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C O N F I D E N T I A L SECTION 01 OF 02 LISBON 000514

NOFORN
SIPDIS

FOR DEPUTY ASSISTANT SECRETARY BOYER FROM CDA DAVID BALLARD

E.O. 12958: DECL: 09/24/2019
TAGS: OTRA PREL PGOV ECON MARR PO
SUBJECT: SCENESETTER FOR YOUR OCTOBER 6-7 VISIT TO PORTUGAL

Classified By: CDA David Ballard, reasons 1.4 (b) and (d)

¶1. (SBU) Your visit to Lisbon comes on the heels of the most
closely contested parliamentary election in many years. With
the September 27 parliamentary elections just days away, the
Socialists led by Prime Minister Jose Socrates have a
ten-point lead over the Social Democrats led by former
Finance Minister Manuela Ferreira Leite. However, a
significant portion of the electorate -- approximately 24
percent of those intending to vote -- remains undecided and
could sway the final result. Both leading parties support
our bilateral relationship, and we expect Portugal to remain
a close EU and NATO partner.

PORTUGAL - STEADFAST ALLY
-------------------------

¶2. (SBU) Portugal, a founding member of NATO, is a steadfast
ally that has consistently stood by our side over the years
despite changes in government. President Cavaco Silva and
Prime Minister Socrates (at this date) -- from opposing
political parties -- both regularly stress that the
transatlantic relationship is a pillar of Portuguese foreign
policy and that NATO is the primary guarantor of European
security. Portugal is also a member of the Proliferation
Security Initiative, the Container Security
Initiative/Megaports, and the Global Initiative to Combat
Nuclear Terrorism.

¶3. (C) Portugal has taken a leading role supporting U.S.
efforts to close the detention center at Guantanamo. Foreign
Ministry Luis Amado was the first to publicly call on the EU
to help resettle detainees, and on August 28 Portugal
received two detainees for resettlement. The GOP has
indicated some willingness to accept a third detainee but the
issue is still being reviewed.

INTERNATIONAL MILITARY ENGAGEMENT
---------------------------------

¶4. (SBU) The Portuguese government provides liberal access to
Portuguese air and seaports for U.S. military operations in
support of our efforts in Iraq and Afghanistan. This year
2,557 U.S. military aircraft have flown over
Portuguese-controlled airspace and 1,103 have transited
through Lajes Air Base in the Azores.

¶5. (SBU) The Portuguese military is engaged internationally
on numerous fronts. Portugal participates in NATO's efforts
in Kosovo (296) and Afghanistan (143 in place, with a
commitment to double its contingent), as well as the UN
mission in Lebanon (147). Portugal participates in the EUFOR
mission in Bosnia (14), provides 87 personnel to support
bilateral cooperation in five Lusophone African nations and
Congo (EUSEC), and has 164 military and national guard
personnel policing in Timor Leste.

INTERNAL POLITICS - GOVERNING FROM THE CENTER
---------------------------------------------

¶6. (SBU) Portugal's charismatic Prime Minister Jose Socrates
heads Portugal's moderate Socialist government, which assumed
power in March 2005. The Socialists won an absolute majority
in parliament for the first time in the party's history,
which has allowed Socrates to govern from the center without
coalitions and helped him implement an economic reform
agenda. By the end of 2007 the government had succeeded in
reducing the budget deficit below the EU-mandated limit of
three percent, a year ahead of schedule. Since the onset of
the global financial crisis, however, the budget deficit and
unemployment rate have again increased and are projected at 6
percent and over 10 percent respectively by yearend.

¶7. (SBU) Portugal has national parliamentary elections and
local elections for municipal officials, on September 27 and
October 11, respectively. Despite the economic situation and
an ongoing corruption investigation, the Socialists are
leading in the polls by a three-point margin over the
center-right Social Democratic opposition led by former
Finance and Education Minister Manuela Ferreira Leite.
Possible post-electoral scenarios include a Social Democrat
or Socialist minority government or a coalition government
comprised of one of the major parties and one or two of the
smaller parties. The new government, regardless of the party
in power, will likely face difficulties in passing measures
through parliament, which may force negotiations on the left
and right. However, GOP cooperation with the U.S. and
support for the EU and NATO will likely continue unchanged.

MULTILATERALIST TO THE CORE

LISBON 00000514 002 OF 002


---------------------------

¶8. (SBU) Portugal places great emphasis on multilateral
institutions, the European Union foremost among them.
Portugal joined the EU in 1986, and a subsequent infusion of
EU funds made possible the construction of Portugal's
national transportation infrastructure. Portugal remains a
net recipient of EU funds, and a large majority of the public
views the EU favorably. In fact, Social Democrat Manuel
Durao Barroso abandoned his prime ministership halfway
through his term in 2004 in order to assume the presidency of
the European Commission (EC). On September 16 Barroso was
re-elected president of the EC. On most important foreign
policy issues, Portugal defers to EU consensus. There are
some exceptions, such as issues concerning lusophone Africa,
on which Portugal seeks a leadership role.

FOREIGN MINISTER AMADO
----------------------

¶9. (C) Foreign Minister Luis Amado has been a great friend of
the U.S., both in his previous capacity as Minister of
Defense and now as Foreign Minister. He is even-tempered,
thoughtful, and low-key, and regularly seeks opportunities to
coordinate policy with the U.S. He places great importance
on presenting a united public front, whether within the EU,
NATO or with the U.S. If there are differences, he prefers
to discuss them discreetly. He met with Secretary Clinton in
Washington on June 5. He is likely to step down after the
September elections.

PRIME MINISTER SOCRATES
-----------------------

¶10. (C) PM Jose Socrates is a charismatic leader who worked
hard to improve his English in advance of Portugal's 2007 EU
presidency. He relies on advice from a small circle of
advisors and is a moderate Socialist who has been successful
at co-opting or marginalizing the extremists in his party.
He also aggressively pursued his domestic agenda before
assuming the EU presidency, achieving difficult labor,
educational, and social security reforms. Socrates spends
most of his time on the domestic agenda, leaving foreign
policy largely in the hands of FM Amado. Economic diplomacy
has been a cornerstone of Socrates' foreign policy and this
government has strengthened ties with Angola, Libya,
Venezuela, Russia, and China to expand Portugal's energy
sources and export markets.

PRESIDENT CAVACO SILVA
----------------------

¶11. (C) Anibal Cavaco Silva is the most popular politician in
Portugal, although in recent weeks a front-page wiretapping
scandal and his refusal to clarify the issue have threatened
his popularity. The Portuguese presidency does not wield the
executive power of the U.S. presidency, but the position is
not ceremonial. Cavaco Silva is commander in chief of the
armed forces and must approve military deployments. He also
chairs the Council of State, which handles all constitutional
issues. Cavaco Silva hails from the right-of-center Social
Democratic party and he often butts heads with Socialist PM
Socrates. But Cavaco Silva generally strives to be a
non-partisan Head of State, and leaves day-to-day politicking
to his party leaders in parliament.


For more reporting from Embassy Lisbon and information about Portugal,
please see our Intelink site:

http://www.intelink.sgov.gov/wiki/portal:port ugal
BALLARD