POSITIVE SIGNS ON SPAIN'S IFC AND IRFFI PLEDGES

UNCLAS MADRID 002397

SIPDIS

FOR EB/ODF ROLAND DEMARCELLUS
EB/IRAQ MARK KISSEL

E.O. 12958: N/A
TAGS: EAID ECON EFIN IZ SP
SUBJECT: POSITIVE SIGNS ON SPAIN'S IFC AND IRFFI PLEDGES

REF: MADRID 2248


1. Summary: A call to a key contact on Iraq reconstruction
issues adds additional weight to assurances by high level GOS
contacts that Spain would honor its Iraq Donors' Conference
commitments. Our working level contact predicted the IFC $5
million and half of the IRFFI $20 million would be disbursed
by July with the remaining IRFFI $10 million moving later
this year. This timeline supports comments made by Secretary
of State for Economy DAVID Vegara (reftel),and signals that
positive action is being taken at the working level. End
Summary.


2. Our chief contact on Iraq reconstruction, Ministry of
Economy Technical Advisor for International Finance Ines
Menendez de Luarca Bellido, confirmed that the approval of
the $5 million for the IFC Small Business Facility and $20
million for the IRFFI is moving forward. Higher ranking
officials in the Ministry of Economy, including the Secretary
of State for Economy Vegara (reftel) and the Director General
for Finance assured us that Spain would live up to its Iraq
reconstruction pledge. Menendez' affirmation of these
statements confirms that the message has reached the working
level and is being actively pursued.


3. Menendez provided a rough timeline for the disbursements.
She stated that the the Ministry of Economy had completed its
internal approval process on the IFC $5 million and the IRFFI
$20 million. The next step is the July 8 meeting of the
interministerial commission that approves all development
funds. The disbursement decision will then move to the
subsequent Council of Ministers meeting. Approval is
expected by both groups. Menendez predicted the IFC $5
million and $10 million of the IRFFI transfer will be made in
mid-late July. The second half of the IRFFI funds should be
disbursed by the end of the year.


4. We will continue to track this issue, and notify
Washington as the disbursement process reaches its final
stages.
ARGYROS