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DATE=9/18/1999 TYPE=CORRESPONDENT REPORT TITLE=CHILE / SPAIN (L ONLY) NUMBER=2-254056 BYLINE=JONATHAN FRANKLIN DATELINE=SANTIAGO CONTENT= VOICED AT: INTRO: Relations between Chile and Spain worsened even more this week after Spanish authorities rejected a Chilean proposal to let an arbitration panel decide the fate of former Chilean dictator Augusto Pinochet. Mr. Pinochet, the former military ruler of Chile, has been under arrest in London since last October, when Spain sought his extradition from Britain to put him on trail for human rights abuses committed during the years the military ruled Chile(1973-1990). From Santiago, Jonathan Franklin reports. Text: Chilean Foreign Minister Juan Gabriel Valdes called the Spanish officials involved in the Pinochet case "arrogant and pathetic" for refusing to agree to arbitration. The Chilean government has temporarily recalled (on Friday) its ambassador to Spain as a sign of its displeasure over the Spanish decision. The Chilean senate also took steps to show its displeasure. On Friday, it pushed forward new laws that would limit foreign control of the banking and electricity sectors, two areas where Spanish firms play a key role. Analysts say that, given the widespread indignation in Chile against Spain, the measures will attract a broad base of support and most likely force the Spanish companies to divest themselves of their electrical and banking interests in the country. Until several days ago, the Chileans hoped they would be able, by means of arbitration, to keep the Pinochet case out of European courtrooms. Though it is not clear which country first proposed arbitration, there were signs that both would agree to it, but these signs evaporated when Spanish socialists learned of the plan. Their protests are believed responsible for the Spanish rejection of arbitration. The poor relations between the countries could become even worse should the ailing General Pinochet die in either England or Spain. Right-wing paramilitary groups are threatening to kill leftist politicians should Pinochet die in custody. (Signed) NEB/JF/KL 18-Sep-1999 17:27 PM LOC (18-Sep-1999 2127 UTC) NNNN Source: Voice of America .





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