the U.S.


AGUIRRE

© Scoop Media

 
 
 
 
 
World Headlines

 

Werewolf: Gordon Campbell On North Korea, Neo-Nazism, And Milo

With a bit of luck the planet won’t be devastated by nuclear war in the next few days. US President Donald Trump will have begun to fixate on some other way to gratify his self-esteem – maybe by invading Venezuela or starting a war with Iran. More>>

Victory Declared: New Stabilisation Funding From NZ As Mosul Is Retaken

New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

ALSO:

Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

ALSO:

Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

ALSO: