VZCZCXRO4588
PP RUEHAG RUEHROV
DE RUEHMD #0029/01 0121130
ZNY SSSSS ZZH
P 121130Z JAN 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 0049
RUEHUNV/USMISSION UNVIE VIENNA PRIORITY 0103
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUCNNSG/NUCLEAR SUPPLIERS GROUP COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0722
RUEHBS/AMEMBASSY BRUSSELS PRIORITY 5339
RUEHMO/AMEMBASSY MOSCOW PRIORITY 0927
RUEHFR/AMEMBASSY PARIS PRIORITY 1523
RUEHRO/AMEMBASSY ROME PRIORITY 2426
RUEHLA/AMCONSUL BARCELONA PRIORITY 3741

S E C R E T SECTION 01 OF 02 MADRID 000029

SIPDIS

PASS TO ROBIN DELABARRE OF ISN/NESS, ELAINE SAMSON AND
STACIE ZERDECKI OF EUR/WE

E.O. 12958: DECL: 01/12/2019
TAGS: KNNP MNUC PARM SP TRGY ENRG ETTC FR
SUBJECT: SPAIN: MFA EXPLAINS ITS STANCE ON DRAFT PARAGRAPH
7 OF CRITERIA-BASED NSG PROPOSAL

REF: A. 08 MADRID 1362
¶B. 12/12/08 (U) EMAIL FROM POLOFF CLIFTON TO USUNVIE
¶C. 08 MADRID 1296
¶D. 08 SECSTATE 126581
¶E. 08 MADRID 1262

MADRID 00000029 001.2 OF 002


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

¶1. (C) POLOFF met on January 8 with Carlos Torres, Counselor
for Nuclear Non-Proliferation and Disarmament in the MFA,s
DG for Strategic Affairs & Terrorism. Torres raised the
issue of Spain's ongoing reservations about revisions to the
Nuclear Supplier Group's (NSG's) Guidelines for Transfers of
Enrichment & Reprocessing Equipment and Technology, as
discussed in REFTELS B, C, D and E. While Torres said that
the GOS believes that Spanish concerns about proposed
revisions to Paragraph 6 would be resolved with the inclusion
of a sentiment as proposed by the GOS in REFTEL B, he opined
that Madrid is still "far from reaching an agreement" on the
current version of the revised Paragraph 7. He also remarked
that he understood Moscow and Beijing were agreeable to the
current draft that Madrid opposes.

¶2. (C) Torres likened the existing revision of Paragraph 7 to
the Nuclear Non-Proliferation Treaty, which would divide
countries into a before and after of have's and have-not's,
with those who could enrich uranium and those who could not.
He asserted that for Spain -- which he described as having a
vibrant, longstanding civil nuclear industry -- the issue is
not a theoretical one but is a practical matter with very
serious implications for the future of Spain's nuclear
electricity industry. Torres opined that the acceptance of a
Paragraph 7 similar to the revision that has been drafted
would mark the "death" of Spanish participation in this
industry.

¶3. (C) To illustrate his concern, Torres described the
predicament of Spanish participation in the European Gaseous
Diffusion Uranium Enrichment Consortium (known as EURODIF),
in which ENUSA, a state-owned Spanish company, has an 11
percent stake. (COMMENT: France has a direct 44 percent
stake and also owns a 60 percent stake in a joint venture
with Iran, named SOFIDIF, that has a further 25 percent share
in EURODIF. Belgium, with 11 percent, and Italy, with 8
percent, are the other shareholders. END COMMENT) EURODIF's
uranium enrichment plant in Tricastin, France - known as
Georges Besse - opened in the 1970s and is expected to be
phased out of operation by 2013 because it uses older
technology and is not competitive in the market place. It is
scheduled to be dismantled by 2020. A more efficient
successor plant, named Georges Besse II, which uses gas
centrifuge technology, is being constructed at a cost of $4.7
billion. It is expected to gradually come online, beginning
in 2009, and to reach full production capacity by around
¶2016. However, France is seeking too high of a price for
EURODIF members to be partners in the new plant, according to
Torres, who suggested that France does not appreciate the
role Spain has played in EURODIF since its creation in 1973.
Consequently, France's asking price may force ENUSA to exit
EURODIF and seek membership in another nuclear consortium.
Torres explained that Spain wants the freedom to do business
with whomever it wants in this industry, which he described
as "strategically very important" to the GOS. However, he
claimed that the current revisions to Paragraph 7 would block
Madrid from doing so.

¶4. (S) Returning to political rather than commercial issues,
Torres emphasized that the GOS is not looking to create a
confrontation but is interested in discussing the issue with
its allies, which Madrid already is doing with Paris. Madrid
wants Paragraph 7 to be revised in a way that would enable
Spain to participate in nuclear consortia of its choosing and
to retain the option of being able to pursue enrichment at
some point in the future. Torres also indicated that he is
under the impression that the Spanish Mission to the UN in
Vienna does not enjoy open lines of communication with its
U.S. counterpart and perhaps does not enjoy the full
confidence of the USG. Torres will be traveling to Vienna to
be part of the Spanish delegation for the January 15 meeting
to discuss revisions to Paragraph 7 and has signaled that he

MADRID 00000029 002.2 OF 002


hopes to be able to discuss Madrid's concerns with the U.S.
delegation. He also indicated that he is available to
clarify Spain's position with U.S. officials in Washington.

¶5. (C) COMMENT: Although the Zapatero administration's
long-stated policy is to phase out nuclear energy plants in
Spain at the end of their useful lives (see REFTEL A), the
concerns described by Torres may be part of a behind the
scenes effort to keep Spain's future energy options open. We
have no information to suggest that there is any coordination
between this effort and the political decision of whether to
phase out the plants, or that this implies that political
sentiment is swinging against the phaseout. END COMMENT.
AGUIRRE