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Spain Elects New Prime Minister

Aired March 15, 2004 - 23:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEO CLIP)
JOSE LUIS ZAPATERO, SPANISH PRIME MIN.-ELECT (through translator): One cannot bomb a place by chance. One cannot lead a war with lies. One cannot accept that.

JONATHAN MANN, CNN HOST (voice-over): Who really won the Spanish election? The Socialist Party, the Cause of Peace or al Qaeda?

(END VIDEO CLIP)

Hello and welcome.

Across Europe Monday there was a moment of silence to honor the victims of the Madrid train massacre, but when it was over there was another reason to be speechless. The Spanish election and the startling victory by the Socialist Party.

It was clear that voters were punishing the government of Prime Minister Jose Maria Aznar. It was less clear who voters were rewarding. If al Qaeda carried out the train attack on Thursday to weaken Spain's alliance with America, did it succeed?

On our program today, the stakes in Spain.

Senior international correspondent Sheila MacVicar reports.

(BEGIN VIDEOTAPE)

SHEILA MACVICAR, CNN SR. INTL. CORRESPONDENT (voice-over): Fresh from a startling victory, a stunning announcement. The Spanish troops in Iraq would return home, the prime minister-elect told a radio audience.

"Mr. Bush and Mr. Blair will reflect on our decision," said Jose Luis Zapatero. "You cannot justify a war with lies. It cannot be."

There may be a lesson in the anger of Spanish voters which extends well beyond Spain.

By Saturday, even as they grieved, many voters were convinced they had been deliberately deceived by the former government's early and frequent insistence that the homegrown terror group ETA was responsible for the Madrid bombings. And as evidence accumulated pointing to Islamist retaliating for Spain's close association with the policies of President Bush and the war in Iraq, the governing Conservatives lead in the poll slipped away.

UNIDENTIFIED MALE: I think it's clear the voters recoil at the idea of the Aznar government and its party were trying to play politics with this national tragedy.

UNIDENTIFIED FEMALE: I think that things must change in Spain. We need political change.

MACVICAR: They got that change. The Spanish leader Jose Maria Aznar is not out of this picture and from Europe, George Bush and Tony Blair looking increasingly isolated without the man who so publicly stood by them on Iraq.

TONY BLAIR, BRITISH PRIME MIN.: There has always been terrorism. Spain and Britain both know its price. But now it is terrorism, terrorism waged without limit.

MACVICAR: For the first time, it seems, a terrorist attack has effected the outcome of a Democratic election, and as the new prime minister said, "Mr. Bush and Mr. Blair will reflect on Spain's decision."

Sheila MacVicar, CNN, London.

(END VIDEOTAPE)

MANN: We take a break. When we come back, a conversation about al Qaeda, Iraq, the election and the allies.

Stay with us.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There has been a link between the people arrested and al Qaeda, and there has been a link between the people arrested and countries outside of Europe. So what Interpol can do is help try to analyze the information and determine what the are the needs to determine whether or not the explosives found, the material used, the phone numbers used, the telephones used, the people who have been arrested, to see whether they have links to any kind of criminal activity whatsoever worldwide, and then to share that information with the Spanish authorities so those people can be brought to justice.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Madrid is certainly, (UNINTELLIGIBLE). We need to reappraise what we've got and look at what we've got, look at our priorities and see what else we can do. We have to keep the whole resistance down.

MANN (voice-over): All across Europe, train and subway lines, border crossings and airports wee getting special attention Monday. Under cover police officers were patrolling London's subway, for example, using new authority to stop and frisk anyone they think I acting suspiciously.

(END VIDEO CLIP)

MANN: Welcome back.

Spain's outgoing government announced Monday that as it prepares to leave office it will chair a meeting of European anti-terror agencies to coordinate the investigation into the Madrid attacks.

The European Union is also planning its own emergency meeting of justice and interior ministers on Friday.

It hardly needs saying, but all of Europe wants to punish those responsible for the Madrid attacks, but have Spanish voters inadvertently encouraged them instead?

Wolf Blitzer has this look.

(BEGIN VIDEOTAPE)

WOLF BLITZER, CNN CORRESPONDENT (voice-over): A document written by a senior al Qaeda figure last December and obtained exclusively by CNN revealed the terrorist group was clearly focused on splitting Spain from the U.S.-led coalition in Iraq.

Although it talked about Spanish troops in Iraq, the goal was clear. "If its forces remain after these blows, the victory of the Socialist Party will be almost guaranteed, and the withdrawal of Spanish forces will be on its campaign manifesto."

In another development, Moroccan authorities say they can connect one of the men arrested in Madrid with two brothers who are charged with plotting the terrorist suicide bombings in Casablanca last May that killed more than 30 people.

U.S. officials say that while these links are intriguing, they require still more investigation before there's conclusive evidence of responsibility for Thursday's terror attacks in Madrid.

On the day after the ballots were counted, President Bush made a congratulatory phone call to Spain's newly-elected Socialist prime minister Jose Luis Rodriguez Zapatero, even as he promises to withdraw Spain's 1,300 troops from Iraq.

Administration officials are trying to stress the positive.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The party leader, Mr. Zapatero Rodriguez (sic), has said his first priority would be fighting terror and that Spain will continue to fight groups that direct violence towards other countries.

BLITZER: But there's no hiding disappointment in official Washington. President Bush had a close ally in the defeated prime minister, Jose Maria Aznar, who supported the war in Iraq despite overwhelming popular opposition throughout Spain.

Shortly after Thursday's terror attacks in Madrid, and on the eve of Sunday's election, the president went on Spanish television and praised Aznar.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That the people of Spain are lucky to have Jose Maria Aznar as the president during these times.

KEN POLLAK, CNN ANALYST: Certainly this isn't good for the administration. They were looking to expand the number of countries participating, and expand the number of troops in that were Iraq. Obviously, this isn't going to help that.

BLITZER: What worries counter-terrorism officials is that al Qaeda and other associated groups might time other spectacular attacks to try to derail other governments, including Britain and Poland, which are also mentioned in the al Qaeda document.

POLLAK: I think it will send the message to many people that the terrorists did have a big impact on domestic election in a key U.S. ally.

BLITZER: And certainly not lost on U.S. official, the fact that there's an election in this country in November.

Wolf Blitzer, CNN, Washington.

(END VIDEOTAPE)

MANN: Joining us now to talk more about the impact on the coalition and its enemies is Nile Gardiner, a fellow in Anglo American security policy at the Heritage Foundation in Washington.

Thanks so much for being with us.

It would seem that al Qaeda had hoped to influence the Spanish election, if it was indeed al Qaeda that placed all of those bombs. Do you think they've succeeded?

NILE GARDINER, HERITAGE FOUNDATION: Well, I think the terrorists certainly had a direct impact at the polls. Prior to the terrorist bombings in Madrid last week, it was pretty certain that the ruling popular party would be swept back into power.

All of that changed as a result of the bombings and quite clearly al Qaeda, ETA or whoever was responsible for the bombings had a direct impact that the polls.

MANN: Would they be encouraged, as a result, to do something like this again?

GARDINER: Well, they will be extremely encouraged, and certainly if the new Spanish government does not side alongside the United States in the war on terror, if the new Spanish government decides to end the very important Spanish-American alliance, then I think certainly the terrorists would have achieved what they setout to do.

Therefore, I think it's imperative that the new Spanish leadership drops the anti-American rhetoric, which we've seen coming out over the past couple of days or so. I think it's time to move forward. It's very important, of course, for Madrid and Washington to work together in the war against terror.

MANN: What you're suggesting is that -- correct me if I'm wrong -- that in some sense it's more important to frustrate al Qaeda right now than it is for the people of Spain to simply act democratically, to punish a government for a policy that they did not support.

GARDINER: Well, we're fighting a global war against terror. Spain is part of that, a coalition fighting against terrorism. It's imperative, I believe, for the Spanish government to work together with the United States, Great Britain and its allies in the war against terror.

What we have seen recently have been some inflammatory statements coming from the new Spanish prime minister, attacking the Bush administration's policy with regard to Iraq and also, of course, attacking Tony Blair as well. So already the new administration is in a way starting to alienate both Washington and London. It simply cannot afford to do so.

MANN: Well, let me ask you why that's the case. Is unity so crucial now? Isn't it healthy to have some public debate between nations and leaders who don't agree about the policy that Washington and London have adopted?

GARDINER: There will always be international disagreements, but I believe at this time, this extremely important time in history, it's important for Europe and the United States to work closely together.

I haven't actually seen any evidence coming out of the new Spanish government-in-waiting that Spain is really keen to work very closely with Washington. I think that's a very bad start. I think already there's a lot of bad blood now between Washington and Madrid following the new prime minister's statements.

I think that's a very, very worrying development. Of course, there will be disagreements between Washington and Europe, but it's imperative the two powers work together.

MANN: Once again, let me keep asking you why. Already, Mr. Zapatero, the incoming prime minister, has said that he hopes to move Spain closer to France and Germany, which is to say further from the United States and the United Kingdom. What impact would that have on the war on terror?

GARDINER: It's a very worrying development, actually. Spain may well move closer towards the position of France and Germany with regard to Iraq. That's certainly development I think for the Bush administration.

But I believe that Europe and the United States have common interests here in terms of fighting against al Qaeda, common interests of course in disarming a rogue state, such as Iran and Syria. It's important for the two to work very closely together despite some of the differences over Iraq.

MANN: The first test may in fact be in Iraq, if indeed the new government makes good on its promise to withdraw its 1,300 troops from that country.

The symbolism of it will be very important, but in concrete, practical terms on the ground, ar the forces in Iraq really going to miss 1,300 Spaniard?

GARDINER: I think the Spanish presence in Iraq is important symbolically. I think militarily it won't make a huge amount of difference on the ground.

Already the Poles have pledged to continue to lead the stabilization force in the center of Iraq, even if the Spanish do go. I think that is not going to alter the situation on the ground. And also I don't believe it's going to encourage other European allies to pullout troops either. It will be an important symbolic gesture, but no more than that.

MANN: What should Tony Blair and George Bush do now? Should they put a brave face on this setback to their alliance? Or should they speak directly in the way that you have about their concerns?

GARDINER: I think we're going to see intense negotiations between Madrid, Washington and London in the coming weeks over Iraq. I think some sort of compromise will try to be reached. But I think it's going to be extremely difficult.

This is a radical left-wing government, fundamentally different from the previous Spanish regime. It's going to be difficult to find broad agreement on all of the issues, but hopefully we're going to find some agreement on some of the issues some of the time. That's the best that we can hope for.

MANN: Nile Gardiner, of the Heritage Foundation, thanks so much for talking with us.

GARDINER: Thank you.

MANN: We take another break. When we come back, the lessons the White House might have to learn.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MANN (voice-over): Just hours after the result, Spain's new prime minister said things are going to change because of his victory.

ZAPATERO (through translator): This will obviously change a very important power balance in Europe, and by changing this power balance in Europe, the international order will also change, because numerous countries will feel much stronger and supported, and I think that the new position of the Socialist government in Spain will reflect on the American lections in November and on the fight between Bush and Kerry.

(END VIDEO CLIP)

MANN: Welcome back.

November isn't that far off. Will the United States be effected? Our senior political analyst Bill Schneider has a look.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): One year ago Prime Minister Aznar of Spain stood squarely alongside the United States and Britain on Iraq. On Sunday, Spain through Aznar's party out and elected a Socialist government with a very different view on Iraq.

ZAPATERO (through translator): I think that Spain's participation in the war has been a total error.

SCHNEIDER: The White House had a big stake in Spain's election.

CONDOLEEZZA RICE, U.S. NATL. SECURITY ADVISOR: I believe the Spain people understand that they've had strong and good leadership in President Jose Maria Aznar and his government.

SCHNEIDER: Aznar's party had been ahead in the polls, but the terrorist attacks in Madrid on Thursday through the political situation in to turmoil.

UNIDENTIFIED MALE: You have had an election only 48 hours after the terrorist attacks. That's too early. Could you imagine an election in the United States on 9/14?

SCHNEIDER: There were two possible outcomes. The attacks might have rallied the Spanish people to support the Aznar government and the United States in a common front against terrorism.

On Friday, it looked like that might happen

UNIDENTIFIED MALE: Could you imagine 1/3 of the population of the United States getting out on the streets, complaining about terrorist attacks?

SCHNEIDER: But when evidence came out o Saturday linking the attacks to al Qaeda, the political situation suddenly reversed. Now it could be argued that Spain's participation in the Iraq war made it more vulnerable to terrorism.

Aznar's party apparently paid a price for supporting President Bush in Iraq. One reading of the result: the terrorists won.

UNIDENTIFIED MALE: Al Qaeda had a technical victory. They contributed to the overthrow of a government.

SCHNEIDER: But it also helps Democrats make their case. Either the more extreme case that Spain's voters were right.

HOWARD DEAN, FMR. U.S. PRESIDENTIAL CANDIDATE: Did the capture Saddam Hussein and the attack on Iraq make us safer. I said no during the campaign. I think it's very clear that the answer is no.

SCHNEIDER: Or the more moderate case, that President Bush has isolated the United States I the world.

JOHN KERRY, U.S. PRESIDENTIAL CANDIDATE: He pushed away our allies at a time when we needed them the most.

(END VIDEOTAPE)

MANN: We got back in touch to talk with Bill Schneider. He says that there are similarities between the campaign that's unfolding now in the United States and the one that ended so dramatically in Spain.

(BEGIN VIDEOTAPE)

SCHNEIDER (on camera): The war in Iraq is one of the central issues of the U.S. presidential campaign agenda, and if it looks like the United States really has less and less support, than that's mirroring what's happening in the United States, which is as the months go by and more and more Americans get killed in Iraq, the war is becoming more controversial, not less. It is not disappearing from the campaign agenda the way the Persian Gulf War did in his father's administration in 1992.

So if it mirrors what's happening in the United States, the war losing support, then yes, those results could have an impact here in the United States.

MANN: Have people like you or people you've talked to speculated about the impact that another terror attack on the United States would have? One of the stunning things about what happened in Spain is that the people who were victims of that attack didn't rally around their government. I fact, a majority of Spaniards went to the polls to defeat their government.

Do you thin American voters would behave in the same way?

SCHNEIDER: No, I don't. There's a simple reason for that. In the United States, almost uniquely, the president is both the head of state and the head of government. The Spanish prime minister, the British prime minister are heads of government, but Britain has a queen, Spain has a king, to represent the unity of the country. So people can rally around the symbols of the country while criticizing the government.

In the United States, Americans in any crisis, any crisis, even one that looks like a setback, will rally around the president. They did that when Jimmy Carter failed to rescue the hostages in Iran back in 1980. That policy was a failure, but Carter's ratings went up.

The same thing would happen if, God forbid, a terrorist attack where to occur in the United States. Americans would rally to the support of President Bush. But, and this is the important qualification, I don't think that rally would last very long. It would be a matter of just a few weeks before Americans started raising some very tough questions about how did this happen, is the United States more vulnerable to terrorism as a result of the war in Iraq? And what happened to the homeland security plan that was so elaborately spelled out by the Bush administration?

Those questions would come very quickly.

MANN: So bottom line, is there a bump, either plus or minus, for George Bush? Is there a bump out of this for Tony Blair?

SCHNEIDER: I don't think there's a bump out of it for either one. Both look more isolated than they did in the past. Spain has clearly cast its lot against the coalition of the willing in Iraq. Spain has now become one of the unwilling, and I think it just increases the impression in their own domestic electorates that Blair in Britain, Bush in the United States, are isolated from the rest of the world.

MANN: Our senior political analyst, Bill Schneider, thanks so much for this.

SCHNEIDER: Sure -- Jon.

(END VIDEOTAPE)

MANN: The Madrid bombings have reawakened fears that Europe's capitals and its business centers are at a greater risk than ever before. Since the terror attacks of September 2001, companies have already had to ramp up their insurance budgets to protect themselves and their employees.

CNN's Jim Boulden has a look at the rising cost in that risk.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): Counting the costs of Madrid now moves beyond the human toll. Companies around the world are expected to review their terrorism and disaster insurance, with the help of insurers like Aeon.

UNIDENTIFIED MALE: I think certainly the events of last week will reflect an upward movement in terms of the risks that you now face in Spain.

BOULDEN: Aeon provides companies with risk analysis, and where needed political and terrorism cover.

Aeon does not see Madrid forcing rates higher for insurers, companies nor for consumers.

UNIDENTIFIED MALE: I would say an immediate rush would be to increase rates right away, now. I think the market is more mature and more sophisticated two years on from 9/11, that they would have a knee-jerk reaction.

BOULDEN: But the attack on Spain's train system is forcing companies to reassess whether they are at a greater risk now.

(on camera): As governments have tightened security around high profile targets, softer targets have become more vulnerable, and that puts companies at risk in places like London, where in many cases offices are built next to or indeed on top of train stations.

(vice-over): London was bombed time and time again by the IRA in the 1990's. For the past 11 years, the British government has backed all terrorism insurance to make sure companies can get cover. Crucially, the government updated that cover after 9/11 to include biological and chemical attacks.

UNIDENTIFIED MALE: As you can see looking around London at the moment, you can see a very large number of new buildings going up. We have not been terrorized into stopping investing and I think that's a very important point.

BOULDEN: The British government-backed plan hasn't had to pay out for an attack yet and some companies are asking if the high cost of terror insurance is too much.

UNIDENTIFIED MALE: The problem for them is that after what has happened just recently, they may start to think this could be a much nastier campaign that we perhaps hoped.

BOULDEN: Insurers say companies have to review the changing threat on a monthly basis. A threat not only to their infrastructure but, as seen in Madrid, more and more to their staff.

(END VIDEOTAPE)

MANN: The human cost in Madrid really cannot be calculated. With 200 people dead and hundreds more wounded, the bombers not only robbed families of their loved ones. They also took something else. Their very basic sense of security.

CNN's Brent Sadler took a train ride in the city today and filed this report.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN CORRESPONDENT: I'm taking the same rail journey that was turned into Spain's March 11 day of terror last week. One of the bombs exploded here, at Santa (UNINTELLIGIBLE) Railway Station, just four stops from the capital.

Not all damage has been repaired here, but all trains are running and for the first time since the blast all stations into Madrid are now open.

But nerves are raw. And emotions running high among the traveling public. Many people say quite simply they are afraid.

The journey takes just 15 minutes.

(voice-over): The bombers must have blended with passengers like these, the ones they chose to kill and maim.

"Yes, I'm a little afraid," he says, "but you have to keep going."

Passing there these stations," he explains, "You can't help but look at the flowers and the candles to realize what happened here?

OAKLEY (on camera): The political fallout in Spain from the attacks along this railway line was immense, but the European security issues, if al Qaeda planned and implemented the bombings, could be even greater.

This commuter hub has returned to life, but for each and every passenger making this trip, there are string reminders with candlelit vigils of the pain and suffering that was inflicted here. T

here has been political upheaval with the prime minister-in-waiting condemning the war on Iraq last year as a big mistake.

Brent Sadler, CNN, Madrid.

(END VIDEOTAPE)

MANN: I'm Jonathan Mann. The news continues.

END

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Aired March 15, 2004 - 23:00:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
JOSE LUIS ZAPATERO, SPANISH PRIME MIN.-ELECT (through translator): One cannot bomb a place by chance. One cannot lead a war with lies. One cannot accept that.

JONATHAN MANN, CNN HOST (voice-over): Who really won the Spanish election? The Socialist Party, the Cause of Peace or al Qaeda?

(END VIDEO CLIP)

Hello and welcome.

Across Europe Monday there was a moment of silence to honor the victims of the Madrid train massacre, but when it was over there was another reason to be speechless. The Spanish election and the startling victory by the Socialist Party.

It was clear that voters were punishing the government of Prime Minister Jose Maria Aznar. It was less clear who voters were rewarding. If al Qaeda carried out the train attack on Thursday to weaken Spain's alliance with America, did it succeed?

On our program today, the stakes in Spain.

Senior international correspondent Sheila MacVicar reports.

(BEGIN VIDEOTAPE)

SHEILA MACVICAR, CNN SR. INTL. CORRESPONDENT (voice-over): Fresh from a startling victory, a stunning announcement. The Spanish troops in Iraq would return home, the prime minister-elect told a radio audience.

"Mr. Bush and Mr. Blair will reflect on our decision," said Jose Luis Zapatero. "You cannot justify a war with lies. It cannot be."

There may be a lesson in the anger of Spanish voters which extends well beyond Spain.

By Saturday, even as they grieved, many voters were convinced they had been deliberately deceived by the former government's early and frequent insistence that the homegrown terror group ETA was responsible for the Madrid bombings. And as evidence accumulated pointing to Islamist retaliating for Spain's close association with the policies of President Bush and the war in Iraq, the governing Conservatives lead in the poll slipped away.

UNIDENTIFIED MALE: I think it's clear the voters recoil at the idea of the Aznar government and its party were trying to play politics with this national tragedy.

UNIDENTIFIED FEMALE: I think that things must change in Spain. We need political change.

MACVICAR: They got that change. The Spanish leader Jose Maria Aznar is not out of this picture and from Europe, George Bush and Tony Blair looking increasingly isolated without the man who so publicly stood by them on Iraq.

TONY BLAIR, BRITISH PRIME MIN.: There has always been terrorism. Spain and Britain both know its price. But now it is terrorism, terrorism waged without limit.

MACVICAR: For the first time, it seems, a terrorist attack has effected the outcome of a Democratic election, and as the new prime minister said, "Mr. Bush and Mr. Blair will reflect on Spain's decision."

Sheila MacVicar, CNN, London.

(END VIDEOTAPE)

MANN: We take a break. When we come back, a conversation about al Qaeda, Iraq, the election and the allies.

Stay with us.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There has been a link between the people arrested and al Qaeda, and there has been a link between the people arrested and countries outside of Europe. So what Interpol can do is help try to analyze the information and determine what the are the needs to determine whether or not the explosives found, the material used, the phone numbers used, the telephones used, the people who have been arrested, to see whether they have links to any kind of criminal activity whatsoever worldwide, and then to share that information with the Spanish authorities so those people can be brought to justice.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Madrid is certainly, (UNINTELLIGIBLE). We need to reappraise what we've got and look at what we've got, look at our priorities and see what else we can do. We have to keep the whole resistance down.

MANN (voice-over): All across Europe, train and subway lines, border crossings and airports wee getting special attention Monday. Under cover police officers were patrolling London's subway, for example, using new authority to stop and frisk anyone they think I acting suspiciously.

(END VIDEO CLIP)

MANN: Welcome back.

Spain's outgoing government announced Monday that as it prepares to leave office it will chair a meeting of European anti-terror agencies to coordinate the investigation into the Madrid attacks.

The European Union is also planning its own emergency meeting of justice and interior ministers on Friday.

It hardly needs saying, but all of Europe wants to punish those responsible for the Madrid attacks, but have Spanish voters inadvertently encouraged them instead?

Wolf Blitzer has this look.

(BEGIN VIDEOTAPE)

WOLF BLITZER, CNN CORRESPONDENT (voice-over): A document written by a senior al Qaeda figure last December and obtained exclusively by CNN revealed the terrorist group was clearly focused on splitting Spain from the U.S.-led coalition in Iraq.

Although it talked about Spanish troops in Iraq, the goal was clear. "If its forces remain after these blows, the victory of the Socialist Party will be almost guaranteed, and the withdrawal of Spanish forces will be on its campaign manifesto."

In another development, Moroccan authorities say they can connect one of the men arrested in Madrid with two brothers who are charged with plotting the terrorist suicide bombings in Casablanca last May that killed more than 30 people.

U.S. officials say that while these links are intriguing, they require still more investigation before there's conclusive evidence of responsibility for Thursday's terror attacks in Madrid.

On the day after the ballots were counted, President Bush made a congratulatory phone call to Spain's newly-elected Socialist prime minister Jose Luis Rodriguez Zapatero, even as he promises to withdraw Spain's 1,300 troops from Iraq.

Administration officials are trying to stress the positive.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The party leader, Mr. Zapatero Rodriguez (sic), has said his first priority would be fighting terror and that Spain will continue to fight groups that direct violence towards other countries.

BLITZER: But there's no hiding disappointment in official Washington. President Bush had a close ally in the defeated prime minister, Jose Maria Aznar, who supported the war in Iraq despite overwhelming popular opposition throughout Spain.

Shortly after Thursday's terror attacks in Madrid, and on the eve of Sunday's election, the president went on Spanish television and praised Aznar.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That the people of Spain are lucky to have Jose Maria Aznar as the president during these times.

KEN POLLAK, CNN ANALYST: Certainly this isn't good for the administration. They were looking to expand the number of countries participating, and expand the number of troops in that were Iraq. Obviously, this isn't going to help that.

BLITZER: What worries counter-terrorism officials is that al Qaeda and other associated groups might time other spectacular attacks to try to derail other governments, including Britain and Poland, which are also mentioned in the al Qaeda document.

POLLAK: I think it will send the message to many people that the terrorists did have a big impact on domestic election in a key U.S. ally.

BLITZER: And certainly not lost on U.S. official, the fact that there's an election in this country in November.

Wolf Blitzer, CNN, Washington.

(END VIDEOTAPE)

MANN: Joining us now to talk more about the impact on the coalition and its enemies is Nile Gardiner, a fellow in Anglo American security policy at the Heritage Foundation in Washington.

Thanks so much for being with us.

It would seem that al Qaeda had hoped to influence the Spanish election, if it was indeed al Qaeda that placed all of those bombs. Do you think they've succeeded?

NILE GARDINER, HERITAGE FOUNDATION: Well, I think the terrorists certainly had a direct impact at the polls. Prior to the terrorist bombings in Madrid last week, it was pretty certain that the ruling popular party would be swept back into power.

All of that changed as a result of the bombings and quite clearly al Qaeda, ETA or whoever was responsible for the bombings had a direct impact that the polls.

MANN: Would they be encouraged, as a result, to do something like this again?

GARDINER: Well, they will be extremely encouraged, and certainly if the new Spanish government does not side alongside the United States in the war on terror, if the new Spanish government decides to end the very important Spanish-American alliance, then I think certainly the terrorists would have achieved what they setout to do.

Therefore, I think it's imperative that the new Spanish leadership drops the anti-American rhetoric, which we've seen coming out over the past couple of days or so. I think it's time to move forward. It's very important, of course, for Madrid and Washington to work together in the war against terror.

MANN: What you're suggesting is that -- correct me if I'm wrong -- that in some sense it's more important to frustrate al Qaeda right now than it is for the people of Spain to simply act democratically, to punish a government for a policy that they did not support.

GARDINER: Well, we're fighting a global war against terror. Spain is part of that, a coalition fighting against terrorism. It's imperative, I believe, for the Spanish government to work together with the United States, Great Britain and its allies in the war against terror.

What we have seen recently have been some inflammatory statements coming from the new Spanish prime minister, attacking the Bush administration's policy with regard to Iraq and also, of course, attacking Tony Blair as well. So already the new administration is in a way starting to alienate both Washington and London. It simply cannot afford to do so.

MANN: Well, let me ask you why that's the case. Is unity so crucial now? Isn't it healthy to have some public debate between nations and leaders who don't agree about the policy that Washington and London have adopted?

GARDINER: There will always be international disagreements, but I believe at this time, this extremely important time in history, it's important for Europe and the United States to work closely together.

I haven't actually seen any evidence coming out of the new Spanish government-in-waiting that Spain is really keen to work very closely with Washington. I think that's a very bad start. I think already there's a lot of bad blood now between Washington and Madrid following the new prime minister's statements.

I think that's a very, very worrying development. Of course, there will be disagreements between Washington and Europe, but it's imperative the two powers work together.

MANN: Once again, let me keep asking you why. Already, Mr. Zapatero, the incoming prime minister, has said that he hopes to move Spain closer to France and Germany, which is to say further from the United States and the United Kingdom. What impact would that have on the war on terror?

GARDINER: It's a very worrying development, actually. Spain may well move closer towards the position of France and Germany with regard to Iraq. That's certainly development I think for the Bush administration.

But I believe that Europe and the United States have common interests here in terms of fighting against al Qaeda, common interests of course in disarming a rogue state, such as Iran and Syria. It's important for the two to work very closely together despite some of the differences over Iraq.

MANN: The first test may in fact be in Iraq, if indeed the new government makes good on its promise to withdraw its 1,300 troops from that country.

The symbolism of it will be very important, but in concrete, practical terms on the ground, ar the forces in Iraq really going to miss 1,300 Spaniard?

GARDINER: I think the Spanish presence in Iraq is important symbolically. I think militarily it won't make a huge amount of difference on the ground.

Already the Poles have pledged to continue to lead the stabilization force in the center of Iraq, even if the Spanish do go. I think that is not going to alter the situation on the ground. And also I don't believe it's going to encourage other European allies to pullout troops either. It will be an important symbolic gesture, but no more than that.

MANN: What should Tony Blair and George Bush do now? Should they put a brave face on this setback to their alliance? Or should they speak directly in the way that you have about their concerns?

GARDINER: I think we're going to see intense negotiations between Madrid, Washington and London in the coming weeks over Iraq. I think some sort of compromise will try to be reached. But I think it's going to be extremely difficult.

This is a radical left-wing government, fundamentally different from the previous Spanish regime. It's going to be difficult to find broad agreement on all of the issues, but hopefully we're going to find some agreement on some of the issues some of the time. That's the best that we can hope for.

MANN: Nile Gardiner, of the Heritage Foundation, thanks so much for talking with us.

GARDINER: Thank you.

MANN: We take another break. When we come back, the lessons the White House might have to learn.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MANN (voice-over): Just hours after the result, Spain's new prime minister said things are going to change because of his victory.

ZAPATERO (through translator): This will obviously change a very important power balance in Europe, and by changing this power balance in Europe, the international order will also change, because numerous countries will feel much stronger and supported, and I think that the new position of the Socialist government in Spain will reflect on the American lections in November and on the fight between Bush and Kerry.

(END VIDEO CLIP)

MANN: Welcome back.

November isn't that far off. Will the United States be effected? Our senior political analyst Bill Schneider has a look.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): One year ago Prime Minister Aznar of Spain stood squarely alongside the United States and Britain on Iraq. On Sunday, Spain through Aznar's party out and elected a Socialist government with a very different view on Iraq.

ZAPATERO (through translator): I think that Spain's participation in the war has been a total error.

SCHNEIDER: The White House had a big stake in Spain's election.

CONDOLEEZZA RICE, U.S. NATL. SECURITY ADVISOR: I believe the Spain people understand that they've had strong and good leadership in President Jose Maria Aznar and his government.

SCHNEIDER: Aznar's party had been ahead in the polls, but the terrorist attacks in Madrid on Thursday through the political situation in to turmoil.

UNIDENTIFIED MALE: You have had an election only 48 hours after the terrorist attacks. That's too early. Could you imagine an election in the United States on 9/14?

SCHNEIDER: There were two possible outcomes. The attacks might have rallied the Spanish people to support the Aznar government and the United States in a common front against terrorism.

On Friday, it looked like that might happen

UNIDENTIFIED MALE: Could you imagine 1/3 of the population of the United States getting out on the streets, complaining about terrorist attacks?

SCHNEIDER: But when evidence came out o Saturday linking the attacks to al Qaeda, the political situation suddenly reversed. Now it could be argued that Spain's participation in the Iraq war made it more vulnerable to terrorism.

Aznar's party apparently paid a price for supporting President Bush in Iraq. One reading of the result: the terrorists won.

UNIDENTIFIED MALE: Al Qaeda had a technical victory. They contributed to the overthrow of a government.

SCHNEIDER: But it also helps Democrats make their case. Either the more extreme case that Spain's voters were right.

HOWARD DEAN, FMR. U.S. PRESIDENTIAL CANDIDATE: Did the capture Saddam Hussein and the attack on Iraq make us safer. I said no during the campaign. I think it's very clear that the answer is no.

SCHNEIDER: Or the more moderate case, that President Bush has isolated the United States I the world.

JOHN KERRY, U.S. PRESIDENTIAL CANDIDATE: He pushed away our allies at a time when we needed them the most.

(END VIDEOTAPE)

MANN: We got back in touch to talk with Bill Schneider. He says that there are similarities between the campaign that's unfolding now in the United States and the one that ended so dramatically in Spain.

(BEGIN VIDEOTAPE)

SCHNEIDER (on camera): The war in Iraq is one of the central issues of the U.S. presidential campaign agenda, and if it looks like the United States really has less and less support, than that's mirroring what's happening in the United States, which is as the months go by and more and more Americans get killed in Iraq, the war is becoming more controversial, not less. It is not disappearing from the campaign agenda the way the Persian Gulf War did in his father's administration in 1992.

So if it mirrors what's happening in the United States, the war losing support, then yes, those results could have an impact here in the United States.

MANN: Have people like you or people you've talked to speculated about the impact that another terror attack on the United States would have? One of the stunning things about what happened in Spain is that the people who were victims of that attack didn't rally around their government. I fact, a majority of Spaniards went to the polls to defeat their government.

Do you thin American voters would behave in the same way?

SCHNEIDER: No, I don't. There's a simple reason for that. In the United States, almost uniquely, the president is both the head of state and the head of government. The Spanish prime minister, the British prime minister are heads of government, but Britain has a queen, Spain has a king, to represent the unity of the country. So people can rally around the symbols of the country while criticizing the government.

In the United States, Americans in any crisis, any crisis, even one that looks like a setback, will rally around the president. They did that when Jimmy Carter failed to rescue the hostages in Iran back in 1980. That policy was a failure, but Carter's ratings went up.

The same thing would happen if, God forbid, a terrorist attack where to occur in the United States. Americans would rally to the support of President Bush. But, and this is the important qualification, I don't think that rally would last very long. It would be a matter of just a few weeks before Americans started raising some very tough questions about how did this happen, is the United States more vulnerable to terrorism as a result of the war in Iraq? And what happened to the homeland security plan that was so elaborately spelled out by the Bush administration?

Those questions would come very quickly.

MANN: So bottom line, is there a bump, either plus or minus, for George Bush? Is there a bump out of this for Tony Blair?

SCHNEIDER: I don't think there's a bump out of it for either one. Both look more isolated than they did in the past. Spain has clearly cast its lot against the coalition of the willing in Iraq. Spain has now become one of the unwilling, and I think it just increases the impression in their own domestic electorates that Blair in Britain, Bush in the United States, are isolated from the rest of the world.

MANN: Our senior political analyst, Bill Schneider, thanks so much for this.

SCHNEIDER: Sure -- Jon.

(END VIDEOTAPE)

MANN: The Madrid bombings have reawakened fears that Europe's capitals and its business centers are at a greater risk than ever before. Since the terror attacks of September 2001, companies have already had to ramp up their insurance budgets to protect themselves and their employees.

CNN's Jim Boulden has a look at the rising cost in that risk.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): Counting the costs of Madrid now moves beyond the human toll. Companies around the world are expected to review their terrorism and disaster insurance, with the help of insurers like Aeon.

UNIDENTIFIED MALE: I think certainly the events of last week will reflect an upward movement in terms of the risks that you now face in Spain.

BOULDEN: Aeon provides companies with risk analysis, and where needed political and terrorism cover.

Aeon does not see Madrid forcing rates higher for insurers, companies nor for consumers.

UNIDENTIFIED MALE: I would say an immediate rush would be to increase rates right away, now. I think the market is more mature and more sophisticated two years on from 9/11, that they would have a knee-jerk reaction.

BOULDEN: But the attack on Spain's train system is forcing companies to reassess whether they are at a greater risk now.

(on camera): As governments have tightened security around high profile targets, softer targets have become more vulnerable, and that puts companies at risk in places like London, where in many cases offices are built next to or indeed on top of train stations.

(vice-over): London was bombed time and time again by the IRA in the 1990's. For the past 11 years, the British government has backed all terrorism insurance to make sure companies can get cover. Crucially, the government updated that cover after 9/11 to include biological and chemical attacks.

UNIDENTIFIED MALE: As you can see looking around London at the moment, you can see a very large number of new buildings going up. We have not been terrorized into stopping investing and I think that's a very important point.

BOULDEN: The British government-backed plan hasn't had to pay out for an attack yet and some companies are asking if the high cost of terror insurance is too much.

UNIDENTIFIED MALE: The problem for them is that after what has happened just recently, they may start to think this could be a much nastier campaign that we perhaps hoped.

BOULDEN: Insurers say companies have to review the changing threat on a monthly basis. A threat not only to their infrastructure but, as seen in Madrid, more and more to their staff.

(END VIDEOTAPE)

MANN: The human cost in Madrid really cannot be calculated. With 200 people dead and hundreds more wounded, the bombers not only robbed families of their loved ones. They also took something else. Their very basic sense of security.

CNN's Brent Sadler took a train ride in the city today and filed this report.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN CORRESPONDENT: I'm taking the same rail journey that was turned into Spain's March 11 day of terror last week. One of the bombs exploded here, at Santa (UNINTELLIGIBLE) Railway Station, just four stops from the capital.

Not all damage has been repaired here, but all trains are running and for the first time since the blast all stations into Madrid are now open.

But nerves are raw. And emotions running high among the traveling public. Many people say quite simply they are afraid.

The journey takes just 15 minutes.

(voice-over): The bombers must have blended with passengers like these, the ones they chose to kill and maim.

"Yes, I'm a little afraid," he says, "but you have to keep going."

Passing there these stations," he explains, "You can't help but look at the flowers and the candles to realize what happened here?

OAKLEY (on camera): The political fallout in Spain from the attacks along this railway line was immense, but the European security issues, if al Qaeda planned and implemented the bombings, could be even greater.

This commuter hub has returned to life, but for each and every passenger making this trip, there are string reminders with candlelit vigils of the pain and suffering that was inflicted here. T

here has been political upheaval with the prime minister-in-waiting condemning the war on Iraq last year as a big mistake.

Brent Sadler, CNN, Madrid.

(END VIDEOTAPE)

MANN: I'm Jonathan Mann. The news continues.

END

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