FINANCE MINISTRY ON IDA REPLENISHMENT; GOI

UNCLAS ROME 000563

SIPDIS

SENSITIVE

DEPT FOR EB/OMA

E.O. 12958: N/A
TAGS: EAID EFIN IT IDA
SUBJECT: FINANCE MINISTRY ON IDA REPLENISHMENT; GOI
ATTENDANCE AT DEVELOPMENT CONFERENCE


UNCLASSIFIED

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REF: JANUARY 17 EMAIL FROM TFERET TO EU POSTS


1. ITALIAN OFFICIALS SUPPORT AN INCREASE IN IDA LENDING AS
GRANTS RATHER THAN LOANS, BUT STILL ONLY AS MINOR SHARE OF
OVERALL LENDING. IN A FEBRUARY 4 MEETING WITH FINMIN
OFFICIALS, ECOUN AND ECONOFF PRESENTED PRESIDENT BUSH'S
PROPOSAL THAT THE WORLD BANK AND OTHER DEVELOPMENT BANKS
DRAMATICALLY INCREASE THE SHARE OF FUNDING PROVIDED TO THE
WORLD'S POOREST COUNTRIES AS GRANTS RATHER THAN LOANS.


2. RAFFAELA DI MARO AND GIORGIO LECCESI, OFFICER DIRECTOR
FOR BILATERAL ASSISTANCE AND OFFICE DIRECTOR FOR MDBS,
RESPECTIVELY, AT THE FINANCE MINISTRY TOLD ECOUN AND ECONOFF
THAT ITALY CONCURS WITH THE US THAT GRANTS ARE USEFUL
MECHANISMS AND THAT THEIR SHARE OF OVERALL DEVELOPMENT
ASSISTANCE FUNDING SHOULD BE INCREASED. ITALY DOES NOT,
HOWEVER, SUPPORT A GRANT INCREASE GREATER THAN TEN PERCENT OF
OVERALL IDA FUNDING. FOR REPLENISHMENT OF THE AFRICAN
DEVELOPMENT BANK, ITALY SUPPORTS A GRANT CEILING OF 7.5
PERCENT. ITALY WOULD SUPPORT THE USE OF GRANTS FOR EDUCATION,
HEALTH AND NUTRITION PROGRAMS. DI MARO UNDERSCORED ITALIAN
CONCERN ABOUT THE COST TO DONORS, IN TERMS OF FOREGONE IDA
REPAYMENTS, IF THE GRANT PORTION WERE INCREASED DRAMATICALLY.


3. WE ALSO DISCUSSED THE UPCOMING MONTEREY CONFERENCE ON
INTERNATIONAL FINANCING OF DEVELOPMENT, PAKISTAN AND ZIMBABWE
(THE LATTER TWO TO BE REPORTED SEPTEL). DI MARO POSTULATED
THAT PM BERLUSCONI, IN HIS DUAL CAPACITY AS FOREIGN MINISTER,
WOULD GO TO THE MONTERREY CONFERENCE. WE REPLIED THAT NO
DECISION HAS YET BEEN MADE ABOUT US PARTICIPANTS.
SEMBLER
UNCLASSIFIED

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UNCLASSIFIED

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2002ROME00563 - Classification: UNCLASSIFIED