A/S VALENZUELA DISCUSSES LATIN AMERICA WITH BERNARDINO LEON

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10MADRID187 18 February 2010 Confidencial Embassy Madrid

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C O N F I D E N T I A L SECTION 01 OF 03 MADRID 000187

SIPDIS

JUAN GONZALEZ, WHA
BILL MCILHENNY, WHA/PPC
ALEXANDRA MCKNIGHT AND STACIE ZERDECKI, EUR/WE

E.O. 12958: DECL: 02/09/2020
TAGS: PREL, PGOV, CU, SP
SUBJECT: A/S VALENZUELA DISCUSSES LATIN AMERICA WITH
BERNARDINO LEON

REF: MADRID 87

Classified By: DCM Arnold A. Chacon, for reasons 1.4(b) and (d).

1. (C) SUMMARY: During an excellent and extremely cordial
meeting that lasted over two hours on February 1, WHA
Assistant Secretary Arturo Valenzuela and NSA-equivalent
Bernardino Leon, Secretary General of the Office of the
Presidency, discussed prospects for U.S.-Spanish cooperation
in Latin America and Spanish priorities in the region during
its rotating presidency of the Council of Europe. The two
discussed recent efforts in Haiti, ongoing European trade
ties with the region, threats to democracy in Venezuela and
Nicaragua, and human rights in Cuba. The first GOS
interlocutor to meet with Valenzuela during his February 1-3
visit to Madrid, Leon received Valenzuela warmly, saying
Valenzuela had "many friends" and admitting that he had
wanted to meet Valenzuela for a long time. END SUMMARY.

2. (C) Leon spoke of President Zapatero’s busy agenda
including trips to Davos and Ethiopia and his visit to
Washington, DC, for the February 4 National Prayer Breakfast.
Reviewing the themes of Spain’s EU Presidency, Leon said
Zapatero hoped the May 2010 EU-Latin America Summit would
"transform" the economic relationship between Europe and the
region and he spoke of efforts to negotiate a number of trade
agreements and to bring closure to the EU’s pact with Central
America. Regarding the Andean agreement, he said Ecuador
hoped for a more bilateral agreement and he described Bolivia
as a very difficult case, due to the coincidence of a lack of
experience in trade negotiations combined with a lack of
technical expertise in government. There had been no action
to support "expressions of will" from MERCOSUR. Regarding
Argentina in general, Leon told Valenzuela he shared his
exact frustrations — but agreed they would need five days to
discuss.

//CUBA//

3. (C) Regarding Spain’s reported lobbying to replace the
EU’s Common Position toward Cuba, Leon cautioned Valenzuela
not to believe everything he read in the press. Leon did not
foresee a huge change in EU policy toward the island. He was
careful to clarify statements by Secretary of State for
IberoAmerica Juan Pablo de Laiglesia (with whom Valenzuela
met later on February 1) as referencing a "internal
reflection" and brainstorming within the EU about a path to
democratic change. President Zapatero had never met either
of the Castros and would not visit Cuba without progress as
yet unseen (and certainly not within the next six months).
Leon frankly acknowledged the perceived daylight between the
Spanish presidency and MFA on Cuba policy, and indicated that
FM Moratinos appeared to be applying his pro-active Middle
East diplomatic experience to the Cuban scenario. Leon
admitted Spain’s current relationship with Cuba was
"difficult" in part because the GOS had had ties to former FM
Perez-Roque and also because the GOC interpreted Spain’s
Historic Memory Law (by which hundreds of thousands of
descendants of exiled Spanish citizens are expected to claim
Spanish nationality) as a stroke of the pen directed at Cuba.

4. (C) The two discussed how to bring about democratic
reform in Cuba, with Leon specifying he was the highest-level
Spanish official to have met with the most important
dissidents. Referring to Cuba’s economy and comparing the
present crisis to Eastern Europe prior to the fall of the
Berlin Wall, Leon speculated that offers of economic
engagement on agricultural and energy issues of great
interest of the Cuban regime might lead Cuba to accept
certain conditions.

5. (C) Valenzuela explained that while U.S. policy toward
Cuba was governed by law, President Obama’s intention was to
press forward in engaging the GOC on issues of mutual
interest and concern. He cited the coordinated response to
the January 12 earthquake in Haiti as an opportunity to
cooperate with Cuba. The USG has offered to provide medical
supplies to 400 Cuban doctors currently providing care in
Haiti. Even so, USG support for human rights in Cuba was
paramount in our approach and policy.

//HAITI//

6. (C) Both agreed on the importance of following up the
Montreal meeting and the need to triangulate assistance.

MADRID 00000187 002 OF 003

Leon raised the possibility of funneling half of all
reconstruction aid through the Inter-American Development
Bank (IADB), rather than via the World Bank. Valenzuela
stressed the need for long-term coordination of financial
contributions beyond the initial emergency and stabilization
phases. Leon argued the IADB had a greater stake in Haiti
and more regional experience and would be in a better
position to manage the donors’ trust fund in the event the
World Bank is called to respond to a respond to a future
disaster elsewhere in the world. Leon observed that offering
the IADB a leading role would not prevent the WB from making
a contribution, and held that WB President Bob Zoellick would
understand the need to include Latin America. Valenzuela
seconded the argument for regional control and urged that the
United Nations not leave Latin America out of the assistance
and peacekeeping equation. Involving the IADB would help
increase Latin buy-in. Leon said he was "completely in
agreement" with Valenzuela about holding future aid
coordination meetings in New York without putting all eggs in
the UN basket.

//HONDURAS//

7. (C) Leon predicted normalization of Honduras’s relations
with the international community was on the horizon, and
agreed with Valenzuela that the situation was improving,
saying things were on the right track. He described the
challenge of getting Honduras closer to more stable states in
the region in order to shore up its fragile institutions.
Leon shared Valenzuela,s frustration and concern over
Brazil’s incomprehensible position. Valenzuela urged strong
Spanish and EU support for President Lobo’s new government,
noting that the election itself was not a sufficient
solution, but part of a collaborative process to ensure a
healthy Honduras. Lobo’s agenda, while not easy, included
worthy goals to combat poverty and Honduras’s other problems.

//NICARAGUA//

8. (C) Leon stressed the need to strengthen political
institutions in the lead up to elections, calling Nicaragua
an opportunity for U.S.-Spanish-Brazilian cooperation,
especially during the last months of President Lula’s term.
He noted former President Aleman was "frustrated" with
President Daniel Ortega and speculated about the political
prospects for Eduardo Montealegre as a result. Everyone
agreed Ortega was erratic and unpredictable and Leon noted
Ortega was the only president in the region (other than
Castro) with whom President Zapatero had refused to meet, had
not and would not receive.

//VENEZUELA//

9. (C) Leon observed the situation in Venezuela was getting
more and more complicated. He suggested the international
community should worry less about Chavez and focus more on
supporting the democratic opposition. He expressed hope for
the "real possibility" that a majority of Venezuelan public
opinion would turn against Chavez. He also shared his view
that Chavez would do something to further harm his own cause
if he perceived he would lose upcoming elections. Valenzuela
said chavismo was more a symptom than the cause of fragility
of institutions. He expressed frustration that the
opposition had not necessarily been constructive. Valenzuela
stressed the importance of discussing Venezuela with other
countries, urging a more pro-active approach on the part of
all countries that would be more constructive than
confronting Chavez or "playing his game." Leon observed
recent elections had gone better but shared U.S. concerns
about Venezuela’s growing ties with Iran (admitting the EU
should have done more to intercede) and about restrictions on
Venezuelan broadcasters. Leon indicated that EU ambassadors
had plans to meet with Chavez to make it clear that the
closures were unacceptable and unconstitutional. He said it
was harder to talk to Chavez now than previously.

//BOLIVIA//

10. (C) Elsewhere in the Andean region, despite the
similarities in political situations and problems, the
reasons for each country’s difficulties were very different,
making it impossible to put all the countries "in one basket"
or to equate Chavez with Morales, for example. On Bolivia,
Valenzuela said Spain was in a position to promote
cooperation on counter-narcotics and in other areas where the

MADRID 00000187 003 OF 003

United States had been shut out. Leon noted the
"unimaginable" political success of President Morales left no
alternative but to focus on the most important themes. He
acknowledged the GOS had seen Bolivia respond well in
specific areas, including intelligence sharing, hydrocarbons,
and protections for foreign oil and gas companies against
exploitation. Valenzuela underscored the need to
"multi-lateralize" cooperation and coordination on combating
narco-trafficking to include Brazil and Europe, which were
more directly affected by the Bolivian drug trade than the
United States, where demand had remained stable or declined.

11. (C) Leon assured Valenzuela that the United States would
have Spain,s support, especially during its EU presidency,
saying Spain knew who to talk to in Bolivia and noting that
Morales respected President Zapatero, with whom he had gone
jogging in Central Park in September 2009. Leon suggested
that Valenzuela touch base with Spain,s Ministry of
Interior, which had the most historical contact with Bolivian
interlocutors based on bilateral cooperation to fight the
Basque terrorist organization ETA. Leon held that Morales
was both more sophisticated than Chavez, had enough support
to keep governing, and would not allow himself to be
manipulated by anyone.

12. (U) Assistant Secretary Valenzuela cleared this message.
CHACON