Identifier
Created
Classification
Origin
09MADRID308
2009-03-25 14:49:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Madrid
Cable title:
SPAIN: GOVERNMENT FINANCIAL SUPPORT FOR AIRBUS
how-toVZCZCXRO9541 RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR DE RUEHMD #0308 0841449 ZNR UUUUU ZZH R 251449Z MAR 09 FM AMEMBASSY MADRID TO RUEHC/SECSTATE WASHDC 0418 INFO RUCNMEM/EU MEMBER STATES COLLECTIVE RUEHLA/AMCONSUL BARCELONA 3915 RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS MADRID 000308
SENSITIVE
SIPDIS
STATE PASS USTR FOR MARTYN
COMMERCE FOR ELLIOTT, CABLE CODE 6950
STATE FOR KOCH
E.O. 12958: N/A
TAGS: EAIR ECON EIND ETRD EU SP
SUBJECT: SPAIN: GOVERNMENT FINANCIAL SUPPORT FOR AIRBUS
REF: A. SECSTATE 10592
B. PARIS 334
C. MADRID 184
UNCLAS MADRID 000308
SENSITIVE
SIPDIS
STATE PASS USTR FOR MARTYN
COMMERCE FOR ELLIOTT, CABLE CODE 6950
STATE FOR KOCH
E.O. 12958: N/A
TAGS: EAIR ECON EIND ETRD EU SP
SUBJECT: SPAIN: GOVERNMENT FINANCIAL SUPPORT FOR AIRBUS
REF: A. SECSTATE 10592
B. PARIS 334
C. MADRID 184
1. (SBU) Summary. Ministry of Industry, Tourism, and Commerce
officials have not responded to reftel questions on the
Airbus A350. However, media reports, while inconclusive,
suggest that the GOS was in discussions with Airbus in the
fall to provide launch aide for this aircraft, but is now
hesitating. End Summary.
2. (U) President of Airbus Spain Manuel Hita announced in
October that the company had reached preliminary agreement
with its stakeholder countries, including Spain, to finance
development of the A350 through reimbursable, low interest
rate loans. According to Hita, discussions would be ongoing
throughout the following months to determine the terms of the
loans as well as what portion of the estimated 11 billion
euro development costs each country would finance. He
further noted that any agreement reached would be submitted
to the European Commission for approval.
3. (U) Media reports in late January indicate that GOS
officials were having second thoughts about providing
financing for the Airbus 350 project. News that the
Government of France had made available 5 billion euros in
credit to Airbus through prime lenders (ref B) was met by
"interest" from the GOS. However, an unnamed official at the
Ministry of Industry told a leading financial daily that the
GOS was unlikely to provide similar type financing.
4. (SBU) Regardless of whether the GOS decides to provide
support for the A350, this project is somewhat significant
for the GOS. Minister of Industry Miguel Sebastian has
mentioned the A350 project a number of times over the past
year, noting that the project would result in thousands of
new jobs for Spaniards. The minister has also been keen to
highlight a prior agreement with Airbus in which Spanish
businesses would have claim to 12 percent of the production
business of A350 aircraft parts (specifically the production
of compound materials to be used in the tail and other parts
of the plane).
5. (SBU) Comment: The extent to which the GOS is willing to
finance the A350 project will likely be influenced by its
deteriorating public finance situation. The GOS ran a 3.8
percent of GDP budget deficit in 2008, and predict a 5.8
percent deficit in 2009, though the actual deficit may be
even greater.
CHACON
SENSITIVE
SIPDIS
STATE PASS USTR FOR MARTYN
COMMERCE FOR ELLIOTT, CABLE CODE 6950
STATE FOR KOCH
E.O. 12958: N/A
TAGS: EAIR ECON EIND ETRD EU SP
SUBJECT: SPAIN: GOVERNMENT FINANCIAL SUPPORT FOR AIRBUS
REF: A. SECSTATE 10592
B. PARIS 334
C. MADRID 184
1. (SBU) Summary. Ministry of Industry, Tourism, and Commerce
officials have not responded to reftel questions on the
Airbus A350. However, media reports, while inconclusive,
suggest that the GOS was in discussions with Airbus in the
fall to provide launch aide for this aircraft, but is now
hesitating. End Summary.
2. (U) President of Airbus Spain Manuel Hita announced in
October that the company had reached preliminary agreement
with its stakeholder countries, including Spain, to finance
development of the A350 through reimbursable, low interest
rate loans. According to Hita, discussions would be ongoing
throughout the following months to determine the terms of the
loans as well as what portion of the estimated 11 billion
euro development costs each country would finance. He
further noted that any agreement reached would be submitted
to the European Commission for approval.
3. (U) Media reports in late January indicate that GOS
officials were having second thoughts about providing
financing for the Airbus 350 project. News that the
Government of France had made available 5 billion euros in
credit to Airbus through prime lenders (ref B) was met by
"interest" from the GOS. However, an unnamed official at the
Ministry of Industry told a leading financial daily that the
GOS was unlikely to provide similar type financing.
4. (SBU) Regardless of whether the GOS decides to provide
support for the A350, this project is somewhat significant
for the GOS. Minister of Industry Miguel Sebastian has
mentioned the A350 project a number of times over the past
year, noting that the project would result in thousands of
new jobs for Spaniards. The minister has also been keen to
highlight a prior agreement with Airbus in which Spanish
businesses would have claim to 12 percent of the production
business of A350 aircraft parts (specifically the production
of compound materials to be used in the tail and other parts
of the plane).
5. (SBU) Comment: The extent to which the GOS is willing to
finance the A350 project will likely be influenced by its
deteriorating public finance situation. The GOS ran a 3.8
percent of GDP budget deficit in 2008, and predict a 5.8
percent deficit in 2009, though the actual deficit may be
even greater.
CHACON