SPANISH DEFENSE MINISTER TELEPHONES CHARGE ON VENEZUELA SALE

CONFIDENTIAL C O N F I D E N T I A L MADRID 000703 SIPDIS FOR EUR/WE E.O. 12958: DECL: 02/24/2015 TAGS: PGOV, PREL, MOPS, PTER, SP SUBJECT: SPANISH DEFENSE MINISTER TELEPHONES CHARGE ON VENEZUELA SALE Classified By: Charge d'Affaires J. Robert Manzanares, reasons 1.4(b) and (d). 1. (C) Minister of Defense Jose Bono telephoned Charge February 22 to explain Spain's decision to sell military and civilian ships to Venezuela. Saying he wished to follow up with Charge after Bono's appearance before Congress's defense commission a day earlier (during which the Defense Minister answered questions about the Venezuela sale and Spain's Afghanistan deployment), Bono explained that Spain would likely sell a petroleum-carrying vessel, a ship that transports asphalt and five "patrol boats" to the Chavez government. He emphasized the Spanish government has received "assurances" from Caracas that the patrol ships will not be used for offensive purposes, but would be used to protect Venezuela's maritime borders and Exclusive Economic Zone. (Note: Other sources have told us the ships are actually corvettes capable of being armed with naval guns and missiles. A press report indicated the vessels would be similar to Spain's "Descubierta" class corevettes with a displacement of 1,500-1,800 tons. End note.) The principal reason Spain was making the sale to Venezuela -- reportedly worth over 600 million euros (USD 780 million) -- was to give a shot in the arm to ailing state-owned ship building firm Izar. The sale would be "very significant for Izar," said Bono, but would not tip the military balance in the region. He also told Charge that the Zapatero government had conferred with the Uribe government and the Colombians "did not see major problems" with the sale. 2. (C) Comment: Bono likewise telephoned Charge from Caracas when he made his unannounced "discreet" trip there in late January to assure us he was not doing anything untoward. His latest call is another indication that the GOS and Bono in particular well understand U.S. concerns about Spain's developing relations with the Chavez government. Despite that, Izar's economic woes are front and center, driving Spain's intense interest in selling ships to Venezuela. U.S. concerns aside, Spain will likely move forward to take advantage of an opportunity to tamp down labor unrest at the state-owned company. MANZANARES