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

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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
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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.
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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

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2002ROME00713 - Classification: CONFIDENTIAL