SPAIN'S TRILATS RE:GIBRALTAR & BILATS WITH UK

C O N F I D E N T I A L MADRID 000839


FOR EUR/WE, NEA/IR

E.O. 12958: DECL: 08/20/2029
TAGS: EFIN PGOV PREL SP IR
SUBJECT: SPAIN'S TRILATS RE:GIBRALTAR & BILATS WITH UK
RE:IRAN

Classified By: Charge William H. Duncan for reasons 1.4 (b) and (d)


1. Summary. FM Moratinos attended a Spain-UK-Gibraltar
ministerial meeting on July 21 in Gibraltar, the first time
in 300 years a Spanish Minister has set foot on the Rock.
While Moratinos received significant negative press from
critics who believed his trip weakened sovereignty claims, he
insisted that it was essential to defend Spain's interests,
attempt a new approach to achieve national goals and find a
common solution. After the tripartite Gibraltar ministerial,
Moratinos and UK Foreign Secretary Miliband held a dinner
meeting in Spain that focused on Iran (see para. 11). The
British Embassy in Madrid continues to be concerned about
Spain's role in EU deliberations on next steps regarding
Iranian proliferation and potential high-level Spanish
delegations to Teheran. End Summary.


2. (U) In a historic July 21 visit, Foreign Minister
Moratinos participated in a ministerial meeting of the
Tripartite Dialogue Forum" with UK Foreign Secretary David
Miliband and Gibraltar Principal Minister Peter Caruana. It
was the first time in 300 years a Spanish Minister set foot
in Gibraltar since it was ceded to Britain under the Treaty
of Utrecht. The Spanish Foreign Affairs Ministry maintained
a subtle distinction that Moratinos' presence did not
constitute an official visit to the territory; instead
Moratinos was only participating in a tripartite dialogue
that had already held ministerial sessions in London and
Madrid -- protocol dictated the location. The Spanish MFA
also stressed that meaningful dialogue was the only way
forward and that hard-line stances of the past only
marginalized broader Spanish interests. An MFA spokesperson
emphasized, "the forum does not deal with sovereignty
issues," noting that Moratinos presence in no way prejudiced
any claims of sovereignty.


3. (C) The tripartite forum aims to increase cooperation on
the environment, financial services, law enforcement and
customs, education, maritime security, communications and
visa matters. A British Embassy in Madrid contact who
participated in the sessions said that the dialogue is
structured to allow regular exchanges of views, while
minimizing any controversial issues such as sovereignty of
the territorial waters around the Rock. For example, with
regard to maritime cooperation and a proposed ferry service
between Gibraltar and Algeciras, Spain, the British POLOFF
projected that feasibility and economic impact studies could
continue for several years, if not longer. We understand
from both the British Embassy and the Spanish MFA that they
are in agreement that the overall bilateral relationship has
much more important elements than Gibraltar, and the
tripartite discussions are a way to move forward on specific
projects while avoiding difficult differences of opinion
regarding the Treaty of Utrecht, its provisions and current
implications. The forum is also structured in a way that
each ministerial session will result in some type of
announced agreement to maintain a perception of progress.


4. (C) An eighteen-page document summarizes the results of
the July ministerial session. Negotiations are moving
forward on a tax information sharing agreement based on OECD
models, which will include mechanisms to prevent money
laundering and terrorism finance, as well as fiscal and
financial fraud. According to the British Embassy,
modalities need to be discussed. While the substance of the
agreement is moving forward, Spain will not sign a document
with Gibraltar, and Gibraltar will not allow the UK to sign a
document on its behalf. British diplomats and their
counterparts are exploring alternatives. Another priority is
a maritime cooperation agreement that would allow a quick
response to any environmental disasters, specifically
provisions that would allow Spanish emergency teams to
operate in waters claimed by Gibraltar or the UK.


5. (C) The next working group will discuss a joint airport
project that is important to Spain in terms of economic
development. Moratinos has proposed that Spaniards access
the runway through tunnels from La Linea, Spain, thereby
allowing Spaniards to feel they are departing from their own
country because they won't have to present identification at
the border. The UK and Gibraltar had planned a follow-on
meeting in mid-September, but now the Spanish have asked for
more time to organize their delegation and reports.


6. (C) As part of the education component, Moratinos
announced that a Cervantes Institute cultural center will
open in Gibraltar before 2010, under the direction of a
former Chief of Studies of the Spanish Diplomatic School.
Current polling shows that the vast majority of Gibraltar
residents do not want the territory to come under Spanish
control. Moratinos has remarked that Spain needs to, "win
the hearts and minds," of Gibraltar residents as part of a
long term process of achieving its objectives.

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300 YEARS LATER - THE ROCK IS STILL A HARD PLACE FOR MORATINOS
--------------


7. (U) In terms of Spanish public opinion, Moratinos
encountered significant negative press commentary,
particularly from the opposition Partido Popular (PP) that
has always taken a hard-line on Gibraltar. The timing of the
tripartite session was not optimal, coming between Moratinos'
visits to Equatorial Guinea and Venezuela, both criticized by
some as putting Spain's trade and business interests ahead of
human rights and good governance. According to the press,
the Gibraltar opposition was also against Moratinos' visit
and his meeting with Peter Caruana due to Spain's claim to
the waters around the Rock.


8. (U) Both the PP and the small, centrist Union for
Progress and Democracy party described Moratinos' visit as
despicable, irresponsible, and a terrible mistake. PP leader
Mariano Rajoy commented acidly that Moratinos was the first
foreign minister in history to make an official visit to his
own country. Even left-of-center daily El Pais published an
editorial opining that Moratinos' participation, versus the
participation of another Ministry official, might be seen as
ambiguous both inside and outside Spain in terms of
sovereignty claims. An El Pais poll determined that public
opinion was split with 50 percent for/50 percent against the
Gibraltar visit. On August 15, PP Foreign Affairs
Coordinator Gustavo Aristegui stirred the pot again, accusing
Gibraltar authorities of piracy for sending armed vessels
into territorial waters claimed by Spain. He also claimed
that Gibraltar was expanding its territory with landfill that
included contaminated materials.


9. (U) In an attempt to calm down Spaniards during a
post-ministerial press conference, Moratinos said again that
the question of the sovereignty had never been on the table,
adding that Spain's claims over Gibraltar are unalterable and
acknowledged by all parties. Moreover, Moratinos said, "I
don't regret having gone to Gibraltar. On the contrary, I
went there to defend Spain's interests." Addressing the PP
criticism, Moratinos said, "It is only a minority that has
taken this outdated nationalist stance. Our national dignity
has been damaged by a policy that has not worked for over 300
years. What we have done is take a new approach to achieve
our aims. We have to find a solution that meets the needs of
all involved."


10. (U) And the Zapatero administration is continuing
damage control to counter the PP opposition - on August 18
the MFA announced that the GOS would file a supporting brief
at the European Commission against an appeal launched by the
UK and Gibraltar. The appeal seeks to annul a December 2008
European Commission decision recognizing Spanish control over
the waters surrounding Gibraltar. This is the first time the
dispute over territorial waters around Gibraltar has been
raised to the EU's Justice Tribunal. Spain is basing its
legal brief on its claims that the Treaty of Utrecht only
cedes to the British Crown the city and fortress of
Gibraltar, along with the port and defensive structures.
Spain claims the treaty does not include the isthmus,
territorial waters or airspace.

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BILATERAL SPAIN-UK TALKS FOCUS ON IRAN
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11. (C) Given the sensitivity of sovereignty claims, it was
not possible to hold a bilateral Spain-UK meeting on the
margins of the tripartite session. The British Embassy told
us that Miliband flew to Jerez, Spain for a dinner meeting
with Moratinos. British Embassy POLOFF said that Iran was a
main topic of conversation, with Miliband stressing the need
for EU unity on next steps regarding Iranian proliferation.
Noting that Iran had responded to serious threats of
sanctions in the past, Miliband argued that the credible
threat of sanctions could move things in the right direction.
However, Moratinos continued to believe that dialogue was
the only way forward and that putting pressure on the Iranian
regime would only result in counter-productive behavior.
Miliband told Moratinos that others would look to Spain to
provide leadership on the issue during its January-June 2010
EU Presidency. British POLOFF also said that Spain
continued to give hints that they might undertake a
high-level visit to Iran "if the conditions were right" and
the UK suspected that Spain might schedule a visit during the
EU Presidency, adding that absent a dramatic change in Iran's
stance, any proposed travel by Moratinos to Iran would result
in a Miliband phone call advising against the move.


DUNCAN