ZAPATERO AND THE BASQUE PROBLEM: A HIGH STAKES

C O N F I D E N T I A L SECTION 01 OF 04 MADRID 002359

SIPDIS

E.O. 12958: DECL: 06/16/2015
TAGS: PGOV PTER SP
SUBJECT: ZAPATERO AND THE BASQUE PROBLEM: A HIGH STAKES
GAMBLE

Classified By: Political Counselor Kathy Fitzpatrick; reason 1.4 (D)


1. (C) Summary. In one of his most dramatic gestures since
taking office last year, President Jose Luis Rodriguez
Zapatero recently requested Parliamentary approval for direct
government negotiations with the Basque terrorist group ETA,
if ETA agrees to abandon the armed struggle. This was the
latest measure in a two-pronged Zapatero strategy intended to
demonstrate a clean break with Aznar's hard-line approach
towards the Basque issue. The first element is aimed at
ending ETA's 30-year terrorist campaign. The second element
of the strategy is a political effort to hijack elements of
the Basque nationalist platform in order to weaken mainstream
Basque nationalist parties and increase the Socialists'
strength in the region. Zapatero's Socialist (PSOE)
government has offered to renegotiate the statute governing
the Basque Region's relationship with the central government
and opted not to challenge the participation in Basque
elections of a small party acting on behalf of ETA front
group Batasuna. Zapatero is motivated both by the prospect
of potentially becoming the leader who finally succeeds in
ending ETA violence and by his desire to isolate the
opposition Popular Party (PP),the only party to oppose his
peace overture to ETA, and to sideline the moderate Basque
Nationalist Party (PNV). His concessionary approach towards
both ETA and to legitimate Basque nationalist parties is a
risky proposition, since even some members of Zapatero's
cabinet are skeptical of any expansion of the Basque Region's
powers and prefer a hard line approach to dealing with ETA.
The PP and the "Association of Victims of Terrorism" have
bitterly denounced Zapatero for extending an olive branch at
a time when ETA has shown no signs of ending its violent
course. A series of ETA attacks since Zapatero's peace offer
could make opposition criticism resonate with a broader
sector of the Spanish population and Zapatero's tolerant
approach to the Basque issue in general represents a
significant political vulnerability at the national level.
End Summary.

//PEACE OVERTURES//


2. (C) Since taking office, Zapatero has extended his
trademark emphasis on "dialogue" to the Basque issue. Early
in his tenure, he met with Basque Region leader Juan Jose
Ibarretxe, a clear break with former President Jose Maria
Aznar's refusal to meet with Basque Government or PNV leaders
and a symbolic gesture of Zapatero's willingness to
negotiate. Zapatero took additional concrete measures in the
first half of 2005 that gave substance to his peace
initiative, including:

-- Acceptance of the participation of the "Communist Party of
the Basque Lands," (EHAK) a suspected cover for ETA
front-group Batasuna, in April 17 Basque regional elections.
GOS officials insist that they did not have enough time or
evidence to prevent EHAK's participation in the vote, but
Batasuna's overt support for EHAK led many observers to
speculate that the GOS could have disrupted EHAK, but chose
not to in order to avoid alienating Basque nationalist voters.

-- On April 21, Zapatero won Parliamentary support for a GOS
measure overturning Aznar-era legislation mandating jail
terms for anyone who convoked an "illegal referendum," a law
aimed at preventing the Basque Government from organizing a
popular referendum ("Plan Ibarretxe") on whether to modify
the Basque autonomy statutes. This was interpreted as a sign
of GOS good will by the moderate PNV, but criticized by the
PP and others as opening the door to demands for ever-greater
regional independence from Madrid.

-- On May 17, Zapatero won the support of all parties except
the PP for his proposal to engage in peace talks with ETA if
ETA agreed to abandon the armed struggle. ETA victims groups
and PP politicians suspect that secret GOS-ETA talks are
already underway, an assertion vigorously denied by the
Zapatero government. Talks with ETA would not be unusual;
every Spanish administration since the democratic transition
has made contact with the terrorist group. The difference in
this case is that the major opposition party is against any
discussions with ETA, placing greater pressure on the GOS to
produce results.


3. (C) Zapatero holds in reserve additional incentives to
draw ETA into negotiations, measures he has not yet deployed,
including:

-- Releasing ETA prisoners who have served three-quarters of
their prison sentences or who have health problems. This
group would account for approximately 85 ETA inmates. (NOTE:
The total number of ETA members in jail is 713, distributed
as follows: Spain - 551; France - 153; Belgium - 2; UK - 1;
Quebec - 1; Mexico - 5. END NOTE.)

-- Transfer all ETA prisoners to the Basque Region near their
families rather than continuing the current practice of
distributing them in prisons throughout Spain.

-- Release non-violent ETA prisoners (logistical support
teams) with the understanding that they will leave Spain for
other countries and not resume their pro-ETA activities.

-- Allowing ETA prisoners to take courses through the
University of the Basque Country, course work which counts
towards sentence reductions.

These additional steps would be highly unpopular outside of
the Basque Region unless accompanied by reciprocal overtures
from ETA. The sensitivity of this issue was highlighted by
the firestorm touched off recently by a separate judicial
decision confirming the impending release of ETA terrorist
Ignacio de Juana Chaos after completing 18 years of a 30-year
prison term for his role in 25 murders. Though the timing of
the decision was curious, most observers do not believe this
decision is connected to Zapatero's overtures to ETA. The
GOS insisted that it would challenge Chaos' release and
tighten oversight of ETA prisoners to ensure that they were
not receiving undue sentence reductions.

//ETA VICTIMS REACT ANGRILY//


4. (C) Zapatero's strategy towards ETA has met with stiff
resistance from both the PP and ETA victims organizations.
These groups contend that Zapatero revitalized ETA just as
the terrorist group was reeling from French and Spanish
detentions of senior ETA leaders, including the arrest of the
group's nominal leader, Mikel Antza, in October 2004. The
most visible rejection of Zapatero's Basque policy was a June
4 mass demonstration organized by the "Association of Victims
of Terrorism" (AVT) and attended by the PP leadership,
including former President Aznar. Socialist representatives
pointedly refused to take part in the March, though Zapatero
subsequently agreed to meet with victims rights organizations
to hear their views. Though the PP continues to lose ground
to the PSOE on social issues, its opposition to Zapatero's
Basque policy sets the stage for the PP to take advantage
should Zapatero's approach fail to draw ETA into productive
negotiations.

//ETA RESPONDS TO ZAPATERO WITH SHOW OF FORCE//


5. (C) ETA has not made it easy for Zapatero. On June 16,
ETA released a statement through the Basque daily "Gara"
attacking the Zapatero government for continuing police
activities against ETA (which ETA terms GOS "repression") and
expressing confidence that the government's anti-terrorist
policies and illegalization of ETA front group Batasuna had
failed. The ETA statement, widely perceived as ETA's
official response to Zapatero's various overtures, suggested
that ETA was open to discussions, "dialogue, and
negotiation," but made no mention of abandoning the armed
struggle and demanded that negotiations lead to
"self-determination for the Basque Region." Instead, ETA
claimed responsibility for nine recent terrorist attacks,
including four since Zapatero's offer to engage in peace
talks. Though no people have been killed in these incidents,
ETA's car bombing in Madrid and mortar attack against
Zaragoza Airport could easily have resulted in casualties.
Just as ominously, ETA-supported street violence ("kale
barroka") is on the upswing after years of decline, with 138
attacks so far in 2005 compared to 86 attacks in the same
period last year. Such shows of force are typical ETA
maneuvers for demonstrating its military capacity in advance
of discussions with the GOS, but they also vindicate those
who strenuously oppose negotiations and favor an aggressive
police/judicial solution to the ETA problem. Zapatero may be
disappointed by ETA's response, but is probably not surprised
since it fits a historical pattern. Some observers have even
speculated that Zapatero was banking on ETA's violent
response and believed it would further discredit the
organization, but it seems unlikely Zapatero would
consciously accept the risk of dramatic new attacks for so
little gain.

//ZAPATERO SIDELINES DOMINANT BASQUE NATIONALIST PARTIES//


6. (C) Zapatero's moves take place against the backdrop of a
rapidly shifting political landscape in the Basque Region.
Prior to EHAK's assumption of the Batasuna platform during
the March/April campaign for the Basque elections, the PNV
appeared poised to win outright control of the Basque
Parliament. The PNV portrayed the elections as a virtual
plebiscite on Basque government leader Juan Jose Ibarretxe's
plan to hold a referendum on Basque autonomy in defiance of
the central government's rejection of any such referendum.
Ultimately, however, Zapatero succeeded in undermining
nationalist passions by projecting a willingness to negotiate
on the Basque Region's relationship with the national
government. Worse yet for the PNV, EHAK's appearance split
the nationalist vote and gave an option to radical
nationalists who might otherwise have voted to support
Ibarretxe's more moderate vision. PNV politicians are
convinced Zapatero deliberately avoided action against EHAK
in order to deny the PNV the radical nationalist vote and
thereby prevent a PNV majority in the Basque Parliament.


7. (C) As the Basque Parliament prepares to elect a new
"Lehendakari" (Basque Regional president) on June 22, the
PNV's relative decline has become readily apparent.
Opposition parties refused to endorse the PNV's choice for
Parliamentary leader, forcing the PNV to select a new
candidate. For the first time since the early 1990s, the
PSOE is in a position to make a credible bid for leadership
of the Basque government. In order to secure the
Lehendakari's office, Ibarretxe and the PNV will have to bank
on the support of radical EHAK parliamentarians, undermining
the credibility of the PNV at the national level. The Basque
PP, once the most powerful opposition force, is now in third
place behind the PSOE. PSOE outreach to Basque nationalists
and calls for dialogue have kept the PP on the defensive and
forced the PP to assume positions that seem radical and
distasteful to the Basque electorate. At the moment, the
PSOE has the initiative in Basque politics.

//HIGH RISK, HIGH REWARD//


8. (C) Socialist contacts tell us that Zapatero has several
motives for pursuing a high-profile peace effort in the
Basque Region. First and foremost, Zapatero believes that
ETA is weaker than at any point in its history and, despite
bluster to the contrary, can only negotiate from a weak
position. PSOE sources acknowledge that political
considerations are also important; Zapatero's moderate,
inclusive tone has played well in the Basque Region,
strengthening the regional PSOE while isolating the hard-line
PP from other political groups. Zapatero is also driven by
the possibility that he could become the Spanish leader who
finally brings an end to ETA violence, an elusive, historic
achievement that would strengthen his hand on other issues
and cement his political legacy.


9. (C) While final victory over ETA is a tantalizing
prospect, Zapatero's current strategy carries significant
risks. His calculation seems to be that Spanish voters are
tired of ETA violence and are not particular about how peace
is achieved. This may be accurate at the moment, but if ETA
resumes killings the public mood would likely harden and
shift the advantage to those who had advocated a tougher line
against ETA. Some observers believe ETA is playing for time
and will essentially blackmail Zapatero before the 2008
national elections, threatening violent actions that would
discredit and embarrass Zapatero unless he offered
political/legal concessions to ETA. One journalist who has
covered ETA for two decades told us recently that ETA and
radical Basque nationalists feel strengthened and have no
interest in serious peace talks. He suggested that ETA's
political front groups are focused on Basque Region municipal
elections in 2007, when they believe they can achieve de
facto control of broad regions of the Basque country and
nullify Madrid's efforts to illegalize Batasuna and other ETA
front organizations. This would prove a major setback for
Zapatero, given the widespread antipathy throughout Spain
(outside of the Basque Region and Catalonia) towards Basque
nationalist aspirations.


10. (C) It is at the national level that Zapatero is assuming
the greatest risk in adopting a conciliatory stance towards
ETA and towards moderate Basque efforts to achieve broader
autonomy. Even other PSOE leaders, such as Defense Minister
Jose Bono, favor a centralist model and have little patience
for negotiating additional rights for a region they already
see as enjoying unusual privileges. The corrollary to this
centralist bent is intense skepticism of any approach towards
ETA that does not emphasize police action against the group.
While Zapatero has accumulated significant political capital
in his first year in office, enabling him to extend an olive
branch to ETA, his credibility would be seriously damaged by
a botched attempt to win a peace deal with the group. If he
opts to make additional overtures to ETA, such as those in
para 3, the political risks will increase. Likewise, any
revelation that the GOS has engaged in secret talks with ETA
while ETA continued its bombing campaign, would be damaging
to Zapatero unless those talks resulted in clear ETA
concessions. Despite their overall confidence, Zapatero and
his advisers are aware of the political risks they are
incurring and are likely to balance optimism and offers of
dialogue with high profile arrests and denunciations of ETA
violence. That may not be enough to protect Zapatero from a
backlash at a national level if ETA resumes killings.

MANZANARES