DASD BRZEZINSKI DISCUSSES NATO NON-FUNDING OF

C O N F I D E N T I A L SECTION 01 OF 02 MADRID 000750

SIPDIS

DEPARTMENT FOR EUR/RPM AND EUR/WE
OSD FOR I. BRZEZINSKI
USNATO FOR JUHL, WRIGHT AND WELLS

E.O. 12958: DECL: 03/04/2014
TAGS: MOPS PREL PGOV SP NATO
SUBJECT: DASD BRZEZINSKI DISCUSSES NATO NON-FUNDING OF
SPANISH AIR DEFENSE WITH MOD OFFICIALS

Classified By: Political Counselor Kathleen M. Fitzpatrick for reasons
1.4 (A),(B) and (D)

--------------
Summary
--------------


1. (C) Deputy Assistant Secretary of Defense (DASD) for
European and NATO policy Ian Brzezinski met February 26 with
Ministry of Defense officials in Madrid to discuss the NATO
Security Investment Program,s (NSIP) funding of Spanish air
defense systems and Spain's blockage of NATO infrastructure
projects at both U.S. bases in the CONUS and Aviano Air Base,
Italy. The U.S. side rolled out its new &over and above8
eligibility policy that updates the criteria for providing
NATO common funding for portions of national air defense
systems. The Spanish agreed that this new policy should be
applied to NATO,s future Air Command and Control System
(ACCS) but not to the current NATO Integrated Air Defense
System (NATINADS). Spain asserted, inaccurately, that NATO
had approved funding of approximately 50 million euros for
Spain's air defense systems before the "over and above"
policy was put in place. NATO should therefore fund this
amount for Spain's air defense systems.


2. (C) DASD Brzezinski replied saying the U.S. greatly
appreciates Spain's contributions as a close ally.
Nonetheless, the over and above policy was in effect before
Spain's system requirements were submitted for NATO
consideration and at any rate, the NATO Security Investment
Program (NSIP) could no longer afford to fund air defense
systems to the extent Spain wished. If NATO did so, the NSIP
would not have funds for higher-priority projects essential
to NATO Transformation. Spain agreed to consider an initial
mutual un-blocking of some NSIP projects as a first step
toward resolving the impasse, and Brzezinski agreed the U.S.
would take another look at whether any portions of Spain's
air defense system warranted NATO funding within the over and
above limitation. End summary.

--------------
GOS: Fund Air Defense Retroactively
--------------


4. (C) Jimenez-Ugarte laid out Spain's position: Spain gets
only 40 cents for every dollar it contributes to NATO and has
been proud to be an ally that "has not made substantial
financial demands on the Alliance8. Spain, he said, was
only asking for NATO to fund 20 percent of its "NATINADS"
radar system, which amounted to approximately 50 million
euros. Spain had funded or will fund the remaining 80
percent. Spain did not disagree with the U.S.'s "over and
above" policy, but believed the U.S. decided to apply the
rule after NATO had already approved Spain's radar system.
The rule should therefore not apply to Spain's air defense
projects. He said Spain would have a difficult time lifting
the Aviano blocks if the parties could not reach a compromise
on Spain's air defense system.

-------------- --------------
DASD Brzezinski: NATO Cannot Exhaust NSIP Funding on ACCS
-------------- --------------


5. (C) DASD Brzezinski emphasized the U.S. greatly
appreciates Spain's contributions to the War on Terror, in
the Balkans and in Iraq and is proud that Spain is one of our
closest allies. He said, however, that Spain's blockage of
Aviano infrastructure projects in the NSIP was inhibiting
NATO transformation and was a growing irritant in relations.
He noted that the "over and above" policy was not new and the
U.S. had long said NATO should only fund air defense systems
beyond national requirements. Aside from that, times had
changed since Spain first requested funding for its air
defense system in the late 1990s, and NSIP simply could no
longer afford to fund members' air defense systems beyond the
over and above principle. If NSIP funded more for air
defense systems, the budget would hemorrhage as other
countries would insist on the same treatment. Funding would
not be available to pay for higher-priority NSIP projects
such as new satellite communications, missile defense, NATO
enlargement, Airborne Ground Surveillance, creating
deployable Combined Joint Task Forces, and implementing the
new command structure, all of which are estimated to cost 3.5
billion euros. Responding to Spain's concern that it was
paying more than it was receiving in NATO funds, DASD
Brzezinski stressed that, over the next five years, Spain
would be the beneficiary of approximately 800 million euros
of NATO and U.S. funding destined for infrastructure projects
supporting ACCS, Rota Naval Base, and the new HQ LANDSOUTH.

--------------
Steps Toward Resolving Impasse
--------------

6. (C) After further discussion, DASD Brzezinski suggested
the parties take a first step toward resolving the impasse by
mutually lifting blocks on relatively small-scale projects:
The U.S. would lift blocks related to Rota Naval Base and
several other bases worth about 2.4 million euros, if Spain
lifted un-blocked projects in the CONUS worth about 2 million
euros. Brzezinski also said the U.S. would take another look
at Spain's unfunded air defense projects and the associated
cost estimates (once Spain provided more detailed, "Type B"
estimates) to determine if the NSIP could fund additional
sums while still staying within the over and above
parameters. The meeting ended on a positive note.

--------------
SFOR/Bosnia
--------------


7. (C) In a brief pull-aside, Jimenez-Ugarte told Brzezinski
Spain agreed SFOR should terminate by year's end with a
follow-on EU force taking its place. The GOS agreed that the
EU force should reinforce the Berlin Plus principles, that
DSACUER would have operational command, develop operational
plans and carry out force generation, and AFSOUTH would be in
the chain of command. Brzezinski emphasized the change in
forces was not simply a re-flagging exercise -- the EU force
would be different from SFOR and would focus on civil order
and law enforcement functions. The EU force would have a
heavy police composition. Jimenez-Ugarte agreed with this
formulation.

--------------
The Delegations
--------------


3. (C) DASD Brzezinski was accompanied at the meeting by
Clarence Juhl, Deputy Defense Advisor, USNATO; David Wright,
Director of Infrastructure and Logistics, USNATO; El Wells,
Assistant for NATO ACCS, USNATO; Anthony Aldwell, Senior
Analyst, OSD/NATO Policy; and the Embassy's Pol-mil Officer,
Defense Attache and Assistant Air Attache. The Ministry of
Defense's (MOD) Secretary General for Defense Policy, Javier
Jimenez-Ugarte, headed up the Spanish side. He was joined by
Gen. Felix Sanz, Deputy Director General for International
Relations, MOD; Adm. Enrique Perez, President of the Spanish
component of the Hispano-American Permanent Committee on
Defense Cooperation; Capt. Antonio Hernandez-Palacios, MOD
Chief for NATO and European Union Issues; Lt. Col. Victor
Pastor, NATO Department, MOD; Concepcion Figueroa, Ministry
of Foreign Affairs; and three representatives from Spain's
mission to NATO.


8. (U) DASD Brzezinski has cleared this cable.
ARGYROS