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Cablegate: Madrid Economic Weekly, October 19-23

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RR RUEHLA
DE RUEHMD #1040/01 2961410
ZNR UUUUU ZZH
R 231410Z OCT 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 1370
INFO RUEHLA/AMCONSUL BARCELONA 4168
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 MADRID 001040

SENSITIVE
SIPDIS

STATE FOR EUR/WE, EEB/IFD/OMA
COMMERCE FOR 4212/DON CALVERT
TREASURY FOR OAI/OEE R.JOHNSTON
ENERGY FOR PIA:K.BALLOU

E.O. 12958: N/A
TAGS: BEXP ECON EIND EINV ELAB SP
SUBJECT: MADRID ECONOMIC WEEKLY, OCTOBER 19-23

REF: MADRID 1015

Contents:

EINV/BEXP: Zapatero Addresses US Business Interests in ABC
Speech
ECON: Opposition Parties Criticize 2010 Budget Bill
ELAB: Q3 Unemployment Rate Flat at Just Under 18%
ECON: Foreign Tourist Arrivals Down Almost 10%
EIND/ELAB: Opel Unions Reach Preliminary Agreement with
Magna; Fewer Job Cuts Anticipated


Zapatero Addresses US Business Interests in ABC Speech

1.(U) Speaking to CEOs of U.S. companies belonging to the
American Business Council (ABC), President Zapatero on the
evening of October 21 addressed issues of concern to U.S.
firms. He said the GOS was ready to start the process of
renegotiating the 1990 bilateral double taxation treaty. He
also acknowledged that Spain,s IPR protection regime needed
improvement, saying that this was an issue of concern to both
governments. He welcomed (currently stalled) efforts by ISPs
and content providers to find a solution that respected
property rights while encouraging development of the
information society. He emphasized that the interministerial
commission recently established by the Council of Ministers
would present before the end of the year "a satisfactory
proposal" for action. Zapatero also said that the GOS and
the Obama Administration had agreed to study the creation of
a bilateral forum on investment and economic cooperation that
would include representatives of the two governments, the
main U.S. investors in Spain, and the main Spanish investors
in the U.S. He said the forum would address areas including
renewable energy, energy efficiency, public transportation,
information/communication technology, aviation,
biotechnology, and health. Zapatero cast each of these
efforts in the context of a GOS push to encourage U.S.
investment in Spain and Spanish investment in the U.S.

2.(SBU) Comment: The event was clearly a result of the GOS'
pleasure with Zapatero's Oval Office meeting last week. The
Presidency told the ABC at the end of last week that Zapatero
would speak at its previously planned event, and it brought
along several ministers and Secretaries of State and an
impressive media contingent. GOS officials told us how
pleased they were with the Washington visit, and they are
working actively on proposals for the bilateral investment
forum. At a reception afterwards, Zapatero stayed far longer
than the planned 10 minutes discussing business issues, and
ministers and Presidency officials emphasized their interest
in addressing USG and business concerns on investment-related
issues. (Embassy, 10/22)

Opposition Parties Criticize 2010 Budget Bill

3.(U) Conservative and leftist opposition parties alike
criticized the Socialist government in the Congress of
Deputies on October 20, the first day of debate on the
Zapatero Administration,s proposed 2010 budget. Opposition
leader Mariano Rajoy of the conservative Popular Party called
the proposal "a piece of junk" that "masks reality, abuses
the economy and endangers everyone." He said lambasted the
bill as "deadly for the middle class and workers." The
Catalan Republican Left (ERC) likewise attacked the bill for
not doing enough to fight unemployment. Media reports
suggest that Socialists, minority government is counting on
the support of the Basque Nationalist Party (PNV) and the
Canary Islands Coalition to pass the bill. Despite the
political theater, the budget bill did receive the number of
votes needed to proceed to the next stage of consideration,
and it is expected to be approved before the end of the year.
(All Media, 10/21)

Q3 Unemployment Rate Flat at Just Under 18%

4.(U) The National Statistics Institute announced that the
unemployment rate rose by 0.01% to 17.93% in the year's third
quarter. This is the highest rate since 1998. The number of
people with jobs actually fell by 75,000, and the
unemployment rate was only flat because the number of
unemployed people looking for work declined as well.
Comment: The rate is expected to rise in the year's fourth
quarter. (National Statistics Institute, 10/23)

MADRID 00001040 002 OF 002

Foreign Tourist Arrivals Down Almost 10%

5.(U) The number of foreign tourist arrivals between January
and September was 9.8% below the number who arrived in
January-September 2008. There were fewer arrivals than in
the same period of any year since 2004. (El Pais, 10/21)

Opel Unions Reach Preliminary Agreement with Magna; Fewer Job
Cuts Anticipated

6.(U) Opel union representatives at Spain,s Figueruelas
plant have reached a preliminary agreement with Magna
leaders, a necessary condition for GM's sale to Magna of a
controlling stake in Opel. Industry Ministry Sebastian said
that the agreement, which includes a ten-year industrial
plan, guarantees the future of the plant. It will cut 900
Figueruelas workers, down significantly from the company's
original proposal of 1,700, meaning a 12% reduction in the
plant's current workforce of roughly 7,500. Workers are to
vote on a referendum on October 26, including whether to call
off four days of proposed strikes. (All Media, 10/23)

CHACON

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