MID-EAST PEACE PROCESS: WHAT TO EXPECT OF ITALY AS

C O N F I D E N T I A L ROME 003214 SIPDIS E.O. 12958: DECL: 06/10/2013 TAGS: EU IS IT KPAL PREL EUN SUBJECT: MID-EAST PEACE PROCESS: WHAT TO EXPECT OF ITALY AS PRESIDENT OF THE EU ON THE MEPP REF: A. ROME 2766 ¶B. ROME 2646 Classified By: POLITICAL MINISTER COUNSELOR THOMAS COUNTRYMAN FOR REASO NS 1.5 (B) AND (D) ¶1. (C) Summary: Italy has identified the MidEast Peace Process as among its top foreign policy priorities during its EU Presidency (July-December 2003). PM Berlusconi has consciously upgraded Italy's relations with Israel to balance its traditional close ties to the Palestinians and make the GOI better able to collaborate closely with the USG within the Quartet. At the same time, it is conscious that EU decision-making process, and continued Israeli distrust of the EU, will limit its ability to innovate -- we should not expect the Italians to single-handedly reverse the feeble EU record in the peace process. Italian hopes of replacing Moratinos with an Italian candidate appear to be fading. PM Berlusconi and FM Frattini would like Italy to host the first of two international peace conferences called for by the roadmap in Sicily in Fall 2003 (Refs A-B). Israeli, Palestinian and Egyptian representatives in Rome share our view that Italy's balanced ties at least give a basis for hope that the Italian Presidency has an opportunity to make the EU contribution to the peace process more visible and productive. End summary. BALANCING TIES WITH ISRAEL AND PALESTINE -------------- ¶2. (C) Since taking office two years ago, Berlusconi has consciously sought to improve Italy's ties with Israel. Besides hosting PM Sharon early in their respective tenures, Berlusconi has gone out of his way to keep in phone touch with the Israeli leader. Of greater substance, a succession of Italian technical ministers (communications, industry, transportation, science) have visited Israel or hosted their Israeli counterparts and signed substantive cooperation agreements. This has been accompanied by a conscious shift away from the traditional GOI support for Arafat, who Berlusconi once courted with money from his own pocket. Primarily at the request of President Bush, Berlusconi has avoided direct contact with ARAFAT for over a year, and he told visiting Israeli President Katsav last year that he would "never" again see Arafat. (This private comment was immediately given to the press by the Israeli Embassy). The GOI has in turn balanced the shunning of ARAFAT with the continuation of the annual subsidy that keeps afloat the Palestinian "embassy" in Rome and -- more theoretically -- with Berlusconi's proposal of a "Marshall Plan" for Palestinian economic development. This re-balancing is consistent with Berlusconi's personal politics and with his desire to align his foreign policy as close as possible to President Bush's. Italian diplomats have made clear that they hope it has the added benefit of more Italian credibility with the US - and a higher EU profile - within the Quartet. -------------- WITHIN THE QUARTET, AND WITHIN THE EU -------------- ¶3. (C) The Italians are conscious -- as we should be -- that their ability to make the EU a more effective player will be limited by the EU's own history (which has led to Israel's distrust of the EU) and tortured decision process. For example, Berlusconi was eager to make his recent visit to Israel before assuming the EU Presidency, knowing that it would be harder to keep his promise (made personally to President Bush) not to see ARAFAT once he wore the EU President's hat. His haste to make the visit probably contributed to the less-than-subtle way that he avoided an Arafat meeting, which generated in turn criticism from the French and other EU ministers that his snubbing was inconsistent with agreed EU policy. Though Berlusconi shot back with a tried-and-true one-liner (De Villepin "missed a great opportunity to keep quiet"),the fact remains that the Italians start in a hole in terms of bringing the EU policy around to a similar re-balancing. FM Frattini has stated publicly Italy's desire to have the EU gain a "higher profile" within the Quartet. If this is supported by the US (Berlusconi may raise it in his July 20 call on the President),it would vindicate Berlusconi's re-balancing approach. ¶4. (C) We expect the GOI will be closer to the USG, within the Quartet, than recent EU presidencies. In the Italian view, the most positive factor in the current process is the personal commitment of President Bush. Berlusconi believes that he can take advantage of a close personal relationship with the President to support and share that commitment. It will do so by seeking to establish EU positions that will be more consistent with the US view, and by coordinating closely with the US on any diplomatic mission to the region. It should also be more willing than recent EU Presidents to - rapidly - add the weight of the EU Presidency to any pressing of either the Palestinians or Israel that the US finds necessary. The GOI will run the risk of being yanked back by EU colleagues if it pushes too far (e.g., if Berlusconi were again to snub Arafat). They are realistic, knowing that the real role of the Italian Presidency is limited, all the more so as Solana appears determined to keep a tighter rein on the process by naming as Moratinos' successor someone more dynamic and closer to Solana himself. But this limitation will not prevent the Italian representatives (Director-General for Middle East Ricardo Sessa or Eastern Med office director Luca Ferrari) at any Quartet meeting from speaking out strongly. Both have strong experience with the region, the full confidence of the Berlusconi government, and (especially Ferrari, the main architect of the GOI's rebalancing) a pre-disposition to agree with the USG. ¶5. (C) More publicly, the GOI would like to make four distinctly Italian contributions to the peace process, most of them long shots: -- The candidacy of Ambassador to Damascus Laura Mirachian to replace Moratinos as special EU envoy, once hopeful, now appears all but finished. At best, the GOI looks forward to working with a replacement who will be "more competent and less jaded" than Moratinos. -- Second, they will continue to push the idea of a concerted EU economic program for Palestinian development, particularly if there is significant progress in Phase one of the roadmap. MFA officials concede it has little chance of EU approval, partly because of its close association with Berlusconi himself, and partly because this is one area of foreign assistance where EU states prefer to get the credit (and leverage) for individual contributions, rather than through the EU. -- Third, PM Berlusconi has restated his desire to host (in Erice, Sicily) the international peace conference called for in the second phase of the roadmap. In his June meeting with Berlusconi, Sharon did not object to the idea as long as the situation on the ground corresponded to what it should be at the end of phase I of the roadmap (Ref A). Luca Fratini, Ferrari's deputy, recently outlined what the MFA saw as key to reaching that goal: that the US encourage Israel to continue the settlement freeze; that the US discourage Israel from building a security fence; and the adequate functioning of a multinational implementation monitoring mechanism. (FM Frattini, in a June 11 speech at the Center for Defense Studies in Rome praised the President's decision to send the first group of American observers to the region, saying that the roadmap cannot be carried out unless there was a monitoring mechanism on the ground. He added that Italy, with a demonstrated expertise in monitoring work, stands ready to assist if called upon by the US (ref B). -- Fourth, Berlusconi has invited Abu Mazen to Rome, ideally in July (at this moment, it seems unlikely that this will occur before September). At this point, the GOI has no concrete objective for that meeting, but we are confident it will consult closely with the USG as soon as the meeting is scheduled. -------------- ISRAELI, PALESTINIAN AND EGYPTIAN VIEWPOINTS -------------- ¶6. (C) Israel is optimistic about the Italian Presidency because it will be a "balanced Presidency," said Ofer Bavly, the spokesman of the Embassy of Israel in Rome. Israel considers Berlusconi to be more balanced on the Israeli/Palestinian issue than previous Italian governments and EU presidencies. Given Italy's excellent relations with Israel and with the Arab world, Bavly expected Italy to play a positive mediation role that other EU countries cannot. Israel will always look to the US for the leading mediation role in the MEPP, but does not mind a greater EU role in the MEPP as long as the EU views are balanced and the EU plays a complementary role to that of the US, said Bavly. ¶7. (C) As far as tangible steps Italy could play during its Presidency, Bavly suggested that the EU ought to apply pressure on the PA, Syria, and other countries in the region that get economic aid from the EU to commit seriously to fighting terrorism. He did not expect Italy to put any "real pressure" on Israel during its Presidency because the Berlusconi government has a "far greater understanding" of Israel's security needs than did previous Italian governments and EU Presidencies. Bavly expected any concrete achievements during the Italian Presidency to come through the Quartet. Israel expects Italy to coordinate well and not to compete with the US in the Quartet. Israel wants to see the US and the EU work well together within the Quartet, not the US supporting Israel and the EU supporting the Arabs, said Bavly. ¶8. (C) Nemer Hamad, the senior PA representative in Rome, expected Italy to coordinate equally within the 15 EU members and the USG on the MEPP during its Presidency. It will not be Italy as an individual country that is calling the shots, predicted Hamad, but as the EU President within the Quartet and in full coordination with the US. Full unrestricted acceptance of the roadmap by both parties is an indispensable starting point for any serious progress in the region. Without that, even the best intentions of the Quartet will be of little help, insisted Hamad. ¶9. (C) As long as the EU does not have a common foreign policy, it will not be able to exert useful pressure on either side, said Hamad. In order for the EU to serve as a mediator in the Israeli/Palestinian conflict, it must be accepted by both parties. In that sense, Italy, with its excellent ties to both the Arab world and Israel, could play a key coordination role within the Quartet, between the EU and the US, having the trust of both Israelis and Palestinians. Italy's success during the Presidency will depend primarily on Sharon's continued willingness to implement the roadmap --the only possible road to an eventual peace-- and the US' willingness to pressure Sharon to do that, said Hamad. ¶10. (C) The real test for Italy and the international community is the implementation of the roadmap, said Ahmed Adel, NEA Watcher at the Embassy of Egypt in Rome. The MEPP will give Italy an opportunity to reunite the EU politically after its political division over Iraq and will give Berlusconi the opportunity to play an important and visible leadership role at the international level. Italy should use its positive relations with Iran and Syria to convey actively the US message that Iran and Syria should not disrupt the progress of the MEPP. Italy and the EU could and should play a positive role in the monitoring mechanism because they understand well the reality of the situation on the ground both for Palestinians and for Israelis. When implementation of the roadmap proves difficult, Italy should play a balanced role, acknowledging the reality and challenges faced by both sides, said Adel. Sembler NNNN 2003ROME03214 - Classification: CONFIDENTIAL