Identifier
Created
Classification
Origin
09MADRID1115
2009-11-20 16:22:00
UNCLASSIFIED
Embassy Madrid
Cable title:  

MADRID ECONOMIC WEEKLY, NOVEMBER 16-20

Tags:  ECON ECPS EFIN EIND EINV ENRG KIPR PGOV SP 
pdf how-to read a cable
VZCZCXRO4335
RR RUEHIK
DE RUEHMD #1115/01 3241622
ZNR UUUUU ZZH
R 201622Z NOV 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 1456
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 4211
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 03 MADRID 001115 

SIPDIS

STATE FOR EUR/WE, EEB/TPP/IPE, EEB/CIP, EEB/IFD/OMA
STATE PASS USTR FOR D.WEINER AND J.GROVES
STATE PASS U.S. COPYRIGHT OFFICE FOR M.WOODS AND M.PALLANTE
COMMERCE FOR 4212/DON CALVERT AND 6990/R.LAYTON
COMMERCE ALSO FOR USPTO
TREASURY FOR OAI/OEE R.JOHNSTON
ENERGY FOR PIA:K.BALLOU

E.O. 12958: N/A
TAGS: ECON ECPS EFIN EIND EINV ENRG KIPR PGOV SP
SUBJECT: MADRID ECONOMIC WEEKLY, NOVEMBER 16-20

REF: A. MADRID 1095

B. MADRID 1052

C. MADRID 434

MADRID 00001115 001.3 OF 003


Contents:

EFIN: Central Bank Governor Says At Least 15 Cajas Should
Disappear
ENRG/EINV: GOS Approves Several Years of Renewable
Electricity Projects
ENRG: Electricity Commission Says 18% Rate Hike Needed
ECPS: Industry Minister Announces Right to Broadband Internet
Access
KIPR: Intellectual Property Rights-Holders Win Two Court Cases
EIND/ENRG: Industry Minister Hosts Electric Vehicle Summit
PGOV: TI Public Sector Corruption Ranking Worse Again

Central Bank Governor Says At Least 15 Cajas Should Disappear
UNCLAS SECTION 01 OF 03 MADRID 001115

SIPDIS

STATE FOR EUR/WE, EEB/TPP/IPE, EEB/CIP, EEB/IFD/OMA
STATE PASS USTR FOR D.WEINER AND J.GROVES
STATE PASS U.S. COPYRIGHT OFFICE FOR M.WOODS AND M.PALLANTE
COMMERCE FOR 4212/DON CALVERT AND 6990/R.LAYTON
COMMERCE ALSO FOR USPTO
TREASURY FOR OAI/OEE R.JOHNSTON
ENERGY FOR PIA:K.BALLOU

E.O. 12958: N/A
TAGS: ECON ECPS EFIN EIND EINV ENRG KIPR PGOV SP
SUBJECT: MADRID ECONOMIC WEEKLY, NOVEMBER 16-20

REF: A. MADRID 1095

B. MADRID 1052

C. MADRID 434

MADRID 00001115 001.3 OF 003


Contents:

EFIN: Central Bank Governor Says At Least 15 Cajas Should
Disappear
ENRG/EINV: GOS Approves Several Years of Renewable
Electricity Projects
ENRG: Electricity Commission Says 18% Rate Hike Needed
ECPS: Industry Minister Announces Right to Broadband Internet
Access
KIPR: Intellectual Property Rights-Holders Win Two Court Cases
EIND/ENRG: Industry Minister Hosts Electric Vehicle Summit
PGOV: TI Public Sector Corruption Ranking Worse Again

Central Bank Governor Says At Least 15 Cajas Should Disappear

1.(U) Bank of Spain Governor Miguel Angel Fernandez Ordonez
told the Financial Times that he believed at least 15 of
Spain,s 45 savings bank ("cajas") should merge with others
and disappear as independent entities. He said the central
bank was discussing many such mergers, and he expressed hope
that by spring the restructuring would be complete.
Separately, EC Competition Commissioner Neelie Kroes urged
Spain to explain the plans for operation of the Orderly
Banking Restructuring Fund (FROB) and said that as soon as
the GOS decided and informed the EC, the EC would act as
quickly as possible. The Commission has indicated that it
will want to approve each operation on a case-by-case basis
unless the FROB framework is changed to give authorities less
discretion. The GOS would prefer to receive a single blanket
approval beforehand. (Financial Times, 11/16; El Pais, 11/19)

GOS Approves Several Years of Renewable Electricity Projects

2.(U) On November 13, the Council of Ministers approved a

calendar of corporate projects to generate electricity using
wind and solar thermal technology. These projects will be
eligible for generous feed-in tariffs (guaranteed prices) for
the life of the projects. The tariffs will eventually be
added to consumers, bills; solar thermal tariffs are
significantly higher than those for wind power. Counting
2009 projects, the calendar will add over 7,000 megawatts
(MW) of wind capacity by the end of 2012 and about 2,400 MW
of solar thermal capacity by the end of 2013. Wind power
capacity will grow a little less rapidly than it has averaged
over the last several years, while the solar thermal industry
is new, with only one project having been in place before
this year. Of the 55 solar thermal plants approved, Abengoa
will build 13, ACS 6, and Acciona 5. The U.S. firm NextEra
received approval for two solar thermal projects totaling 100
MW, and two other projects totaling 70 MW use the technology
of U.S. company Infiniasolar. The GOS also envisions almost
2,000 MW of solar photovoltaic projects being added from 2009
to 2012. Wind power has generated almost 13% of Spain,s
electricity this year, while the percentage of both forms of
solar power combined remains in the low single digits but
will rise as the approved projects are built. (Comment:
Although the GOS action gives certainty to the companies
whose projects were approved, it also appears to make it more
difficult for companies to start any other new wind or solar
thermal projects in the next few years, even projects that
might be less costly if technology improves between now and
then.) (Cinco Dias, 11/14, Ministry of Industry, Tourism,
and Commerce, 11/13, Embassy)

Electricity Commission Says 18% Rate Hike Needed

3.(U) The National Electricity Commission (CNE) has told the
Ministry of Industry, Tourism, and Commerce that it will need
to raise electricity rates by over 18% in January if it is to
pay for planned incentives for the use of domestic coal and
keep the 2010 increase in the accumulated "tariff deficit" to
the 3 billion euros called for in a June decree. The GOS has
been holding retail electricity prices below the cost of
production for several years, and its resulting tariff
deficit owed to electricity generators is over 16 billion
euros. A June decree codified an agreement with producers
(Ref C) by which the GOS will gradually raise rates in order

MADRID 00001115 002.3 OF 003


to eventually stop adding to the deficit. (Comment: The
Ministry is not expected to raise rates by 18%, especially in
the current economic situation. The coal incentives are
politically important to President Zapatero, so it seems
likely that holding the line on the tariff deficit increase
will have to give. This discrepancy between costs and rates
may be aggravated in future years as more high-tariff solar
projects begin operation.) (El Pais, 11/17 and 11/19)

Industry Minister Announces Right to Broadband Internet Access

4.(U) Speaking at the opening ceremony of the third annual
International Forum on Digital Content (FICOD)(septel),
Minister of Industry, Tourism, and Commerce Miguel Sebastian
announced that as of January 1, 2011, the universal
telecommunications services package to which all citizens are
entitled will include Internet access with minimum speed of 1
megabyte per second (mbps). To effect this new entitlement,
the government will need to pursue legislative or regulatory
changes. While the vast majority of Spaniards already have
access faster than 1 mbps, the new rule will require telecoms
to provide services in underserved (and unprofitable) rural
areas. For this reason, ISP association Redtel has expressed
strong opposition to the measure. The government hopes that
the change will stimulate ISPs to upgrade their networks and
offer more broadband at lower prices. Only 11% of Internet
users in Spain have more than 10 mbps service, much lower
than in most other European countries, and prices are among
the highest in Europe. (El Pais, 11/18; Embassy)

Intellectual Property Rights-Holders Win Two Court Cases

5.(U) On November 12, an appellate court in Barcelona ruled
against the operators of a website that was making video
games available without authorization via peer-to-peer
platforms. The operators were seeking to have the case
thrown out on the grounds that they were only providing
links. The Barcelona Provincial Court cited the 2006
Intellectual Property Law, which states that copies of
protected works may be made only so long as they are not for
collective or profitable use, and found that the website was
earning advertising revenues. This ruling comes on the heels
of a similar decision handed down in September by the Murcia
Provincial Court (Ref B). In related news, a judge in
Pamplona (Navarra) sentenced a man to 15 months in prison for
selling pirated copies of video games from his website and
altering Play Station 2 consoles to enable them to play
pirated games. Content industry representatives see in these
cases signs of hope that Spanish courts may be beginning to
appreciate the economic harm perpetrated by Internet pirates.
(El Pais, 11/14 and 11/17)

Industry Minister Hosts Electric Vehicle Summit

6.(U) Industry and Commerce Minister Sebastian and leaders
from several government bodies and companies agreed to
prepare in the first quarter of 2010 a comprehensive plan for
the development of electric and hybrid plug-in vehicles.
Sebastian's "Electric Vehicle Summit" included
representatives from his ministry, the economy ministry,
provincial and municipal governments, leading energy,
information technology, communication, and auto companies
(including Ford and Opel/GM),and the European Commission.
The plan will initially focus on the development of the
electric car in urban centers, with future plans for
large-scale production. The national government will provide
incentives to promote investment and spur demand, while
regional and local governments will contribute to the
development and installation of charging infrastructure.
Companies, efforts will include standardization of systems
to facilitate the development of the sector. (Presidency
Statement, 11/18; ABC, 11/19)

TI Public Sector Corruption Ranking Worse Again

7.(U) Spain tied for the 32nd best score out of 180 countries
in Transparency International's annual ranking of perceptions
of public sector corruption, released this week. The
country's ranking has declined each year since 2006, when it
was perceived as the 23rd best. (Comment: Because TI relies
on other surveys released during the past two years, the

MADRID 00001115 003.3 OF 003


ranking likely does not reflect the impact of recent
revelations of corruption by regional and local governments.)
(www.transparency.org, 11/17)
CHACON