MIXED SIGNALS ON IRAQ ASSISTANCE PLEDGES

C O N F I D E N T I A L MADRID 002204

SIPDIS

FOR EB/ODF ROLAND DEMARCELLUS
EB/IRAQ MARK KISSEL

E.O. 12958: DECL: 06/10/2014
TAGS: EAID ECON EFIN IZ SP
SUBJECT: MIXED SIGNALS ON IRAQ ASSISTANCE PLEDGES


Classified By: Economic Counselor Judy Garber for reasons 1.4 (b) and (
d)


1. (C) An article in the June 9 issue of El Pais quotes
Foreign Minister Moratinos as saying the GOS is reconsidering
its USD 300 million pledge towards Iraq reconstruction. The
article suggests the review comes because so little has been
used. This statement seems to contradict Foreign Minister
Moratinos, late April statement in Washington that Spain
would maintain its aid commitments to Iraq.


2. (C) It also seems at odds with repeated assurances by our
contacts at MFA and the Ministry of Economy. As recently as
last week, Director General of International Finance in the
Ministry of Economy and Finance Ramon Guzman Zapater confided
to us that Vice President and Minister of Economy Pedro
Solbes instructed him to carry out the pledges Spain made at
the Madrid Donors' Conference.


3. (U) The Ministry of Foreign Affairs and Ministry of
Economy share responsibility for Spain's aid pledge. Of the
total $300 million pledge made at the Donors, Conference,
$100 million has already been disbursed. Our understanding
of the breakdown of the remaining $200 million provided by
our contacts in the Ministry of Economy follows:


4. (U) Year 2004 (some of which has been disbursed)
Total: $ 60 million
IRFFI: $ 20 million (Min. Econ)
IFC Small Business Facility: $ 5 million (Min. Econ)
Production of Iraqi Dinars: $18 million (Min. Econ)
Not programmed: $ 17 million (Min. Econ and MFA)


5. (U) Years 2005-2007 (Note: this allocation is notional and
will likely change)
Total: $ 140 million
Ministry of Economy non-reimbursable credit lines (FAD): $75
million
Bilateral donations (MFA*Spanish Agency for International
Development): $ 55
Nonspecific technical assistance: $ 10 million (Min. Econ and
MFA)


6. (C) Comment: Given repeated assurances by our contacts
that the previous government's commitments at the
International Donors' Conference for Iraq would be carried
out, Moratinos' statements in El Pais, if accurate, come as a
surprise. It is unclear whether Moratinos was referring to
MFA assistance funding only or the entire $200 million
commitment. His comments may also be part of a pattern of
sometimes contradictory statements by ministers as the
Zapatero government tries to create cohesive policies. We
will continue to emphasize our expectations that Spain
fulfill all of its Madrid Conference pledges.
MANZANARES