ARGENTINA: ITALY'S APPROACH RESEMBLES OURS

C O N F I D E N T I A L ROME 000713 SIPDIS E.O. 12958: DECL: 02/12/2007 TAGS: PREL EFIN AR IT UN SUBJECT: ARGENTINA: ITALY'S APPROACH RESEMBLES OURS CONFIDENTIAL PAGE 02 ROME 00713 121722Z REF: STATE 21899 CLASSIFIED BY: POL M C THOMAS COUNTRYMAN FOR REASON 1.5 (B) ¶1. THIS IS AN ACTION CABLE. SEE PARA 9. ¶2. (C) SUMMARY: ON FEB 11, EMBOFFS CALLED ON COUNSELOR GIORGIO DI PIETROGIACOMO, MFA'S OFFICE DIRECTOR FOR SOUTH AMERICA, TO EXCHANGE INFORMATION ON DISCUSSIONS WITH ARGENTINE FOREIGN MINISTER RUCKAUF IN BOTH WASHINGTON AND ROME. ITALY HAS SIGNIFICANT INTERESTS IN ARGENTINA BUT IS NOT PREPARED TO PROVIDE BILATERAL ASSISTANCE UNTIL THE GOA SATISFIES IMF CRITERIA. MEANWHILE, THE GOI IS PROVIDING AID TO ITALIANS LIVING IN ARGENTINA, SHORING UP SECURITY AT ITS MISSION, AND NOMINATING A PROMINENT FINANCE OFFICIAL TO AN INTERNATIONAL "FRIENDS OF ARGENTINA" COMMITTEE. END SUMMARY. ¶3. (U) ITALY'S INTEREST IN ARGENTINA STEMS FROM THE FACT THAT ABOUT ONE-THIRD OF ARGENTINA'S CITIZENS ARE OF ITALIAN ORIGIN, PIETROGIACOMO SAID. ITALIAN PASSPORT HOLDERS NUMBERED 610,000, WHILE THOSE WITH THE RIGHT TO ACQUIRE ITALIAN CITIZENSHIP WERE ESTIMATED AT 10-15 MILLION. ITALY MAINTAINS AN EMBASSY AND NINE CONSULATES IN ARGENTINA. IN A MEETING BETWEEN RUCKAUF AND THE HEAD OF ITALY'S CONFERENCE OF REGIONAL PRESIDENTS (WHO ARE ROUGHLY EQUIVALENT TO U.S. GOVERNORS),BOTH SIDES AGREED THAT THEY SHOULD SEEK TO IMPROVE THE LOT OF ITALIANS (AND ARGENTINES) IN ARGENTINA, NOT FACILITATE IMMIGRATION. ¶4. (C) BECAUSE ITALY IS SIGNIFICANTLY EXPOSED IN ARGENTINA, THE GOI IS CONCERNED THAT ALL INTERNATIONAL CONFIDENTIAL PAGE 03 ROME 00713 121722Z INVESTMENTS BE TREATED EQUITABLY AND IN A TRANSPARENT MANNER. SACE, EQUIVALENT TO THE U.S. EXPORT-IMPORT BANK, HAS 675M USD IN EXPOSURE. OF THIS, 103M OF PAYMENTS COMING DUE IN NEXT FEW MONTHS. SACE VOTED ON FEB 4 TO RESCHEDULE THESE PAYMENTS. IN RESPONSE TO THE GOI'S QUERY ABOUT THE NEW GOVERNMENT RULES ON BANKRUPTCY, RUCKAUF RESPONDED THAT THEY INTENDED TO REVISE THEM. IN OUR FEB 8 CONVERSATION, PIETROGIACOMO REPORTED HAVING RECEIVED INFORMATION THAT THEY WERE DOING SO. ¶5. (C) PIETROGIACOMO SAID THAT THE GOI HAD OFFERED ARGENTINA ITALY'S SUPPORT. AT PRESENT, HOWEVER, THE GOI AGREED WITH THE IMF'S TOUGH LINE THAT ARGENTINA'S CURRENT ECONOMIC PLAN IS INSUFFICIENT TO JUSTIFY EITHER BILATERAL OR MULTILATERAL ASSISTANCE. ONCE ARGENTINA HAS AN AGREEMENT WITH THE IMF AND PROVIDES THE GOI WITH A DETAILED REFORM PLAN, A BILATERAL AID PACKAGE WOULD BE CONSIDERED. ¶6. (U) IN JANUARY, ITALY INCREASED A FUND IT MAINTAINS FOR HELPING ITS CITIZENS RESIDENT ABROAD. OF 20M EUROS NOW ALLOTTED TO THE FUND, 10M EUROS WERE SLOTTED FOR ITALIANS IN ARGENTINA. THIS MONEY WOULD COVER BASIC NEEDS FOR THE POOR AND PROVIDE SUPPORT FOR ESTABLISHING SMALL AND MEDIUM ENTERPRISES THAT COULD CREATE NEW JOBS. THE GOI HAS ALSO SENT MEDICINE TO ARGENTINA. ¶7. (C) BECAUSE THE GOI IS CONCERNED ABOUT THE SECURITY RISKS INHERENT IN THE TUMULTUOUS POLITICAL ENVIRONMENT, IT HAS INCREASED PRECAUTIONS AT ITS FACILITIES IN ARGENTINA. PIETROGIACOMO NOTED THAT, FORTUNATELY, MILITARY TAKEOVER IS NO LONGER AN OPTION FOR A TROUBLED LATIN AMERICAN COUNTRY. CONFIDENTIAL PAGE 04 ROME 00713 121722Z WHAT MAKES DUHALDE STRONG IS THE LACK OF ALTERNATIVES TO HIM. ¶8. (C) RUCKAUF REQUESTED THAT ITALY BE REPRESENTED IN THE INTERNATIONAL COMMITTEE SUPPORTING ARGENTINA THAT PRESIDENT BUSH AND PM BLAIR WERE ORGANIZING. THE ITALIANS PROPOSED PROFESSOR TANZI, UNDERSECRETARY FOR FINANCE AT THE MINISTRY OF ECONOMIC AFFAIRS. PROF. TANZI WORKED FOR THE IMF FOR MANY YEARS AND KNOWS ARGENTINA WELL. HE IS ALSO WELL KNOWN TO THE ARGENTINES. ¶9. (SBU) ACTION REQUEST: PIETROGIACOMO ASKED FOR READOUTS OF THIS WEEK'S CONVERSATIONS BETWEEN MINISTER OF ECONOMY REMES LENICOV AND U.S. TREASURY AND IMF OFFICIALS. POST WOULD APPRECIATE ANY INFORMATION THAT WE CAN SHARE WITH THE MFA. SEMBLER CONFIDENTIAL > 2002ROME00713 - Classification: CONFIDENTIAL