Identifier
Created
Classification
Origin
08MADRID34
2008-01-14 15:58:00
CONFIDENTIAL
Embassy Madrid
Cable title:  

SPAIN: POTENTIAL ECONOMIC BENEFIT OF EXPANDED

Tags:  PREL ETRD LY SP 
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VZCZCXRO1549
RR RUEHAG RUEHROV
DE RUEHMD #0034/01 0141558
ZNY CCCCC ZZH
R 141558Z JAN 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 4062
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAS/AMEMBASSY ALGIERS 3985
RUEHEG/AMEMBASSY CAIRO 0133
RUEHTRO/AMEMBASSY TRIPOLI
RUEHRB/AMEMBASSY RABAT 6081
RUEHTU/AMEMBASSY TUNIS 0559
C O N F I D E N T I A L SECTION 01 OF 03 MADRID 000034 

SIPDIS

SIPDIS

DEPARTMENT FOR EUR/WE, NEA/ELA

E.O. 12958: DECL: 01/18/2018
TAGS: PREL ETRD LY SP
SUBJECT: SPAIN: POTENTIAL ECONOMIC BENEFIT OF EXPANDED
LIBYA RELATIONSHIP LAUDED AFTER QADHAFI VISIT

MADRID 00000034 001.2 OF 003


Classified By: DCM Hugo Llorens for reasons 1.4 (b) and (d)

C O N F I D E N T I A L SECTION 01 OF 03 MADRID 000034

SIPDIS

SIPDIS

DEPARTMENT FOR EUR/WE, NEA/ELA

E.O. 12958: DECL: 01/18/2018
TAGS: PREL ETRD LY SP
SUBJECT: SPAIN: POTENTIAL ECONOMIC BENEFIT OF EXPANDED
LIBYA RELATIONSHIP LAUDED AFTER QADHAFI VISIT

MADRID 00000034 001.2 OF 003


Classified By: DCM Hugo Llorens for reasons 1.4 (b) and (d)


1. (C) SUMMARY. During Libyan leader Qadhafi's first
official visit to Spain, December 15-18, MOUs were concluded
on defense, economic cooperation and investment.
Negotiations are still underway on a double taxation treaty.
Qadhafi's visit began with a private two-day visit to
Andalucia, followed by a productive official visit in Madrid
that focused on Libya's renouncement of terrorism, as well as
potential trade and investment opportunities. The Spanish
Government estimated that Spanish trade and investment with
Libya could increase by 17 billion dollars (2 billion in the
defense and aeronautical areas, 5 billion in the energy
sector, and 10 billion in infrastructure). The Spanish MFA,
in both the meeting agenda and public statements, sought to
reinforce the message that Libya was moving in the right
direction since it had renounced terrorism, and that Spain
was helping it stay the course. Despite the agreements
signed with Spain, Qadhafi left a clear impression that
Africa continues to be his main priority. END SUMMARY.

2. (SBU) Libyan leader Qadhafi's first visit to Spain,
December 15-18, ended with the announcement of several
accords and the lauded potential of significant opportunities
for Spanish business interests. Apart from criticism by the
United Left (IU) political party, and an initial, negative
editorial in the influential daily paper El Pais, most of the
press was very positive at the end of the visit. However,
the initial El Pais editorial argued, "Qadhafi's visit goes
against the GOS declared principles on foreign policy. No
matter how succulent the economic deal might be, the effect
of this contradiction for democracy in Africa is
devastating." Counteracting the initial negative press,
Qadhafi spoke out against terrorism during his visit, citing
the commonality of interests between Spain and Libya. He
also called for action to end illegal migration flows through
increased investment in Africa to address economic and social
problems. Qadhafi told the press he believed there was a

special closeness between Libya and Spain, saying, "Spaniards
who work in my country do not seem like foreigners."
Qadhafi's positive statements about the need to confront
terrorist threats resonated with the Spanish populace.
Spanish officials used their public statements to emphasize
common interests in promoting peace and security, continually
hitting on the theme of rejection of violence.

3. (C) Apart from the news accounts about potential
business opportunities and the anti-terrorism statements,
Qadhafi's presence provided many picaresque descriptions of
his idiosyncrasies -- his unusual clothing, the size of his
huge entourage, the motorcade of over fifty vehicles, the
tents staked on the grounds of his accommodations, the
butchers providing fresh meat for his banquets, his
fascination with the Spanish flamenco performers... Qadhafi,
sporting scraggly, dyed black hair and sparse mustache and
goatee, arrived in Seville on Saturday, December 15 for a
personal visit in advance of his official program on December
17-18. Instead of meeting, as anticipated, with the Spanish
Islamic Community and a workers' union, Sindicato de Obreros
del Campo, Qadhafi invited former President Aznar and his
wife, Ana Botella, to dinner. Aznar was the first world
leader to visit Libya in 2003 after UN sanctions were lifted.
It was expected that Qadhafi would tour historic Islamic
sites in the Andalucia region or go hunting in the foothills
of the Sierra Nevada. However, unexpectedly, he left Seville
on Sunday to visit Marbella on the coast, where he reportedly
enjoyed a flamenco performance (and paid an extravagant
amount to have the performers give a repeat performance later
in Madrid). MFA officials did not have any role in the
weekend agenda, which was arranged and paid for by the Libyan
Embassy, although Spanish government protocol officials
liased with the Libyan Embassy staff. MFA contacts confided
to poloff that the schedule was a planning nightmare, with
the Spanish protocol staff bearing the brunt of constant
changes and demands from the estimated 350-person Qadhafi
entourage that filled three Afriqiyah Airline planes. While
Qadhafi's appearance was disheveled and his face, in
photographs, seemed swollen and with limited range of motion,
MFA officials who saw him during meetings said that he was
able to communicate effectively and his health appeared
stable. The MFA staff after the visit seemed to give a
collective sigh of relief and on balance the visit was
considered a positive development. Indeed, Qadhafi refrained
from making any outrageous statements and the government did
not face criticism on human rights issues. In addition, the
visit offered the potential for major economic and commercial

MADRID 00000034 002.2 OF 003


gains and the Libyan leader left feeling pleased with the
reception from his Spanish hosts.

4. (C) In order to counteract any criticism about Qadhafi's
visit, the MFA carefully constructed an agenda focused on
positive aspects of engaging with Libya and bringing it into
more constructive activities. There had been concern among
MFA officials that potential Qadhafi outrageous statements or
behavior might open the government to strong criticism, but
it seemed that Qadhafi got all the vitriol out of his system
during his prior stay in Paris. MFA North Africa Deputy
Director General Manual Gomez-Acebo told poloff that his team
was careful to make sure that the GOS' public statements did
not overstate any results from the Qadhafi visit, only
alluding to potential trade and commercial ties on the
horizon. The main message was that Libya was moving in the
right direction since it had renounced terrorism, and that
Spain was helping it stay the course. Asked why Qadhafi
seemed to be relatively tame during the visit to Spain,
Gomez-Acebo gave three theories. He gave most credence to
the theory that Qadhafi was "enchanted" by Spain, given the
affinities with Libyan culture Qadhafi would have noted
during his introduction to Andalucia with its Moorish
heritage and the remaining goodwill from Aznar's earlier
visit to Libya. The second theory was that Qadhafi "got it
out of his system" during his time in France, or that his
Libyan advisors got him to tone down his statements after
negative remarks by the French press corps. Third was the
speculation that Qadhafi was always unpredictable, and it was
just luck that his visit to Spain ended smoothly, despite all
the logistical complications behind the scenes. The MFA
final assessment was that despite the many benefits that
could accrue to Libya through good governance and other
multilateral activities, Qadhafi was still not interested in
any meaningful engagement. Qadhafi left a clear impression
that Africa continues to be his main priority, despite the
recent stops in France and Spain. Gomez-Acebo said that
Qadhafi gave Spanish interlocutors plenty of rhetoric about
his self-styled leadership role for the African continent.

5. (SBU) In Madrid for the official program, after a
military review at the Pardo Palace where the government
provided accommodation, Qadhafi had lunch with King Juan
Carlos, Minister of Culture Cesar Antonio Molina, Minister of
Health Bernat Soria, and Madrid Mayor Alberto Ruiz-Gallardon.
Qadhafi also dined with President Zapatero, Minister of
Economy Pedro Solbes, Minister of Foreign Affairs Miguel
Angel Moratinos and business representatives. In terms of
ongoing trade and commercial projects, the Spanish
construction firm Sacyr Vallehermoso has an agreement to
participate in infrastructure development. Abengoa has
contracts for electric cabling and water infrastructure.
Indra is developing a new air traffic control system for
Libya. In addition to the oil exploration and production
activities of Repsol, other firms cited for potential Libyan
investment include Conservas Calvo (fish canning) and Mantas
Mora (wool products). Qadhafi told Javier Gomez Navarro,
President of the High Council of Chambers of Commerce, that
Libya sought offers for joint projects in tourism,
construction, textiles, electronics, defense and hydrocarbon
infrastructure.

6. (C) At the end of the visit, Qadhafi and Zapatero
signed memoranda of understanding (MOUs) on promotion and
protection of investments, economic cooperation, and defense
cooperation. The two governments were not able to conclude a
double taxation agreement, but Spain agreed to consider the
Libyan text of its existing taxation treaties with France and
Germany. In addition to the MOUs, Spain and Libya issued a
political declaration in which they agree to strengthen
coordination and exchange information in a number of areas,
including counterterrorism and illegal migration. The
political declaration specifically rejected linking terrorism
to any nation, culture, or religion, and called for dialogue
through initiatives such as the Alliance of Civilizations.
Spain and Libya agreed to hold yearly meetings of their
Ministers of Foreign Affairs and to increase bilateral
contacts among other institutions (Parliament, Autonomous
Communities, municipalities, universities, etc.). Both
countries agreed to Armed Forces cooperation through training
courses and joint exercises. The MFA said that the Libyans
had pressed at the last minute for some MOUs that could be
signed, after months of stalling on any negotiations broached
by the Spanish Embassy in Tripoli. It was only in the week
before the visit that some innocuous general agreements were
finalized for signature. (Copy of Spanish text obtained from
MFA has been scanned and emailed to Embassy Tripoli).

MADRID 00000034 003.2 OF 003


Asked if Libyan Secretary for European Affairs Abdulati
Obeidi participated in the visit or negotiated any of the
documents, Gomez-Acebo said that Obeidi was not an important
contact for the Spanish mission. They worked their
interests directly through Qadhafi's personal staff and his
"chef de cabinet" or through Musa Kusa, one of whose sons
lives in Andalucia.

7. (SBU) In the assessment of palace watchers and protocol
experts, the level of ceremony accorded to Qadhafi fell short
of that accorded other dignitaries. It was noted that King
Juan Carlos was gracious and polite, but seemed to have
little patience for Qadhafi's quirkiness. Newspaper
accounts described "an abbreviated" military review for the
Libyan leader and speculated that the palace protocol
reflected the ambiguity of the "brother leader's" position on
any government organization chart. The Partido Popular (PP)
and Partido Socialista de Obreros Espanol (PSOE) generally
agreed on their assessment of the visit. PP Secretary
General Angel Acebes said that Spanish foreign policy must be
based on the defense of national interests and respect for
Human Rights, while PSOE Secretary General Pepe Blanco said
that the GOS had considered that this was the right moment to
establish commercial relations that will be very positive for
Spain. Spain is Libya,s third largest customer for fuel,
after Italy and Germany. In 2006 Spain imported 3.7 billion
euros, and exported 85 million to Libya. The Spanish
Government estimated that Spanish trade and investment with
Libya could increase by 17 billion dollars (2 billion in the
defense and aeronautical areas, 5 billion in the energy
sector, and 10 billion in infrastructure.)

8. (U) Tripoli minimize considered.
AGUIRRE