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2nd UPDATE: Spain PM:Stable Honduras Helpful For EU Trade Deal



(Adds comment from Mexican President.)

ESTORIL, Portugal -(Dow Jones)- Spanish Prime Minister Jose Luis Rodriguez Zapatero Monday said democratic stability in Honduras would help to conclude talks for a trade deal between Central America and the European Union.

Later, Spain's Foreign Minister Miguel Angel Moratinos said his country doesn't recognize elections held Sunday in Honduras.

"The Spanish government doesn't recognize the elections, but it doesn't ignore them either," Moratinos said at a press conference during the Iberoamerican summit that started here Sunday and ends Tuesday.

During a breakfast in Estoril with presidents from Central America, Zapatero stressed all involved parties need to reach an agreement to reinstate democratic order.

"The institutional breakdown now has other protagonists," Zapatero said during the meeting, according to a spokeswoman of the Spanish prime minister's office.

Conservative Porfirio Lobo has claimed victory in Sunday's poll in Honduras, the first presidential election in the Central American nation since the ousting in June of elected President Manuel Zelaya.

The Spanish prime minister and his foreign minister both said leaders at the Estoril summit were working to come up with a joint position on the situation in Honduras.

Mexican President Felipe Calderon during his inaugural speech of the summit Monday also called for a return to the institutional order in Honduras. He said Sunday's elections took place without "traditional, institutional international observers," and therefore it couldn't be said whether the polls were free.

"Six or seven years ago, we had thought democracy had arrived to our peoples," Calderon said. "But contrary to what was thought then, democracy didn't come to stay."

Spain's Moratinos also said Spain has been in contact with Sweden, which is trying to reach a common European position in the Honduran question. Sweden currently holds the EU presidency.

Zelaya's foreign minister Patricia Rodas is in Estoril to rally support to reinstate Zelaya, and was present at the breakfast with Zelaya.

The U.S. has signaled it is likely to recognize the outcome of Sunday's elections, along with Peru, Panama and Costa Rica, while Brazil and Venezuela said they won't recognize the poll.

Zapatero Monday also said he would like to use Spain's presidency of the EU in the first half of 2010 to clinch a trade deal with Central America.

The two regions are already very close on political dialogue, cooperation and trade issues, Zapatero said.

"We've never been closer to a deal," he said.

The EU and Central America in 2006 launched formal talks to reach a trade agreement between their regions.

-By Bernd Radowitz, Dow Jones Newswires; +34-618 526 915; bernd.radowitz@ dowjones.com


  (END) Dow Jones Newswires
  11-30-091235ET
  Copyright (c) 2009 Dow Jones & Company, Inc.

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