SPAIN'S MEASURED WELCOME OF EVO MORALES

C O N F I D E N T I A L MADRID 000032

SIPDIS

E.O. 12958: DECL: 01/04/2016
TAGS: PGOV PREL SP BO
SUBJECT: SPAIN'S MEASURED WELCOME OF EVO MORALES

REF: SECSTATE 1353

Classified By: Poloff Ricardo Zuniga for reasons 1.4 (b) & (d).


1. (SBU) SUMMARY. Bolivian President-elect Evo Morales met
in Madrid on January 4 with the King, President Zapatero, the
Foreign and Industry Ministers, and business leaders. The
GOS focused Morales' visit on economic issues, including
Spanish energy company Repsol's billion dollar investment in
Bolivia and a GOS commitment to cancel a majority of
Bolivia's USD 120 million debt to Spain in exchange for
increased spending on education. In a meeting with Spain's
major business group, Morales said the "White House" had
"boycotted him" until just 48 hours before his election, but
also noted that he had had a good meeting with the U.S.
Ambassador in La Paz. President Zapatero withdrew from a
planned joint press conference with Morales. Morales arrived
in a Venezuelan plane with Venezuelan bodyguards, but the GOS
declined to let the Venezuelans escort Morales to his
meetings. END SUMMARY.


2. (SBU) Morales had lunch with the Spanish Confederation of
Employers' Organizations (CEOE),Spain's main umbrella
business group. Among the 30 attendees was the president of
Repsol, which controls a third of Bolivia's gas supply.
Morales later told the press that Bolivia "needs partners in
the foreign private sector, but not landlords or owners of
its natural resources." He said that the only companies that
need to worry are the ones that don't pay their taxes or act
like smugglers. He also repeated his now familiar line that
"nationalizing does not mean confiscating or expelling."
Morales alluded to the apparent agreement of Brazilian energy
company Petrobras to partner with the Bolivian state energy
company as an example of the type of cooperation he
envisioned with foreign investors.


3. (C) Jose Maria Lacasa, CEOE head of international
relations, told Econoff that his group was pleased that
Morales had come to talk to the group. He said that CEOE
sees a positive sign in Morales' openness to dialog. Lacasa
noted that Morales offered a "prudent" but "unstructured"
talk and seems to have some substantive gaps. During his
talk, Morales was harshly critical of the Bolivian business
community and government corruption, but acknowledged that he
has much to learn and that things are more complicated than
they might appear. Morales also told the group that the
"White House" had "boycotted him" until just 48 hours before
his election, but noted that he had had a good meeting with
the U.S. Ambassador in La Paz.


4. (SBU) Though he emphasized to Morales that Spanish
businesses in Bolivia need to see signs of stability and
confidence in order to continue their investments, Industry
Minister Jose Montilla acknowledged publicly that the "rules
of the game have changed." Foreign Minister Miguel Angel
Moratinos also talked business with Morales, noting that
Spain is a principal foreign investor in Bolivia and would
like to see more investment if possible. An MFA statement
released following the Moratinos' meeting with Morales
offered Spain's support for the "strengthening of political,
economic, and social stability" in Bolivia and noted both
Spain's role as a major foreign investor in Bolivia and its
substantial aid program there (which will climb from
approximately $50 million in 2004 to $70 million in 2006).
Separately, the Spanish government announced its decision to
forgive the majority of Bolivia's $120 million in official
debt to Spain so that the Bolivian government can redirect
those funds to education programs. Morales received a
courteous welcome to all his meetings with the GOS, but
President Zapatero withdrew from a planned joint press
conference with Morales and the GOS declined to let
Venezuelan bodyguards escort Morales to his meetings.


5. (C) COMMENT. The GOS, clearly glad to have a chance to
talk to Morales about Repsol and other investments in
Bolivia, carefully controlled the visit and avoided any
public discussion of Latin American politics. For his part,
Morales, at least during the first day of his visit,
moderated his message significantly from what he had said
during his recent appearances in Caracas and Havana.
MANZANARES