ITALY: 2003 REPORT TO CONGRESS ON ALLIED CONTRIBUTIONS TO THE COMMON DEFENSE

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 11 OF 12 ROME 000353 
 
SIPDIS 
 
STATE FOR PM/B - SENIOR ADVISOR 
STATE ALSO FOR EUR/WE AND EUR/RPM 
DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP, 
OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU 
 
E.O. 12958: N/A 
TAGS: PREF, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, MCAP, MARR, IT, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO, ITPREF, NATO 
SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED 
CONTRIBUTIONS TO THE COMMON DEFENSE 
 
 UNCLASSIFIED 
 
PAGE 02 ROME 00353 11 OF 12 291714Z 
KOSOVO, THE CURRENT PRIORITIES COVER THE FOLLOWING AREAS: 
HEALTH, INFRASTRUCTURES AND SUPPORT OF MEDIUM AND SMALL SIZED 
COMPANIES. ITALIAN MFA PLANS TO CONCENTRATE FUTURE 
INITIATIVES ON INTERVENTION AIMED TO SUPPORT ECONOMIC 
DEVELOPMENT OF THE PRIVATE SECTOR AND INSTITUTIONAL REFORMS 
 
47. (U) THE ITALIAN PROGRAM OF COOPERATION STARTED AFTER THE 
AGREEMENT BETWEEN THE GOVERNMENT OF SKOPJE AND THE ODA 
DEPARTMENT OF MFA AND CONSISTS OF THE FOLLOWING INITIATIVES: 
 
-- RATIONALIZATION OF THE MANAGING SECTOR AND MODERNIZATION 
OF BIOMEDICAL EQUIPMENT: A GIFT OF USD 1.14 MILLION AND A 
CREDIT AID OF USD 2.58 MILLION. THE PROGRAM STARTED IN 
FEBRUARY 2000. AT PRESENT IT IS UNDER IMPLEMENTATION FOR THE 
GIFT PORTION OF THE INTERVENTION WITH THE TECHNICAL 
ASSISTANCE PROVIDED BY ITALIAN EXPERTS TO THE LOCAL 
AUTHORITIES FOR THE CREATION OF THE NATIONAL SYSTEM OF 
CLINICAL ENGINEERING AND FOR THE MODERNIZATION OF EXISTING 
MEDICAL EQUIPMENT. 
-- LINE OF SOFT CREDIT FOR USD 12.7 MILLION, AIMED AT THE 
SUPPLY OF ITALIAN GOODS AND SERVICES FOR THE SAME VALUE IN 
ORDER TO SUPPORT THE ACCESS OF MACEDONIAN SMALL AND MEDIUM 
SIZED COMPANIES TO CREDITS AND OTHER FINANCIAL INSTRUMENTS. 
THE ADVISORY ITALIAN COMPANY CHOSEN IS "FORTRADE FINANCING 
SPA8 BASED IN MILAN. 
-- PROGRAM FOR THE CONSTRUCTION OF INFRASTRUCTURE FOR 
MANAGEMENT OF WATER RESOURCES AND FOR THE ENVIRONMENTAL 
PROTECTION OF THE RADIKA RIVER IN THE TOWN OF ROSTUSE (USD 
5.6 MILLION),IS SCHEDULED TO BE APPROVED BY THE ODA 
COMMITTEE IN APRIL. AT THE MOMENT THE PROJECT IN UNDER 
REVIEW BY THE UTC AND IN THE MEANTIME THE MACEDONIAN 
 UNCLASSIFIED 
 
PAGE 03 ROME 00353 11 OF 12 291714Z 
COUNTERPART WILL PREPARE THE FORMAL ACCEPTANCE OF THE 
DOCUMENT. 
-- EMERGENCY PROGRAMS: THROUGH 2001 USD 4.13 MILLION HAVE 
BEEN ALLOCATED FOR PROGRAMS IN FAVOR TO POPULATION DAMAGED BY 
THE RECENT CIVIL WAR. THESE FUNDS HAVE BEEN USED FOR 
INTERVENTION IN THE SOCIAL AND HEALTH AND AGRICULTURAL AREAS 
AND THROUGH DIRECT MANAGEMENT BY INTERNATIONAL ORGANIZATION 
LIKE UNICEF, OMS, FAO AND UNDP. 
IN LINE WITH THE 1999-2001 COMMITMENTS, ITALY ANNOUNCED AN 
OVERALL COMMITMENT OF USD 17.2 MILLION EURO FOR THE PERIOD 
2002-2004. 
 
-------------------------- 
ALBANIA 
-------------------------- 
 
48. (U) STARTING FROM 1992, THE ITALIAN ODA TO ALBANIA 
REACHED THE OVERALL AMOUNT OF USD 360 MILLION, OF WHICH USD 
349 MILLION ALREADY DISBURSED. ITALY IS ALBANIA'S LARGEST 
BILATERAL DONATOR AND THE SECOND LARGEST DONATOR AFTER EU. 
THE VOLUME OF THE FINANCIAL COMMITMENTS TOWARD ALBANIA 
FACILITATED THE CREATION OF A PATH OF STRATEGIC PARTNERSHIP 
BETWEEN THE TWO COUNTRIES THAT LED TO THE ALBANIAN 
RECOGNITION OF ITALY AS DOOR OF EUROPE8 IN THE PROCESS OF 
STABILIZATION AND ASSOCIATION TO EU. 
 
49. (U) THE PRIORITY SECTORS AT THE MOMENT ARE: ELECTRICITY, 
ROAD, WATER, HEALTH, AGRICULTURE, ENVIRONMENT, 
EDUCATION-TRAINING AND GENERAL GOVERNMENT. 
-- ROAD SECTOR: AID CREDIT OF ABOUT USD 27.9 MILLION; 
-- ELECTRICITY SECTOR: THE OVERALL COMMITMENT IS OF USD 53.7 
 UNCLASSIFIED 
 
PAGE 04 ROME 00353 11 OF 12 291714Z 
MILLION AS AID CREDIT, OF WHICH USD 41.3 MILLION APPROVED, BY 
THE DIRECTION COMMITTEE IN DECEMBER 2001; 
-- WATER SECTOR: A USD 31 MILLION AID CREDIT FOR INTERVENTION 
IN THE AQUEDUCT OF TIRANA IS UNDER FINANCING; 
-- AGRICULTURAL SECTOR: A GIFT OF USD 20.7 MILLION FOR 
POLICIES OF SUPPORT OF AGRICULTURAL SECTOR IS UNDER 
DISBURSEMENT; 
-- HEALTH SECTOR: COMMITMENT OF A GIFT OF USD 3.2 MILLION AND 
AN AID CREDIT OF USD 5.16 MILLION; 
-- PASARP (&PROGRAM OF ACTIVITIES SUPPORT OF THE ALBANIAN 
REFUGEE POPULATION8): ITALY CO-FINANCES IDA WITH USD 12.4 
MILLION FOR THIS INITIATIVE, AIMED TO SUPPORT THE HUMAN 
DEVELOPMENT AND THE STRAIGHTENING OF INSTITUTIONS AT THE 
LOCAL LEVEL. 
 
-------------------------- 
PEACEKEEPING AND HUMANATARIAN OPERATIONS 
-------------------------- 
50. (U) MOD INDICATES THAT 10,386 PERSONNEL ARE CURRENTLY 
(EARLY DECEMBER 2002) EMPLOYED IN INTERNATIONAL (NATO AND UN) 
PEACEKEEPING AND HUMANITARIAN INITIATIVES, MOSTLY IN THE 
 
 UNCLASSIFIED 
 
 UNCLASSIFIED PTQ1553 
 
PAGE 01 ROME 00353 12 OF 12 291714Z 
ACTION PM-00 
 
INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00 
 SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00 
 LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00 
 SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W 
 --------------------------2DAA2F 291714Z /38 
O 291637Z JAN 03 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC IMMEDIATE 7875 
INFO SECDEF WASHDC IMMEDIATE 
ALL NATO POST COLLECTIVE PRIORITY 
JOINT STAFF WASHDC PRIORITY 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
 
UNCLAS SECTION 12 OF 12 ROME 000353 
 
SIPDIS 
 
STATE FOR PM/B - SENIOR ADVISOR 
STATE ALSO FOR EUR/WE AND EUR/RPM 
DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP, 
OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU 
 
E.O. 12958: N/A 
TAGS: PREF, MCAP, MARR, NATO, IT 
SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED 
CONTRIBUTIONS TO THE COMMON DEFENSE 
 
 UNCLASSIFIED 
 
PAGE 02 ROME 00353 12 OF 12 291714Z 
BALKANS AND IN MIDDLE EAST. THE GOI FINANCED ITALY,S 
PARTICIPATION IN INTERNATIONAL PEACEKEEPING AND HUMANITARIAN 
OPERATIONS WITH USD 1.29 BILLION IN FY 2002. IN PARTICULAR, 
USD 979 MILLION WERE FOR THE OPERATIONS IN THE BALKANS, WHILE 
THE REMAINING USD 307 MILLION WERE FOR ANTI TERRORISM 
MEASURES AND OTHER MISCELLANEOUS ITEMS. THE GOI FUNDS THESE 
OPERATIONS THROUGH APPROPRIATE PIECES OF LEGISLATION. 
 
-------------------------- 
PEACEKEEPING OPERATIONS 
-------------------------- 
51. (U) -- KFOR SUPPORT: TOTAL OF 4350 PERSONNEL DEPLOYED; 
1000 AIR FORCE PERSONNEL (ALBANIAN AIR ACADEMY AND 
RESTRUCTURE OF PORO AIRPORT,) 780 PERSONNEL (NATO/TIRANA),
210 NAVAL PERSONNEL FOR IMMIGRATION ACTIVITIES, AND 29 
MILITARY ADVISORS TO SUPPORT ALBANIA OPERATIONS IN ADDITION 
TO 270 PERSONNEL (PRIMARILY CARABINIERI) FOR MULTINATIONAL 
SPECIALIZED UNITS. FROM OCT 4, 2002 UNTIL APRIL 2003, KFOR 7 
WILL BE UNDER THE COMMAND OF AN ITALIAN GENERAL. 
-- SFOR SUPPORT: ITALY MAINTAINS APPROXIMATELY 1221 SOLDIERS 
IN BOSNIA IN SUPPORT OF OPERATION JOINT FORGE. APPROXIMATELY 
800 OF THESE SOLDIERS ARE PART OF THE IT-GE BRIGADE. 
-- ALBANIA (NATO HEADQUARTERS-TIRANA): ITALY HAS 
APPROXIMATELY 1146 SOLDIERS DEPLOYED IN ALBANIA SUPPORTING 
OPERATION JOINT GUARDIAN. ITALY ALSO PROVIDES BILATERAL 
MILITARY ASSISTANCE, APART FROM THE NATO MISSION, INCLUDING 
21 MILITARY ADVISORS AND 240 NAVAL PERSONNEL FOR IMMIGRATION 
ACTIVITIES. AS PART OF THE EU'S MAPE PROGRAM, ITALY PROVIDES 
11 CARABINIERI. 
-- NATO SUPPORT: 200 PERSONNEL NATO/SKOPJIE TO SUPPORT 
OPERATION AMBER FOX, 430 PERSONNEL FOR UN INTERNATIONAL 
 UNCLASSIFIED 
 
PAGE 03 ROME 00353 12 OF 12 291714Z 
SECURITY ASSISTANCE FORCE JAN 02, AND 314 PERSONNEL FOR 
VARIOUS MISSIONS: UNTSO, UNIFIL, UNMEE, MINURSO, UNIKOM, 
UNMIK, AND UNMOGIP. 
 
-------------------------- 
OTHER MULTILATERAL MISSIONS 
-------------------------- 
52. (U) -- MULTINATIONAL FORCE AND OBSERVERS (MFO): ITALY 
CONTRIBUTES 81 PERSONNEL AND THREE NAVAL VESSELS TO THIS 
MISSION. 
-- EUROPEAN COMMUNITY MONITORING MISSION (ECMM): ITALY 
CONTRIBUTES APPROXIMATELY 15 OBSERVERS TO THE EUROPEAN 
COMMUNITY OBSERVATION MISSION IN THE FORMER REPUBLIC OF 
YUGOSLAVIA (FRY). 
-- RACVIAC CROATIA (UN): 2 PERSONNEL. 
-- MIATM MALTA (IT): 30 PERSONNEL. 
-- MINURSO SAHARA OCC (UN): 5 PERSONNEL. 
-- UNIFIL LEBANON (UN): 50 PERSONNEL. 
-- MONUC CONGO (UN): 3 PERSONNEL. 
-- TIPH II ISRAEL (EU): 1 PERSON. 
-- UNMEE ETHIOPIA-ERITREA (UN): 10 PERSONNEL. 
-- UNMOGIP INDIA-PAKISTAN (UN): 7 PERSONNEL. 
-- UNTSO SINAI-ISRAEL-LEBANON-EGYPT (UN): 7 PERSONNEL. 
-- UNIKOM IRAQ-KUWAIT (UN): 5 PERSONNEL. 
SKODON 
 
 UNCLASSIFIED 
 
> 
@@@OASYS@@@ 
 
 UNCLASSIFIED PTQ1538 
 
PAGE 01 ROME 00353 01 OF 12 291710Z 
ACTION PM-00 
 
INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00 
 SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00 
 LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00 
 SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W 
 --------------------------2DA98B 291711Z /38 
O 291637Z JAN 03 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC IMMEDIATE 7864 
INFO SECDEF WASHDC IMMEDIATE 
ALL NATO POST COLLECTIVE PRIORITY 
JOINT STAFF WASHDC PRIORITY 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
 
UNCLAS SECTION 01 OF 12 ROME 000353 
 
SIPDIS 
 
STATE FOR PM/B - SENIOR ADVISOR 
STATE ALSO FOR EUR/WE AND EUR/RPM 
DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP, 
OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU 
 
E.O. 12958: N/A 
TAGS: PREF, MCAP, MARR, NATO, IT 
SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED 
CONTRIBUTIONS TO THE COMMON DEFENSE 
 
 UNCLASSIFIED 
 
PAGE 02 ROME 00353 01 OF 12 291710Z 
REF: A. 02SECSTATE 219916 
 B. 02ROME 06091 
 

r />
COMMITTEE IN APRIL. AT THE MOMENT THE PROJECT IN UNDER

REVIEW BY THE UTC AND IN THE MEANTIME THE MACEDONIAN

UNCLASSIFIED



PAGE 03 ROME 00353 11 OF 12 291714Z

COUNTERPART WILL PREPARE THE FORMAL ACCEPTANCE OF THE

DOCUMENT.

-- EMERGENCY PROGRAMS: THROUGH 2001 USD 4.13 MILLION HAVE

BEEN ALLOCATED FOR PROGRAMS IN FAVOR TO POPULATION DAMAGED BY

THE RECENT CIVIL WAR. THESE FUNDS HAVE BEEN USED FOR

INTERVENTION IN THE SOCIAL AND HEALTH AND AGRICULTURAL AREAS

AND THROUGH DIRECT MANAGEMENT BY INTERNATIONAL ORGANIZATION

LIKE UNICEF, OMS, FAO AND UNDP.

IN LINE WITH THE 1999-2001 COMMITMENTS, ITALY ANNOUNCED AN

OVERALL COMMITMENT OF USD 17.2 MILLION EURO FOR THE PERIOD

2002-2004.



--------------

ALBANIA

--------------



48. (U) STARTING FROM 1992, THE ITALIAN ODA TO ALBANIA

REACHED THE OVERALL AMOUNT OF USD 360 MILLION, OF WHICH USD

349 MILLION ALREADY DISBURSED. ITALY IS ALBANIA'S LARGEST

BILATERAL DONATOR AND THE SECOND LARGEST DONATOR AFTER EU.

THE VOLUME OF THE FINANCIAL COMMITMENTS TOWARD ALBANIA

FACILITATED THE CREATION OF A PATH OF STRATEGIC PARTNERSHIP

BETWEEN THE TWO COUNTRIES THAT LED TO THE ALBANIAN

RECOGNITION OF ITALY AS DOOR OF EUROPE8 IN THE PROCESS OF

STABILIZATION AND ASSOCIATION TO EU.



49. (U) THE PRIORITY SECTORS AT THE MOMENT ARE: ELECTRICITY,

ROAD, WATER, HEALTH, AGRICULTURE, ENVIRONMENT,

EDUCATION-TRAINING AND GENERAL GOVERNMENT.

-- ROAD SECTOR: AID CREDIT OF ABOUT USD 27.9 MILLION;

-- ELECTRICITY SECTOR: THE OVERALL COMMITMENT IS OF USD 53.7

UNCLASSIFIED



PAGE 04 ROME 00353 11 OF 12 291714Z

MILLION AS AID CREDIT, OF WHICH USD 41.3 MILLION APPROVED, BY

THE DIRECTION COMMITTEE IN DECEMBER 2001;

-- WATER SECTOR: A USD 31 MILLION AID CREDIT FOR INTERVENTION

IN THE AQUEDUCT OF TIRANA IS UNDER FINANCING;

-- AGRICULTURAL SECTOR: A GIFT OF USD 20.7 MILLION FOR

POLICIES OF SUPPORT OF AGRICULTURAL SECTOR IS UNDER

DISBURSEMENT;

-- HEALTH SECTOR: COMMITMENT OF A GIFT OF USD 3.2 MILLION AND

AN AID CREDIT OF USD 5.16 MILLION;

-- PASARP (&PROGRAM OF ACTIVITIES SUPPORT OF THE ALBANIAN

REFUGEE POPULATION8): ITALY CO-FINANCES IDA WITH USD 12.4

MILLION FOR THIS INITIATIVE, AIMED TO SUPPORT THE HUMAN

DEVELOPMENT AND THE STRAIGHTENING OF INSTITUTIONS AT THE

LOCAL LEVEL.



--------------

PEACEKEEPING AND HUMANATARIAN OPERATIONS

--------------

50. (U) MOD INDICATES THAT 10,386 PERSONNEL ARE CURRENTLY

(EARLY DECEMBER 2002) EMPLOYED IN INTERNATIONAL (NATO AND UN)

PEACEKEEPING AND HUMANITARIAN INITIATIVES, MOSTLY IN THE



UNCLASSIFIED



UNCLASSIFIED PTQ1553



PAGE 01 ROME 00353 12 OF 12 291714Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DAA2F 291714Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7875

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 12 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 12 OF 12 291714Z

BALKANS AND IN MIDDLE EAST. THE GOI FINANCED ITALY,S

PARTICIPATION IN INTERNATIONAL PEACEKEEPING AND HUMANITARIAN

OPERATIONS WITH USD 1.29 BILLION IN FY 2002. IN PARTICULAR,

USD 979 MILLION WERE FOR THE OPERATIONS IN THE BALKANS, WHILE

THE REMAINING USD 307 MILLION WERE FOR ANTI TERRORISM

MEASURES AND OTHER MISCELLANEOUS ITEMS. THE GOI FUNDS THESE

OPERATIONS THROUGH APPROPRIATE PIECES OF LEGISLATION.



--------------

PEACEKEEPING OPERATIONS

--------------

51. (U) -- KFOR SUPPORT: TOTAL OF 4350 PERSONNEL DEPLOYED;

1000 AIR FORCE PERSONNEL (ALBANIAN AIR ACADEMY AND

RESTRUCTURE OF PORO AIRPORT,) 780 PERSONNEL (NATO/TIRANA),

210 NAVAL PERSONNEL FOR IMMIGRATION ACTIVITIES, AND 29

MILITARY ADVISORS TO SUPPORT ALBANIA OPERATIONS IN ADDITION

TO 270 PERSONNEL (PRIMARILY CARABINIERI) FOR MULTINATIONAL

SPECIALIZED UNITS. FROM OCT 4, 2002 UNTIL APRIL 2003, KFOR 7

WILL BE UNDER THE COMMAND OF AN ITALIAN GENERAL.

-- SFOR SUPPORT: ITALY MAINTAINS APPROXIMATELY 1221 SOLDIERS

IN BOSNIA IN SUPPORT OF OPERATION JOINT FORGE. APPROXIMATELY

800 OF THESE SOLDIERS ARE PART OF THE IT-GE BRIGADE.

-- ALBANIA (NATO HEADQUARTERS-TIRANA): ITALY HAS

APPROXIMATELY 1146 SOLDIERS DEPLOYED IN ALBANIA SUPPORTING

OPERATION JOINT GUARDIAN. ITALY ALSO PROVIDES BILATERAL

MILITARY ASSISTANCE, APART FROM THE NATO MISSION, INCLUDING

21 MILITARY ADVISORS AND 240 NAVAL PERSONNEL FOR IMMIGRATION

ACTIVITIES. AS PART OF THE EU'S MAPE PROGRAM, ITALY PROVIDES

11 CARABINIERI.

-- NATO SUPPORT: 200 PERSONNEL NATO/SKOPJIE TO SUPPORT

OPERATION AMBER FOX, 430 PERSONNEL FOR UN INTERNATIONAL

UNCLASSIFIED



PAGE 03 ROME 00353 12 OF 12 291714Z

SECURITY ASSISTANCE FORCE JAN 02, AND 314 PERSONNEL FOR

VARIOUS MISSIONS: UNTSO, UNIFIL, UNMEE, MINURSO, UNIKOM,

UNMIK, AND UNMOGIP.



--------------

OTHER MULTILATERAL MISSIONS

--------------

52. (U) -- MULTINATIONAL FORCE AND OBSERVERS (MFO): ITALY

CONTRIBUTES 81 PERSONNEL AND THREE NAVAL VESSELS TO THIS

MISSION.

-- EUROPEAN COMMUNITY MONITORING MISSION (ECMM): ITALY

CONTRIBUTES APPROXIMATELY 15 OBSERVERS TO THE EUROPEAN

COMMUNITY OBSERVATION MISSION IN THE FORMER REPUBLIC OF

YUGOSLAVIA (FRY).

-- RACVIAC CROATIA (UN): 2 PERSONNEL.

-- MIATM MALTA (IT): 30 PERSONNEL.

-- MINURSO SAHARA OCC (UN): 5 PERSONNEL.

-- UNIFIL LEBANON (UN): 50 PERSONNEL.

-- MONUC CONGO (UN): 3 PERSONNEL.

-- TIPH II ISRAEL (EU): 1 PERSON.

-- UNMEE ETHIOPIA-ERITREA (UN): 10 PERSONNEL.

-- UNMOGIP INDIA-PAKISTAN (UN): 7 PERSONNEL.

-- UNTSO SINAI-ISRAEL-LEBANON-EGYPT (UN): 7 PERSONNEL.

-- UNIKOM IRAQ-KUWAIT (UN): 5 PERSONNEL.

SKODON



UNCLASSIFIED



>

@@@OASYS@@@



UNCLASSIFIED PTQ1538



PAGE 01 ROME 00353 01 OF 12 291710Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA98B 291711Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7864

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 01 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 01 OF 12 291710Z

REF: A. 02SECSTATE 219916

B. 02ROME 06091



1. (U) THE FOLLOWING IS THE UNCLASSIFIED VERSION OF EMBASSY

ROME'S BURDENSHARING REPORT (REF B.) PLEASE NOTE THE CHANGE

IN THE ESTIMATE ON FOREGONE RENT IN PARAGRAPH 37. EMBASSY

ROME'S POC FOR THE BURDENSHARING REPORT IS POL OFFICER RAFIK

MANSOUR. HE CAN BE REACHED AT (39) 06.4674.2831 OR AT

MANSOURRK@STATE.GOV. PLEASE NOTE THAT THIS REPORT USES THE

DEC 4 OFFICIAL RATE OF EXCHANGE: EURO1 = $1.0008, ROUNDED OFF

TO EURO1 = $1.



2. (U) BEGIN TEXT.



--------------

POLITICAL SITUATION

--------------



3. (U) DOMESTIC: PM BERLUSCONI AND HIS CENTER-RIGHT

COALITION REMAIN IN FIRM CONTROL OF THE PARLIAMENT. DESPITE

CONTINUED CRITICISM FROM THE CENTER-LEFT OPPOSITION,

THIS COALITION IS LIKELY TO ENDURE THROUGH ITS FULL TERM INTO

THE

SPRING OF 2006 (THE FIRST POST-WAR ITALIAN GOVERNMENT TO DO

SO). ITS MAJORITY IN PARLIAMENT IS SUFFICIENT TO ENSURE THAT

IT CAN WIN VOTES NOT ONLY ON CONTROVERSIAL DOMESTIC ISSUES,

BUT ALSO ON FOREIGN POLICY ISSUES OF CONCERN TO THE US, SUCH

AS THE DEPLOYMENT OF ITALIAN LAND FORCES TO AFGHANISTAN.

THE PRIME MINISTER REMAINS PUBLICLY SUPPORTIVE OF U.S.

POLICY, MOST NOTABLY IN HIS STATEMENTS CONCERNING POTENTIAL

MILITARY ACTION IN IRAQ.

UNCLASSIFIED



PAGE 03 ROME 00353 01 OF 12 291710Z



4. (U) THE EU: GOI PREPARATIONS FOR ITS EU PRESIDENCY,

FROM JULY THROUGH DECEMBER 2003, BEGAN TO DOMINATE ITALY'S

FOREIGN POLICY PRIORITIES TOWARDS EUROPE WHEN THE GOVERNMENT

RETURNED TO WORK IN SEPTEMBER. ITALY IS PLAYING AN ACTIVE

ROLE IN THE EUROPEAN UNION'S ONGOING CONVENTION. WHETHER THE

PRODUCT OF THIS PROCESS IS A "CONSTITUTION" AS SOME IN THE EU

HAVE CALLED FOR, OR A LESS AMBITIOUS TREATY BASED DOCUMENT,

THE GOI AGREES WITH ALMOST ALL ITS EU PARTNERS THAT IT MUST

ADDRESS STRUCTURAL CHANGES TO THE EU'S INSTITUTIONS THAT WILL

MAKE IT MORE DEMOCRATIC AND EFFICIENT, ESPECIALLY IN LIGHT OF

ENLARGEMENT. THE ITALIANS ARE HOPING TO HAVE THE CONCLUDING

SESSION OF AN INTER-GOVERNMENTAL CONFERENCE, PRESIDED OVER BY

HEADS-OF-STATE, ADOPT THE FINAL DOCUMENT BY THE END OF ITS

PRESIDENCY. ITALY IS A STRONG PROMOTER OF ESDP. NOW THAT

BERLIN PLUS (NATO/ESDP COORDINATION) ARRANGEMENTS HAVE BEEN

AGREED BETWEEN NATO AND THE EU, ITALY CAN BE EXPECTED TO BE A

MAJOR CONTRIBUTOR TO THE FIRST EU PEACEKEEPING MISSIONS IN

MACEDONIA AND (POTENTIALLY) BOSNIA.



5. (U) NATO-RUSSIA: ITALY IS A STRONG SUPPORTER OF

IMPROVED NATO-RUSSIA TIES. PM BERLUSCONI WAS THE MAIN DRIVER

BEHIND THE MAY 27-28 NATO-RUSSIA ROME SUMMIT WHICH

ESTABLISHED THE NATO-RUSSIA COUNCIL. HE IS AN ACTIVE

BOOSTER OF RUSSIA'S RAPPROCHEMENT WITH THE WEST. ITALY PLAYS

AN ACTIVE ROLE --

IN PARTNERSHIP WITH THE US AND OTHER KEY ALLIES -- IN

SUPPORTING FINANCIALLY THE DESTRUCTION OF RUSSIAN CW, AND IS

WEIGHING PROVISION OF SIMILAR SUPPORT FOR THE DECOMMISSIONING

OF RUSSIAN NUCLEAR SUBMARINES.



UNCLASSIFIED



PAGE 04 ROME 00353 01 OF 12 291710Z

6. (U) "IN TOGETHER, OUT TOGETHER" ARE WELCOME WORDS TO OUR

GOI INTERLOCUTORS AT ALL

LEVELS. EUROPE, INCLUDING ITALY, IS TAKING MORE

RESPONSIBILITY FOR ITS OWN BACKYARD BY TAKING OVER POLICING

FUNCTIONS IN BOSNIA POST IPTF. AS NOTED ABOVE, ITALY WILL BE

A KEY CONTRIBUTOR TO THE FOLLOW-ON MISSION TO NATO'S TASK

FORCE FOX. THE GOI CONTINUES TO PARTICIPATE IN SFOR AND KFOR

(INCLUDING ANOTHER KFOR COMMAND STARTING OCTOBER 2002.)

ITALY IS ALBANIA'S "BIGGEST BOOSTER," LARGEST BILATERAL

DONOR, INVESTOR, PROVIDER OF LAW ENFORCEMENT ASSISTANCE, AND

GENERAL BIG BROTHER. THIS ENGAGEMENT HELPS PROVIDE A

RELATIVELY STABLE ANCHOR IN A VOLATILE REGION.



7. (U) ITALY'S PARTICIPATION IN PFP: ITALY IS A STRONG

SUPPORTER OF THE PFP PROGRAM, WITH PARTICULAR EMPHASIS ON

IMPROVING THE CAPABILITIES AND QUALITY OF PFP COUNTRIES IN SE

EUROPE. ITALY HAS CLOSE AND EXTENSIVE TIES WITH ALBANIA,

CROATIA, ROMANIA, BULGARIA, FYROM, SLOVENIA AND SLOVAKIA AND

REGULARLY CONDUCTS BILATERAL MILITARY TALKS. DURING THE

CURRENT ROUND OF NATO ENLARGEMENT, ITALY SOUGHT TO HAVE

ROMANIA AND BULGARIA INCLUDED AND WORKED WITH ALL OF THE SE



UNCLASSIFIED



UNCLASSIFIED PTQ1540



PAGE 01 ROME 00353 02 OF 12 291711Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA99E 291711Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7865

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 02 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 02 OF 12 291711Z

EUROPEAN CANDIDATE COUNTRIES ON ECONOMIC, POLITICAL AND

MILITARY REFORMS TO RAISE THEIR CAPABILITIES IN ORDER TO

QUALIFY FOR MEMBERSHIP.



8. (U) THE GOI HAS SPONSORED MILITARY EXCHANGES ON ISSUES

SUCH AS INTELLIGENCE SHARING, COMMUNICATIONS AND LOGISTICS

PLANNING, PORT VISITS AND EXERCISES, TRAINING SEMINARS, AND

CONSULTATIONS WITH PFP COUNTRIES AND HAS PROMOTED COOPERATION

ON DEFENSE ACQUISITION. ITALY HAS ALSO INVESTIGATED TRAINING

OPPORTUNITIES BETWEEN THE ITALIAN CARABINIERI AND MILITARY

POLICE UNITS IN LATVIA, ESTONIA, ROMANIA AND BULGARIA, AND

BETWEEN ITALIAN ALPINI TROOPS AND MOUNTAIN UNITS FROM

MACEDONIA, SLOVENIA, AND ROMANIA. ITALIAN DIVERS AND

PARACHUTISTS HAVE TRAINED WITH BULGARIAN AND ROMANIAN UNITS

AS WELL.



9. (U) NATO MED DIALOGUE: ITALY IS ALSO DEDICATED TO

BREATHING LIFE INTO NATO'S MEDITERRANEAN DIALOGUE. PM

BERLUSCONI HAS INDICATED THAT STRENGTHENING THE DIALOGUE WILL

BE A GOI PRIORITY DURING ITALY'S EU PRESIDENCY IN 2003.



10. (U) NATO ENLARGEMENT: ALL THROUGHOUT 2002, ITALY HAS BEEN

IN FAVOR OF A ROBUST NATO ENLARGEMENT, PARTICULARLY AFTER

RUSSIAN CONCERNS ABOUT ENLARGEMENT WERE ADDRESSED. THE

ITALIANS FAVORED A "BALANCED ENLARGEMENT" OF NATO, ONE THAT

WOULD INCLUDE ROMANIA AND BULGARIA. ON DECEMBER 11, IN THE

PLENARY SESSION OF THE SOUTHEAST EUROPEAN DEFENSE MINISTERS,

MINISTER MARTINO EMPHASIZED THE IMPORTANCE OF ALBANIA,

CROATIA, AND MACEDONIA SEIZING THE OPPORTUNITY OF FUTURE NATO

MEMBERSHIP TO ACCELERATE THEIR DEFENSE REFORMS AND REGIONAL

COOPERATION AND PLEDGED DIRECT ITALIAN ASSISTANCE FOR THEIR

UNCLASSIFIED



PAGE 03 ROME 00353 02 OF 12 291711Z

EFFORTS.



11. (U) OEF: ITALY WAS ONE OF THE FIRST ALLIES TO OFFER

MILITARY ASSETS FOR OPERATION ENDURING FREEDOM. THE GOI

OFFERED A SUBSTANTIAL PACKAGE CONSISTING OF HER SOLE AIRCRAFT

CARRIER, 8 HARRIER AIRCRAFT, EIGHT HELICOPTERS, TWO FRIGATES,

A SUPPLY SHIP, 8 TORNADO AIRCRAFT, AN NBC UNIT, SIX EOD

TEAMS, ONE ENGINEER UNIT, AND AN ARMOURED REGIMENT WITH

EQUIPMENT. NOT ALL ASSETS WERE CALLED UPON, HOWEVER THE

AIRCRAFT CARRIER AND FRIGATES WERE AMONG THOSE THAT OPERATED

IN THEATER FOR SEVERAL MONTHS. ITALY'S PARLIAMENT VOTED

OVERWHELMINGLY IN NOVEMBER 2001 TO APPROVE ITALIAN

CONTRIBUTIONS TO OEF, AND AGAIN IN OCTOBER 2002 WHEN

ADDITIONAL ASSETS WERE MADE AVAILABLE. THE GOI HAS ALSO

OFFERED TO BACKFILL US TROOPS SERVING WITH NATO MISSIONS IN

THE BALKANS AS ANOTHER MEANS OF SUPPORTING OEF.



12. (U) THE GOI RECENTLY AGREED TO OUR REQUEST TO DEPLOY A

LIGHT INFANTRY BATTALION (APPROXIMATELY 1000 SOLDIERS) TO

SERVE AS A MANEUVER FORCE IN AFGHANISTAN BEGINNING IN MARCH,

2003. AT THAT POINT, ITALY WILL BE SECOND ONLY TO THE US IN

GROUND FORCES AND TOTAL FORCES COMMITTED TO OEF. IN

ADDITION, TWO ITALIAN C-130J AIRCRAFT BEGAN OPERATING OUT OF

MANAS AIR BASE IN OCTOBER.



--------------

ECONOMIC SITUATION

--------------



13. (U) ITALY HAS THE WORLD'S SIXTH LARGEST ECONOMY WITH A

GDP OF ABOUT USD 1.3 TRILLION IN 2002. ITS GDP GROWTH, AN

UNCLASSIFIED



PAGE 04 ROME 00353 02 OF 12 291711Z

ESTIMATED 0.3 PERCENT IN 2002 AND 1.5 PERCENT IN 2003, WAS

SLIGHTLY BELOW THE AVERAGE OF THE 12 MEMBER STATES OF THE

EUROPEAN ECONOMIC AND MONETARY UNIONS (EMU).



14. (U) THE GOI PRESENTED ITS 2003 BUDGET TO PARLIAMENT ON

OCTOBER 2. REVISIONS ARE EXPECTED BEFORE PARLIAMENT APPROVES

THE BUDGET IN LATE DECEMBER. THE 2003 BUDGET TOTALS USD

639.7 BILLION (OR 49.0 PERCENT OF GDP),WITH A DEFICIT OF USD

19.6 BILLION (OR 1.5 PERCENT OF GDP.) A PACKAGE OF USD 20

BILLION (OR 1.5 PERCENT OF GDP) IN SPENDING CUTS IS PARTLY

OFFSET BY A STIMULUS PACKAGE OF USD 7.5 BILLION (OR 0.4

PERCENT OF GDP) IN TAX CUTS AND INVESTMENTS IN

INFRASTRUCTURE. DEFENSE MINISTRY SPENDING CUTS WILL NOT

REQUIRE CUTS IN SPENDING ON PURCHASES OF U.S. EQUIPMENT,

ACCORDING TO DEPUTY FINANCE MINISTER BALDASSARRI AND FINANCE

UNDER SECRETARY TANZI.



15. (SBU) THE GOI HAD HOPED TO HAVE SERIOUS ECONOMIC REFORMS

IN PLACE BY NOW. FINANCE MINISTER TREMONTI'S PROGRAM CALLED

FOR IMPLEMENTATION OF MAJOR TAX REFORM IN 2002 AND PENSION

REFORM SOON AFTERWARD. THE CONTINUED GLOBAL DOWNTURN,



UNCLASSIFIED



UNCLASSIFIED PTQ1541



PAGE 01 ROME 00353 03 OF 12 291711Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9A1 291711Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7866

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 03 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 03 OF 12 291711Z

COMBINED WITH CONCERN THAT POSSIBLE ACTION IN IRAQ COULD DRAG

THE WORLD ECONOMY DOWN EVEN FURTHER, HAS COMPLICATED MATTERS.

TAX REVENUES ARE DOWN SUBSTANTIALLY, WHILE THE GOI HAS FOUND

IT VIRTUALLY IMPOSSIBLE TO CUT SPENDING.



16. (SBU) THE 2003 BUDGET IS THEREFORE A DIFFICULT

COMPROMISE. FINANCE MINISTER TREMONTI IS SEEKING TO COMBINE

FISCAL STIMULUS (TO AVOID A FURTHER SERIOUS DOWNTURN) WITH

SMALL CUTS IN CENTRAL GOVERNMENT SPENDING AND POLITICALLY

DIFFICULT CAPS ON REGIONAL AND MUNICIPAL SPENDING. THE FACT

THAT THIS BUDGET PLEASES ALMOST NO ONE MAY BE THE BEST

ARGUMENT THAT THE PAIN IS FAIRLY DISTRIBUTED.



--------------

DEFENSE POLICY/DEFENSE SPENDING

--------------



17. (U) FIGURES REGARDING THE PROPOSED ITALIAN DEFENSE BUDGET

HAVE BEEN PUBLISHED IN THE OFFICIAL DOCUMENTS TRANSMITTED BY

GOI TO THE PARLIAMENT ON OCTOBER 2. THE TOTAL MOD FUNDING

REQUEST FOR FY 2003 IS USD 19.61 BILLION, UP 3.1 PERCENT (OR

USD 590 MILLION) FROM THE MOD REQUEST FOR FY 2002. IN OTHER

TERMS, 2003 MOD APPROPRIATIONS AMOUNT TO 1.5% OF THE GDP,

COMPARED TO 1.52% OF 2002. THE DRAFT 2003 MOD BUDGET

PROVIDES A 3.1 PERCENT INCREASE, BUT ASSUMING A 1.9 PERCENT

INFLATION RATE IN 2003, THIS FIGURE REPRESENTS A MODEST

INCREASE IN REAL TERMS OVER 2002.



TABLE 1

SUMMARY OF MOD BUDGET: 2002-2003

UNCLASSIFIED



PAGE 03 ROME 00353 03 OF 12 291711Z

(IN BILLIONS OF USD)



FY 2002 FY 2003

%CHG CHG VALUE



1. NATIONAL DEFENSE 13.666 14.027

2.6 362

(AS % OF GDP) (1.09%) (1.07%)



2. DOMESTIC SECURITY

(CARABINIERI) 4.264 4.565 7.1

301

(AS % OF GDP) (0.34%) (0.35%)



3. OTHER 1.097 1.023 -6.7

-74

(AS % OF GDP) (0.1%) (0.35%)



4. TOTAL MOD

APPROPRIATIONS 19.025 19.615

3.1 590

(AS % OF GDP) (1.52%) (1.50%)

(AS % OF GOV BUDGET) (3.02%) (3.07%)



ADDENDUM:

GDP (1) 1,253 1,305 4.1

52

GOV BUDGET 630.062 639.706

UNCLASSIFIED



PAGE 04 ROME 00353 03 OF 12 291711Z

EXCHANGE RATE 1.00 1.00

SOURCE: GOVERNMENT'S 2003 BUDGET PROPOSAL (SEPTEMBER 2002).



18. (U) DEFENSE FUNCTION INCLUDES THE BUDGETS OF THE ARMY,

NAVY AND AIR FORCE AND EXCLUDES DOMESTIC SECURITY

(CARABINIERI) AND OTHER NON-ESSENTIAL MOD FUNCTIONS. THE

DEFENSE FUNCTION BUDGET FOR 2003 IS USD 14.03 BILLION, UP

2.6% OR USD 362 MILLION FROM 2002 AND IS MOSTLY DESIGNED TO

ASSURE THE CONTINUATION OF THE STRUCTURAL REFORM OF ARMED

FORCES (PERSONNEL AND OPERATIVE SPENDING) AND DEFENSE

MODERNIZATION PROJECTS (INVESTMENTS.) THE OPTIMAL

DISTRIBUTION OF DEFENSE FUNCTION SPENDING IS 70 PERCENT FOR

THE FUNCTIONING OF DEFENSE AND 30 PERCENT FOR DEFENSE

MODERNIZATION. THE 2003 BUDGET DEVOTES 76.1 PERCENT OF

OVERALL DEFENSE FUNCTION SPENDING FOR DEFENSE OPERATIONS

(74.4 PERCENT IN 2002 BUDGET) AND ONLY 23.9 PERCENT FOR

INVESTMENTS (25.6 PERCENT IN THE 2002 BUDGET.)



19. (U) AIR FORCE INVESTMENTS (USD 1,256 MILLION) ACCOUNT FOR

ALMOST FORTY PERCENT OF OVERALL ALLOTMENTS. THESE FUNDS ARE



UNCLASSIFIED



UNCLASSIFIED PTQ1543



PAGE 01 ROME 00353 04 OF 12 291711Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9B1 291712Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7867

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 04 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 04 OF 12 291711Z

RELATED TO THE DEVELOPMENT OF THE EUROFIGHTER (THE OVERALL

COMMITMENT UP TO 2015 IS USD 18.1 BILLION, WHILE THE

COMMITMENT FOR 2003 IS USD 564 MILLION,) THE CONTINUATION OF

THE LEASING CONTACT OF THE TORNADO (THE OVERALL COMMITMENT UP

TO 2015 IS USD 1.2 BILLION, WHILE THE COMMITMENT FOR 2003 IS

USD 181.2 MILLION) AND FOR THE PURCHASE OF TRANSPORT

AIRCRAFT.



20. (U) NAVY INVESTMENTS (USD 860 MILLION) ACCOUNT FOR ABOUT

26 PERCENT OF OVERALL INVESTMENTS. THESE FUNDS ARE DEVOTED

TO:

-- THE PURCHASE OF TWO ESCORT FRIGATES OF THE CLASS ORIZZONTE

(THE OVERALL COMMITMENT UP TO 2009 IS USD 1.5 BILLION, WHILE

THE COMMITMENT FOR 2003 IS USD 155 MILLION.)

-- THE CONSTRUCTION OF THE NEW AIRCRAFT CARRIER ANDREA DORIA

(THE OVERALL COMMITMENT UP TO 2008 IS USD 1.4 BILLION, WHILE

THE COMMITMENT FOR 2003 IS USD 92 MILLION.)

-- THE INTERNATIONAL COOPERATION FOR MISSILE SYSTEMS

PAAMS-SAAM (THE OVERALL COMMITMENT UP TO 2014 IS USD 795

MILLION, WHILE THE COMMITMENT FOR 2003 IS USD 89 MILLION.)

-- THE ACQUISITION OF TWO NEW GENERATION SUBMARINES U212A

(THE OVERALL COMMITMENT UP TO 2007 IS USD 904 MILLION, WHILE

THE COMMITMENT FOR 2003 IS USD 129 MILLION.)



21. (U) ARMY INVESTMENTS (USD 832 MILLION) REPRESENT ANOTHER

25 PERCENT OF OVERALL ALLOTMENTS. THESE FUNDS ARE DEVOTED TO:

-- THE PROGRAM VCC DARDO COMBAT (THE OVERALL COMMITMENT UP TO

2004 IS USD 550 MILLION, WHILE THE COMMITMENT FOR 2003 IS USD

123.9 MILLION.)

-- THE INDUSTRIALIZATION AND PRODUCTION OF 16 HELICOPTERS

NH-90 (THE OVERALL COMMITMENT UP TO 2018 IS USD 3.35 BILLION,

UNCLASSIFIED



PAGE 03 ROME 00353 04 OF 12 291711Z

WHILE THE COMMITMENT FOR 2003 IS USD 120.8 MILLION.)

-- THE REMAINING USD 408 MILLION (12 PERCENT OF TOTAL) WILL

FINANCE INTERFORCE PROJECTS LIKE THE DEVELOPMENT OF THE JOINT

STRIKE FIGHTER (THE OVERALL COMMITMENT UP TO 2012 IS USD 1.19

BILLION, WHILE THE COMMITMENT FOR 2003 IS USD 107.3 MILLION.)



TABLE 2

SUMMARY OF NATIONAL DEFENSE BUDGET: 2002-2003

(IN BILLIONS OF USD)



FY 2002 FY 2003 %

CHG CHG VALUE



1. PERSONNEL 6.578 7.023 6.8

445

(AS % OF GDP) (0.52%) (0.54%)



2. OPERATIONS 3.589 3.647 1.6

58

(AS % OF GDP) (0.29%) (0.28%)



3. INVESTMENTS 3.499 3.357 -4.1

-142

(AS % OF GDP) (0.28%) (0.26%)



4. TOTAL NATIONAL

DEFENSE

APPROPRIATIONS 13.666 14.027

2.6 341

UNCLASSIFIED



PAGE 04 ROME 00353 04 OF 12 291711Z

(AS % OF GDP) (1.09%) (1.07%)

(AS % OF GOV

BUDGET) (2.17%) (2.19%)



ADDENDUM:

GDP 1,253 1,305 4.1

52

GOV BUDGET 630.062 639.706

EXCHANGE RATE 1.00 1.00



SOURCE: GOVERNMENT'S 2002 BUDGET PROPOSAL (SEPTEMBER 2002).

THE 2002 DATA IS THE REVISED 2002 BUDGET.



--------------

AFGHANISTAN: OEF AND ISAF

--------------

22. (U) ON JAN 15, 2002 ITALY DEPLOYED A TASK FORCE COMPRISED

OF 450 SOLDIERS TO THE INTERNATIONAL SECURITY ASSISTANCE

FORCE (ISAF). THIS FORCE PROVIDED ISAF SITE SECURITY IN THE

KABUL AREA. ITALY IS PROVIDING THREE C-130 (TWO OPERATING

FROM ABU DHABI) AND LEASING ONE B-707, ONE AN-124, AND ONE



UNCLASSIFIED



UNCLASSIFIED PTQ1545



PAGE 01 ROME 00353 05 OF 12 291712Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9C0 291712Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7868

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 05 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 05 OF 12 291712Z

IL-76 IN SUPPORT OF ISAF. ITALY PROVIDED ITS ONLY CARRIER

BATTLE GROUP TO SUPPORT COMBAT OPERATIONS IN THE NORTH

ARABIAN SEA. IT DEPLOYED MORE THAN 13 PERCENT OF ITS ENTIRE

NAVAL FORCE FOR USE IN OEF. THE "DE LA PENNE" GROUP (ONE

DESTROYER AND ONE FRIGATE) RELIEVED THE CARRIER BATTLE GROUP

ON MARCH 15, 2002. THE ITALIAN FRIGATE "EURO" TRANSITED THE

SUEZ CANAL ON MAY 8, 2002 TO RELIEVE BOTH COMBATANTS ON

STATION. CURRENTLY THE "EURO" IS STATIONED IN THE GULF OF

OMAN WITH THE CANADIAN TG 50.04. IT TOOK PART IN THE CAPTURE

OF TWO ALLEGED AL QAEDA ELEMENTS ON JULY 13, 2002 (THE FIRST

EPISODE OF EFFECTIVE LIO IN OEF.) ITALY MOVED MORE THAN

17,000 LBS. (27 CUBIC METERS) OF SUPPLIES AND EQUIPMENT FROM

BRINDISI TO ISLAMABAD, PAKISTAN ON MARCH 19, 2002.

SUPPLIES/EQUIPMENT INCLUDED A FORKLIFT AND EQUIPMENT FROM THE

WORLD FOOD PROGRAM (WFP). ON APRIL 18, 2002, ITALIAN AIR

FORCE AIRCRAFT AND A SECURITY FORCE FROM THE CARABINIERI

TRANSPORTED FORMER AFGHANISTAN KING MOHAMMED ZAHIR SHAH AND

AIA LEADER HAMID KARZAI FROM ROME TO KABUL WITHOUT INCIDENT.



23. (U) ITALY HAS ALREADY SENT 2,700 TROOPS IN SUPPORT OF

OEF, IN DEPLOYMENTS THAT ARE NOW COMPLETED. THE GOI IS NOW

PREPARING FOR THE DEPLOYMENT OF A 1,000 MAN ALPINI TASK FORCE

INTO AFGHANISTAN IN MARCH 2003. ITALY ALSO HAS 15 PERSONNEL

DEPLOYED IN SUPPORT OF OPERATION ENDURING FREEDOM IN THE

COALITION COORDINATION CENTER (CCC) OF USCENTCOM AT MACDILL

AFB, TAMPA, FL.



24. (U) ITALY'S COMMITMENTS TO OEF AND ISAF HAVE COST IT USD

170 MILLION AND USD 80 MILLION, RESPECTIVELY. ADDITIONALLY,

ITALY HAS BEEN ACTIVE IN THE FINANCIAL WAR ON TERRORISM,

FREEZING ACCOUNTS OF INDIVIDUALS AND ENTITIES CONNECTED TO

UNCLASSIFIED



PAGE 03 ROME 00353 05 OF 12 291712Z

TERRORIST ACTIVITY. IN OCTOBER, ITALY BECAME ONLY THE SECOND

COUNTRY WHICH JOINED THE U.S. IN JOINTLY DESIGNATING ENTITIES

FOR ASSET FREEZE.



25.(U) ITALY VOLUNTEERED TO SERVE AS THE LEAD NATION IN

COORDINATING INTERNATIONAL EFFORTS TO ASSIST IN THE REFORM OF

AFGHANISTAN'S JUDICIAL SECTOR, ONE OF FIVE AREAS OF REFORM

CONTRIBUTING TO AFGHANISTAN'S LONG-TERM SECURITY. IN THIS

CAPACITY, THE GOI HAS SPONSORED A NUMBER OF MEETINGS AND

HOSTED A MAJOR INTERNATIONAL DONOR CONFERENCE DECEMBER 19-20,

AS WELL AS A SEMINAR FOR AFGHAN JURISTS DECEMBER 16-17. GOI

STAFF AT ITS KABUL EMBASSY INCREASED TO ENABLE IT TO FULFILL

THIS ROLE, AS DID THE ALLOCATION OF PERSONNEL TO THE MFA'S

AFGHANISTAN DESK. ITALIAN ASSISTANCE TO AFGHANISTAN REACHED

47.5 MILLION EURO AS OF LATE NOVEMBER.



--------------

MILITARY REFORM

--------------



26. (U) ITALY CONTINUES TO EXECUTE ITS PLAN TO ESTABLISH A

PROFESSIONAL, ALL-VOLUNTEER FORCE. THE GOI'S CURRENT TARGET

IS A FULLY PROFESSIONAL FORCE OF 190,000 (APPROXIMATELY TEN

PERCENT OF WHICH WILL BE WOMEN) BY THE END OF 2005. DEFENSE

MINISTER MARTINO HOPES TO HAVE THE PROFESSIONAL FORCE IN

PLACE BY 2004 AS A COST-SAVING MEASURE. LEGISLATION TO THAT

EFFECT WAS INTRODUCED IN THE ITALIAN PARLIAMENT IN MID-2002.



27. (U) ARMY: THE ITALIAN ARMY, WHICH CONSISTED OF

APPROXIMATELY 120,000 PERSONNEL IN 2002, IS UNDERGOING

SIGNIFICANT CHANGE AS IT STRIVES TO COMPLETE ITS TRANSITION

UNCLASSIFIED



PAGE 04 ROME 00353 05 OF 12 291712Z

TO A SMALLER, MORE DEPLOYABLE, AND COMPLETELY PROFESSIONAL

FORCE. APPROXIMATELY 60,000 CONSCRIPTS REMAIN IN SERVICE AS

THE ARMY DOWNSIZES TO 112,000 VOLUNTEERS BY THE END OF 2005.

WHILE 13 BRIGADES ARE STILL LISTED AS COMPRISING THE BULK OF

FORCES, ONLY TEN BRIGADES WILL BE AVAILABLE IN THE FINAL

STRUCTURE FOR CRISIS REACTION OR HOMELAND DEFENSE MISSIONS.

THESE BRIGADES ARE EMPLOYED MUCH LIKE THE US ARMY'S

DIVISIONS. THEY ARE ALL ASSIGNED NATO MISSIONS AND MANY

COULD ALSO BE USED BY THE EU. A LITTLE OVER 6,500 ARMY

PERSONNEL ARE DEPLOYED OVERSEAS, MOSTLY IN THE BALKANS, AND

AFGHANISTAN. MAJOR ISSUES ARE: THE EXPANDING NUMBER OF

PEACEKEEPING AND OTHER TYPES OF MULTINATIONAL OPERATIONS, THE

COMPLETE INTEGRATION OF WOMEN INTO MOST OF THE UNITS, AND

ASSURING SUFFICIENT PERSONNEL ARE RECRUITED IN THE COMING

YEARS. IF THE CURRENT PACE OF RECRUITMENT CONTINUES, THE

ARMY MAY BE SHORT 15,000 PERSONNEL IN 2006. THIS SHORTFALL

DOES NOT APPEAR TO UPSET THE CURRENT LEADERSHIP, AS IT WILL

ALLOW FOR A MORE GRADUAL INCREASE IN PROFESSIONAL SOLDIERS.

MEANWHILE, THE ITALIAN ARMY IS MOVING FORWARD IN IMPROVING

ITS CAPABILITIES. ITS NEWLY CREATED MULTINATIONAL CORPS

LEVEL HIGH READINESS FORCE (LAND) HEADQUARTERS WAS OFFERED TO



UNCLASSIFIED



UNCLASSIFIED PTQ1546



PAGE 01 ROME 00353 06 OF 12 291712Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9DC 291712Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7869

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 06 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 06 OF 12 291712Z

NATO AS AN ALLIED RAPID DEPLOYABLE CORPS AND UNDERWENT FULL

OPERATIONAL CAPABILITY TESTING WITH A MAJOR EXERCISE IN

DECEMBER 2002. THE ITALIAN ARMY ALSO CONTINUES TO ACQUIRE

MODERN WEAPONS AND COMBAT VEHICLES SUCH AS THE ARIETE TANK

AND THE DARDO ARMORED PERSONNEL CARRIER.



28. (U) NAVY: THE ITALIAN NAVY IS COMPRISED OF 34,000 MEN

AND WOMEN. THE MAIN COMPONENTS OF THE ITALIAN FLEET INCLUDE

ONE AIRCRAFT CARRIER (HELICOPTERS AND AV-8B SEA HARRIERS),

THREE AMPHIBIOUS SHIPS, APPROXIMATELY 25 FRIGATES/DESTROYERS,

EIGHT DIESEL SUBMARINES, 10 PATROL BOATS, AND 10

MINESWEEPERS. CONSTRUCTION HAS BEGUN ON A LARGE AMPHIBIOUS

SHIP,8 WHICH WILL BE CAPABLE OF ACTING AS A TROOP TRANSPORT

AND ALSO HAVE THE ABILITY TO OPERATE HELICOPTERS AND AV-8B

SEA HARRIERS, AND, EVENTUALLY, V/STOL JSFS. A TYPE 212

SUBMARINE CONSTRUCTION PROGRAM WILL

WILL REPLACE OLDER SUBMARINES. THE ITALIAN NAVY ALSO WANTS

TO ENHANCE ITS AMPHIBIOUS CAPABILITY TO PROJECT POWER BY

REFITTING ITS TWO LPDS, PROCURING NEW HELICOPTERS AND

ENLARGING ITS SAN MARCO NAVAL INFANTRY GROUP. IN 2002, THE

ITALIANS CONTINUED CO-PRODUCTION, WITH THE FRENCH, OF THE

HORIZON FRIGATE, A PROGRAM DESIGNED TO REPLACE SEVERAL OLDER

FRIGATES. THE ITALIANS HAVE A BILATERAL AMPHIBIOUS AGREEMENT

WITH THE SPANISH NAVY, WHICH HAS LED TO THE CREATION OF A

JOINT ITALIAN-SPANISH AMPHIBIOUS FORCE. THEY ARE ALSO

PROPOSING CREATION OF A NATO NAVAL HIGH READINESS FORCE USING

ITALIAN UNITS AS THE CENTERPIECE.



29. (U) AIR FORCE: THE ITALIAN AIR FORCE PROVIDES

SIGNIFICANT LOGISTICAL INFRASTRUCTURE SUPPORT TO THE US AND

NATO FORCES. HOWEVER, ITS ABILITY TO CONTRIBUTE DIRECTLY IN

UNCLASSIFIED



PAGE 03 ROME 00353 06 OF 12 291712Z

A FORCE-PROJECTION ROLE IS MODEST. THE PRIMARY MILITARY

LIMITATIONS TO OUT OF AREA OPERATIONS OF THE ITALIAN AIR

FORCE ARE: PROHIBITION OF THE USE OF CONSCRIPTS OVERSEAS,

LACK OF STRATEGIC LIFT, AND LACK OF ADEQUATE AIR REFUELING

SUPPORT FOR MORE THAN A HANDFUL OF AIRCRAFT. ADDITIONALLY,

IN THE SURFACE ATTACK ROLE, THERE ARE INSUFFICIENT

INVENTORIES OF PRECISION GUIDED WEAPONS TO SUSTAIN A BOMBING

CAMPAIGN OF MORE THAN A FEW DAYS. HOWEVER, SINCE THE END OF

THE GULF WAR, ITALY HAS MADE DRAMATIC GAINS IN IMPROVING ITS

CONVENTIONAL WAR FIGHTING ABILITY. ITALY HAS INCREASED ITS

PURCHASE OF PRECISION WEAPONS, SIGNED CONTRACTS TO PURCHASE

US-MADE AIR REFUELING AIRCRAFT, LEASED EX-US F-16 FALCONS (34

F-16A/B AIRCRAFT TO ARRIVE IN CY2003 FOR USE IN AUGMENTING

ITS FIGHTER INTERCEPTOR FORCE UNTIL THE EUROFIGHTER TYPHOON

COMES ON LINE,) PURCHASED 24 C-130J AIRCRAFT, MODIFIED SOME

TORNADO AIRCRAFT FOR SUPPRESSION OF ENEMY AIR DEFENSE ROLES

AND INCREASED TRAINING OF TORNADO FLIGHT CREWS IN THE

EMPLOYMENT OF LASER GUIDED MUNITIONS.



30. (U) THE EUROFIGHTER TYPHOON IS THE LARGEST PROCUREMENT

ITEM IN ITALY,S DEFENSE BUDGET. ALTHOUGH IT ENTERS SERVICE

IN 2004, IT WILL NOT REACH FULL OPERATIONAL CAPABILITY UNTIL

2007 OR 2008. UNTIL IT REACHES FULL OPERATIONAL CAPABILITY,

IT WILL NOT GREATLY INCREASE ITALY'S ABILITY TO PROVIDE AIR

SUPREMACY AND DEPLOYABILITY. AS A RESULT, A LARGE PART OF

ITALY,S AIR COMBAT POWER WILL RELY ON OBSOLETE F-104

STARFIGHTER AIRCRAFT (TO BE REPLACED BY THE EUROFIGHTER

TYPHOON) AND THE SURFACE ATTACK

AIRCRAFT, THE JOINT BRAZILIAN-ITALIAN AMX. ITALY WAS THE

SECOND FOREIGN CUSTOMER TO SIGN A CONTRACT TO HELP FUND,

DEVELOP AND MANUFACTURE THE JOINT STRIKE FIGHTER (JSF),AND

UNCLASSIFIED



PAGE 04 ROME 00353 06 OF 12 291712Z

THE SIZE OF ITS PARTICIPATION MAKES IT THE SECOND LARGEST JSF

PARTNER(AFTER THE UK). ITALY PLANS ON TAKING DELIVERY OF ITS

FIRST JSF IN 2012 AND WILL USE THE AIRCRAFT TO REPLACE ITS

AMX AND TORNADO AIRCRAFT IN THE SURFACE ATTACK ROLE AND

REPLACE ITS AV-8B,S ONBOARD THE CARRIER GARIBALDI AND ITS

SUCCESSOR. WITH ITALY,S REPLACEMENT OF THE F-104 BY THE

TYPHOON AND THE REPLACEMENT OF THE AMX WITH THE JOINT STRIKE

FIGHTER, ITS EMPLOYABLE COMBAT POWER WILL SIGNIFICANTLY

INCREASE.



31. (U) CARABINIERI: THE CARABINIERI ARE, TECHNICALLY, THE

FOURTH ELEMENT OF THE ITALIAN ARMED FORCES, AND REPORT TO THE

MINISTER OF DEFENSE. WHILE MOST CARABINIERI RESPONSIBILITIES

ARE FOR DOMESTIC SECURITY AND POLICE, CARABINIERI FORCES PLAY

A LEADING ROLE IN MSU OPERATIONS IN THE BALKANS, AFGHANISTAN,

AND ARE IN MANY RESPECTS THE MODEL FOR INTERNATIONAL FORCES

BRIDGING THE GAP BETWEEN MILITARY PEACEKEEPING AND CIVILIAN

POLICING FUNCTIONS. ADDITIONALLY, PURSUANT TO A

LONG-STANDING AGREEMENT WITH THE US ARMY, ITALY PROVIDES TWO

CARABINIERI COMPANIES ON A FULL-TIME BASIS TO THE US ARMY'S

SOUTHERN EUROPEAN TASK FORCE TO ASSIST IN FORCE PROTECTION



UNCLASSIFIED



UNCLASSIFIED PTQ1547



PAGE 01 ROME 00353 07 OF 12 291713Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9F0 291713Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7870

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 07 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 07 OF 12 291713Z

AND LAW ENFORCEMENT ON BASES USED BY THE US ARMY IN ITALY.



--------------

ITALY'S CONTRIBUTION TO THE COMMON DEFENSE

--------------

HOST NATION SUPPORT:



32. (U) -- ITALY PROVIDES FOR USG USE OF SEVEN PRINCIPAL

MILITARY BASES AND NUMEROUS SMALLER LOCATIONS, ALL ON A

NO-FEE BASIS, A UNIQUELY ADVANTAGEOUS ARRANGEMENT FOR THE US

DEFENSE BUDGET. THESE STRATEGICALLY LOCATED INSTALLATIONS

PERMIT A FORMIDABLE US FORCE CAPABILITY VIA THREE AIRBASES,

ONE STAGING BASE, ONE LARGE AMMUNITION AND EQUIPMENT BASE AND

TWO HOMEPORTS - ONE WITH THE ONLY ATLANTIC REGION

MAINTENANCE/REPAIR TENDER SHIP PRIMARILY FOR NUCLEAR POWERED

SUBMARINES. US FLEET AND SUBMARINE OPERATIONS IN THE

MEDITERRANEAN WOULD BE SERIOUSLY HAMPERED WITHOUT THIS

CAPABILITY.

-- ITALIAN CIVIL AND MILITARY SECURITY FORCES PROVIDE

INVALUABLE ANTI-TERRORIST PROTECTION TO US SHIPS TRANSITING

ITALIAN PORTS AND MILITARY BASES UTILIZED BY USG ALONG WITH

ARMED CARABINIERI SECURITY OF SENIOR US OFFICERS STATIONED OR

TRANSITING ITALY AND OTHER DIGNITARIES, AS NECESSARY.

-- A ROBUST TELECOMMUNICATIONS INFRASTRUCTURE ENHANCES US

MILITARY DATA AND VOICE TRANSMISSION WHILE REDUCING

REQUIREMENTS FOR US MILITARY EQUIPMENT AND PERSONNEL THROUGH

A SUSTAINED AVAILABILITY OF LEASED TELECOMMUNICATIONS

CIRCUITS.

-- HOST NATION ASSURANCES FOR SAFE LINES OF COMMUNICATIONS

(AIRPORTS, SEA PORTS, RAILWAYS, HIGHWAYS, AIR ROUTES)

FACILITATE THE SURGE OF US MILITARY PERSONNEL AND EQUIPMENT

UNCLASSIFIED



PAGE 03 ROME 00353 07 OF 12 291713Z

DURING TIMES OF CRISIS OR CONFLICT THROUGH THREE SHARED

CIVILIAN/MILITARY AIRFIELDS WITH BASING OF US AIRCRAFT.

-- UNPARALLELED AUTHORIZATION OF A US/NATO MUNITIONS STORAGE

FACILITIES ON ITALIAN SOIL PERMITS INVALUABLE SOURCE FOR A

PRE-POSITIONED STAGING MUNITIONS CAPABILITY TO EXERCISES AND

CONTINGENCIES INCLUDING THE WAR ON TERRORISM.

-- CONVENIENT ACCESS TO MILITARY TRAINING AND EXERCISE RANGES

ALLOWS THE US MILITARY TO CONDUCT INDISPENSABLE LAND MANEUVER

EXERCISES, LIVE-FIRE TRAINING, PARACHUTING, AND AIR TRAINING

ACTIVITIES.

-- NO-COST LOAN OF 16 ITALIAN ARMY "CENTAURO" WHEELED ARMORED

VEHICLES TO THE US ARMY SIGNIFICANTLY AIDED THE

TRANSFORMATION OF NEW INTERIM BRIGADE COMBAT TEAMS TO DEVELOP

OPERATIONAL CONCEPTS, TACTICS AND PROCEDURES FOR A MOBILE GUN

SYSTEM.

-- ITALY HAS BEEN VERY RESPONSIVE TO SECURITY CONCERNS AS

EXEMPLIFIED WITH A 10-20 PERCENT INCREASE OF ARMED FORCES TO

SUPPLEMENT US AND CONTRACT GUARD PERSONNEL RESPONSIBLE FOR

PERIMETER SECURITY OF US/NATO-UTILIZED INSTALLATIONS.

-- PROVIDED ADDITIONAL VALUABLE LAND IN SUPPORT OF THE F-16

BEDDOWN AT AVIANO AIR BASE.

DEFENSE SPENDING:



33. (U) -- ITALIAN CONTRIBUTION TO BILATERAL AND MULTILATERAL

COOPERATIVE PROGRAMS FOR THE DEVELOPMENT OF NEW WEAPON

SYSTEMS HAS BEEN NOTHING SHORT OF OUTSTANDING. THEIR

PARTICIPATION REDUCES UNIT COSTS WHILE BOLSTERING A VITAL US

DEFENSE INDUSTRIAL BASE AS EXEMPLIFIED THROUGH THE JOINT

STRIKE FIGHTER PROGRAM (JSF),MEDIUM EXTENDED AIR DEFENSE

SYSTEM, MINI-INFORMATION DISTRIBUTION SYSTEM, F-16 FIGHTER

AIRCRAFT LEASE, LIGHTWEIGHT 155MM HOWITZER DEVELOPMENT, AND

UNCLASSIFIED



PAGE 04 ROME 00353 07 OF 12 291713Z

SEVERAL MISSILE UPGRADE PROGRAMS.

-- DIRECT PROCUREMENT OF US MANUFACTURED MAJOR DEFENSE

EQUIPMENT PROMOTES AMERICAN PRODUCTS AND INTEROPERABILITY

WHILE LENGTHENING AVAILABILITY OF PRODUCTION LINES AND

PRESERVING A US INDUSTRIAL BASE AS DEMONSTRATED THROUGH THE

PURCHASE OF 200 LOCKHEED-MARTIN JSF AIRCRAFT, FIVE GENERAL

ATOMICS PREDATOR UNMANNED ARIEL VEHICLES, AND LARGE-SCALE

PURCHASES OF FIVE TYPES OF RAYTHEON MISSILES.

-- ITALY AGGRESSIVELY PROCURES US-BASED TRAINING VALUED AT

OVER 60 MILLION DOLLARS PER YEAR IN ORDER TO TRAIN ITS

MILITARY PERSONNEL. THIS IMMENSE EXPENDITURE SUBSIDIZES

OPERATING COSTS AND HELPS SUSTAIN US MILITARY ACADEMIC

INSTITUTIONS.



ROLES AND MISSIONS:



34. (U) -- INVALUABLE PRODUCT SHARING OF ITALIAN MILITARY

INTELLIGENCE WITH US COUNTERPARTS CONSTITUTES A NOTEWORTHY

PORTION OF THE INTELLIGENCE COLLECTION AND ANALYSIS WORKLOAD

ESSENTIAL TO MAINTAINING FULL COVERAGE OF THE MEDITERRANEAN

REGION.



UNCLASSIFIED



UNCLASSIFIED PTQ1549



PAGE 01 ROME 00353 08 OF 12 291713Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9FE 291713Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7871

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 08 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 08 OF 12 291713Z

-- THE STRATEGIC AND PROMINENT IMPORTANCE OF THE NATO

COMBINED AIR OPERATIONS CENTER, HOSTED AND SUPPORTED BY

ITALY, AUGMENTS THE MANAGEMENT OF MILITARY AIR OPERATIONS IN

THE MEDITERRANEAN INCLUDING THE SENSITIVE BALKAN REGION.

-- CRUCIAL SEARCH AND RESCUE SERVICE PROVIDED BY THE ITALIAN

COAST GUARD IS REFINED THROUGH THE OPERATION OF A

SOPHISTICATED DISTRESS SIGNAL MONITORING SYSTEM THAT EXCEEDS

ICAO PROCEDURES AND MARITIME LAW AND IS RESPONSIVE TO BOTH

MILITARY AND CIVILIAN AIRCRAFT AND SHIPS.

-- THE CAPABILITY OF AN IMPRESSIVE ITALIAN AIR FORCE

SUPPRESSION ENEMY AIR DEFENSE (SEAD) SYSTEM PLAYS A VITAL

ROLE FOR THE PLANNING OF COMBINED AIR OPERATIONS AGAINST US

AND NATO ADVERSARIES.

-- ORCHESTRATION OF ITALIAN AIR OPERATIONS CREATES A

DEFENSIVE SHIELD FOR OVER 30,000 US MILITARY PERSONNEL AND

THEIR FAMILIES IN ADDITION TO PORTS, FACILITIES AND EQUIPMENT

USED FOR US MILITARY OPERATIONS.

-- DYNAMIC INTERACTION AND COOPERATION OF ITALIAN SENIOR

POLITICAL AND MILITARY LEADERS SUBSTANTIALLY REDUCES COST AND

COMPLEXITY FOR CONDUCTING US MILITARY OPERATIONS IN THE

REGION DESPITE INTERNAL CRITICISM FOR ALLOWING US/NATO

OPERATIONS ON ITALIAN SOIL.

-- EXTENSIVE CONTRIBUTIONS TO OPERATION ENDURING FREEDOM,

GENERATED THROUGH THE SUPPORT OF THE ITALIAN MINISTRY OF

DEFENSE AND PARLIAMENT, INCLUDE THE INTEGRATION AND

EMPLOYMENT OF RECONNAISSANCE, REFUELING, AND GROUND OFFENSIVE

AIRCRAFT, ARMORED, INFANTRY, AVIATION, ENGINEERING, AND

EXPLOSIVE ORDNANCE DISPOSAL TEAMS, AND A LARGE CARABINIERI

MILITARY POLICE UNIT.



DIRECT COST SHARING - MISCELLANEOUS

UNCLASSIFIED



PAGE 03 ROME 00353 08 OF 12 291713Z



35. (U) UNDER ARTICLE VIII, PARAGRAPH 5 OF THE NATO SOFA,

ITALY IS RESPONSIBLE FOR PAYING 25 PERCENT OF ALL NATO SOFA

CLAIMS ARISING OUT OF ACTS OR OMISSIONS OF DOD PERSONNEL IN

THE PERFORMANCE OF OFFICIAL DUTY. DURING CY02, ITALY'S 25

PERCENT SHARE OF ALL NATO SOFA CLAIMS PAID ON BEHALF OF THE

UNITED STATES WAS APPROXIMATELY 705,000 USD. THIS FIGURE

INCLUDES ITALY'S 650,000 USD SHARE OF A 2.6 MILLION USD

JUDGMENT ENTERED IN CY02 BY AN ITALIAN COURT THAT REFLECTS

PARTIAL PAYMENT OF A PROPERTY DAMAGE CLAIM ARISING OUT OF THE

FEBRUARY 1998 USMC AIR MISHAP AT CAVALESE (CERMIS).

ADDITIONALLY, ITALY PROVIDES NATO SOFA CLAIMS ADJUDICATION

AND LITIGATION DEFENSE SERVICES IN ITALIAN COURT AT NO COST

TO THE UNITED STATES. DURING CY02, THE VALUE OF THESE

SERVICES WAS APPROXIMATELY 500,000 USD.



36. (U) PURSUANT TO A 1982 MOU BETWEEN ITALY AND THE UNITED

STATES, ITALY PERMITS DOD TO CONDUCT RADIO AND TELEVISION

BROADCASTING SERVICES TO US DOD PERSONNEL STATIONED IN ITALY.

AT PRESENT, ITALY PROVIDES 36 FREQUENCIES AT NO COST TO THE

UNITED STATES TO SUPPORT DOD'S IN-COUNTRY TERRESTRIAL

BROADCAST OPERATIONS. BASED ON QUOTES OBTAINED IN CY02 BY

DOD'S AMERICAN FORCES NETWORK SOUTH (AFNS) TO PURCHASE OR

LEASE ADDITIONAL FREQUENCIES IN CASES WHERE NEEDED

FREQUENCIES COULD NOT BE OBTAINED FROM THE ITALIAN

GOVERNMENT, WE ESTIMATE THE ANNUAL LEASE COST, ON THE OPEN

MARKET, FOR AFNS'S EXISTING 36 FREQUENCIES WOULD BE 2.5

MILLION USD.



--------------

INDIRECT COST SHARING

UNCLASSIFIED



PAGE 04 ROME 00353 08 OF 12 291713Z

--------------

FOREGONE RENT:



37. (U) -- RECOGNITION OF ITALY,S CONTRIBUTION TO COMMON

DEFENSE IS BEST ILLUSTRATED THROUGH NO-COST SAVINGS FOR THE

RENTAL OR LEASE PROPERTY TO US FORCES, UTILIZATION OF FIXED

STRUCTURES, UTILITY CONNECTIONS TO BASE PERIMETERS (ALTHOUGH

THE US PAYS LOCAL ACCESS FEES,) EXTERNAL SECURITY FOR

INSTALLATIONS, AND TRAINING RANGES.

-- USG COST SAVINGS OF RENTAL OR LEASE OF PROPERTY ARE

MAXIMIZED THROUGH CLOSE COORDINATION AND COOPERATION OF

US/GOI MIXED COMMISSION BOARD.

-- HIGHLIGHTS OF NO-COST SAVINGS BENEFITS ARE REFLECTED

THROUGH A FAIR MARKET VALUE COMPARISON OF SIMILAR PROPERTIES

SOLD IN 2002. USING THIS COMPARISON, THE USG SAVED A TOTAL

OF ABOUT 8.8 MILLION DOLLARS IN 2002 IN FOREGONE RENT.

-- NO-COST SAVINGS ARE FURTHER BROKEN DOWN INTO RESPECTIVE

MILITARY SERVICES TO ACCOUNT FOR THE TREMENDOUS BENEFIT:

USNAVEUR HAS ACCESS TO 4 SITES THAT ENCOMPASS 577 ACRES OF

LAND, USAREUR UTILIZES 10 SITES COMPRISED OF 3,184 ACRES, AND

USAFE HAS ACCESS TO 20 SITES CONSISTING OF OVER 250 ACRES.



UNCLASSIFIED



UNCLASSIFIED PTQ1550



PAGE 01 ROME 00353 09 OF 12 291713Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DAA0C 291714Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7872

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 09 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 09 OF 12 291713Z

THE COST OF EACH ACRE OF LAND VARIES DEPENDING ON AGRICULTURE

OR COMMERCIAL UTILIZATION.

-- DURING RECENT BOMBING CAMPAIGNS, ITALY CLOSED TWO CIVILIAN

AIRPORTS TO COMMERCIAL TRAFFIC AND SUSPENDED MOST COMMERCIAL

FISHING IN THE ADRIATIC SEA IN ORDER TO SUPPORT USG/NATO

INTERESTS. GOI SUBSIDIZED THE COMMERCIAL FISHING AND AIRLINE

INDUSTRIES FOR THEIR LOSS IN REVENUE.



TAX CONCESSIONS/CUSTOMS/TOLLS/DUTY:



38. (U) ITALY'S MOST IMPORTANT BURDENSHARING CONTRIBUTION IN

THIS CATEGORY IS EXEMPTION FROM ITALY'S VALUE ADDED TAX (VAT,

KNOWN IN ITALY AS IVA) ON THE COST OF GOODS AND SERVICES

PROCURED BY THE U.S. FORCES IN ITALY FOR

OFFICIAL/INSTITUTIONAL PURPOSES. WITHOUT SUCH RELIEF THE IVA

TAX RATE WOULD BE 20 PERCENT ON THE VAST MAJORITY OF

PURCHASES MADE BY DOD IN ITALY. THERE IS ALSO COMPLETE

RELIEF FROM THE 10-40 PERCENT CUSTOMS DUTY ON PROPERTY DOD

IMPORTS INTO ITALY FOR OFFICIAL/INSTITUTIONAL PURCHASES,

INCLUDING PERSONAL PROPERTY DOD PERSONNEL SHIP UNDER DOD

TRAVEL ORDERS WHEN ENTERING COUNTRY ON PCS OR TDY/TAD.

ADDITIONALLY, APPROXIMATELY 220 MILLION USD OF GOODS AND

SERVICES ARE SOLD IN ITALY EACH YEAR TO ELIGIBLE PATRONS OF

DOD'S COMMISSARIES AND EXCHANGES FREE FROM IVA AND CUSTOMS

DUTIES. ADDITIONALLY, ITALY AND THE UNITED STATES HAVE A

LONG-STANDING DIPLOMATIC AGREEMENT THAT ALLOWS RATIONED

TAX-FREE SALES OF GASOLINE, MOTOR OIL, DIESEL FUEL, AND

CERTAIN OTHER PETROLEUM PRODUCTS TO ELIGIBLE U.S. DOD

PERSONNEL FOR USE IN THEIR PRIVATELY-OWNED MOTOR VEHICLES AND

IN THEIR HOMES.



UNCLASSIFIED



PAGE 03 ROME 00353 09 OF 12 291713Z

39. (U) OTHER FORMS OF TAX RELIEF PROVIDED BY ITALY TO THE

U.S. FORCES AND DOD PERSONNEL STATIONED IN ITALY INCLUDE: (1)

FULL EXEMPTION FROM PORT FEES FOR DOD GOODS LOADED OR

OFF-LOADED ON AT ITALIAN MILITARY AND CIVILIAN PORTS, (2)

FULL RELIEF FROM ITALY'S VEHICLE CIRCULATION TAX ("ROAD TAX")

FOR ALL DOD OFFICIAL VEHICLES AND THE FIRST PRIVATELY-OWNED

VEHICLE OWNED BY A DOD MILITARY MEMBER OR DOD CIVILIAN

EMPLOYEE, THE COST WHICH AVERAGES 300 USD PER VEHICLE, AND

(3) FULL RELIEF FROM ITALY'S AUTOMOBILE INSURANCE TAX ON THE

FIRST PRIVATELY-OWNED VEHICLE OWNED BY A DOD MILITARY MEMBER

OR DOD CIVILIAN EMPLOYEE, THE COST WHICH AVERAGES 80 USD FOR

EACH DOD MEMBER WHO HAD ONE OR MORE POVS REGISTERED UNDER THE

"ALLIED FORCES ITALY" REGISTRATION SYSTEM.



40. (U) SUMMARY OF ESTIMATED ITALIAN TAXES/CUSTOMS/DUTY

CONCESSIONS FOR CY02 FOLLOWS, IN USD MILLIONS



1. OFFICIAL PURCHASES OF GOODS, SERVICES, MATERIALS

AND SUPPLIES: 100



2. OFFICIAL IMPORT EXEMPTIONS: 100



3. POL PURCHASES (OFFICIAL AND PERSONAL): 100



4. TOLLS: 0



5. VALUE ADDED TAXES AND CUSTOMS DUTIES

ON PERSONAL PURCHASES: 75



6. POSTAL: 0



UNCLASSIFIED



PAGE 04 ROME 00353 09 OF 12 291713Z



7. UTILITIES: 8.5



8. TELECOMMUNICATIONS: 0



--------------

GRANT AID

--------------

41. (U) WHEN COMPARING G8 MEMBER COUNTRIES' AID CONTRIBUTIONS

AS A PERCENTAGE OF GDP, ITALY RANKS NEXT TO LAST (THE U.S.

RANKS LAST,) AT 0.1 PERCENT. ITALY GIVES LESS THAN THE AGREED

OECD AVERAGE OF 0.24 PERCENT OF GDP. DESPITE OFFICIAL

STATEMENT OF THE INCREASE TO 0.7 PERCENT OF GDP IT IS

UNREALISTIC TO EXPECT THAT ITALY WILL EVER BE ABLE TO KEEP UP

WITH THE NORTHERN EUROPEAN COUNTRIES, WHICH MEET AND EXCEED

OECD TARGETS. ITALY,S LIMITED FOREIGN ECONOMIC ASSISTANCE

PROGRAM IS CONSEQUENTLY TARGETED AT A FEW KEY REGIONS.



42. (U) ITALIAN PRIORITIES HAVE BEEN STABLE SINCE 1995. ITALY

ASSERTS ITS NATIONAL PRIORITIES AND AGENDA WITH ITS BILATERAL



UNCLASSIFIED



UNCLASSIFIED PTQ1551



PAGE 01 ROME 00353 10 OF 12 291714Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DAA14 291714Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7873

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 10 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 10 OF 12 291714Z

ASSISTANCE PROGRAMS. BILATERAL ASSISTANCE (PROVIDED BY THE

MINISTRIES OF FOREIGN AFFAIRS AND TREASURY) FOR 2002 (REVISED

BUDGET) WAS USD 475 MILLION, BUT THE 2003 BUDGET CALLS FOR A

2.7 PERCENT INCREASE TO USD 488 MILLION, 0.1 PERCENT OF TOTAL

GOVERNMENT SPENDING, THE SAME PERCENTAGE OF 2000 AND 2001.



43. (U) ITALY PREFERS, WHEN POSSIBLE, TO WORK THROUGH

MULTILATERAL INSTITUTIONS TO MANAGE ASSISTANCE PROGRAMS,

RATHER THAN SELF-MANAGE AS USAID DOES. ITALIAN BILATERAL

ASSISTANCE IS ALWAYS IN THE FORM OF PROJECTS, RATHER THAN

BALANCE OF PAYMENTS FINANCING OR CASH. ITALY RARELY FUNDS AN

INFRASTRUCTURE PROJECT, AND IS MOSTLY INTERESTED IN

ENVIRONMENT, AGRICULTURE, AND EDUCATION. RECIPIENT COUNTRIES

PROPOSE PROJECTS, WHICH ARE THEN CONSIDERED BY THE FOREIGN

MINISTRY FOR FUNDING. ON THE GROUND, ITALIAN AID WORKERS

COLLABORATE (WHICH DOES NOT IMPLY THEY ALWAYS AGREE) WITH

THEIR COUNTERPARTS FROM OTHER COUNTRIES TO ENSURE THAT

OVERALL AID PROJECTS WORK WELL. IN ROUGHLY TWENTY RECIPIENT

COUNTRIES OF BILATERAL ASSISTANCE, ITALY USES 'TECHNICAL

LOCAL UNITS' WHICH CONSIST OF ONE OR TWO ITALIANS AND OTHER

LOCAL STAFF. THESE UNITS ARE HEADQUARTERED WITHIN ITALIAN

EMBASSIES ABROAD. IN OTHER COUNTRIES, PROGRAMS ARE OVERSEEN

DIRECTLY BY THE EMBASSY, WITHOUT THE HELP OF A TECHNICAL

LOCAL UNIT.



44. (U) FOLLOWING THE MONTERREY CONFERENCE IN JULY IN THE

2003-2006 BUDGET PLANNING DOCUMENT THE GOI TOOK THE

COMMITMENT TO INCREASE THROUGH 2003 THE AID/GDP RATIO TO 0.33

PERCENT. THIS COMMITMENT, LIKE THAT ON DEFENSE, CONFLICTS

WITH THE CONSTRAINTS RELATED TO THE CRITICAL BUDGET SITUATION.



UNCLASSIFIED



PAGE 03 ROME 00353 10 OF 12 291714Z

TABLE 3

ITALY'S SPENDING FOR BILATERAL ASSISTANCE: 2002-2003

BY GOVERNMENT SOURCE

(IN MILLIONS OF USD UNLESS OTHERWISE INDICATED)



FY 2002 FY 2003 %

CHG CHG VALUE



1. MINISTRY OF 455 488

7.4 33

FOREIGN AFFAIRS



COOPERATION FOR 454 487 7.4

33

DEVELOPMENT OF

WHICH:

-- AID TO LESS 452 486

7.4 34

DEVELOPED

COUNTRIES (LDC)

-- HUMANITARIAN 1 1 -

-

ASSISTANCE

2. MINISTRY OF 20 0

-100.0 -20

TREASURY



3. TOTAL 475 488

2.7 13

(% OF GOV BUDGET) (0.1%) (0.1%)



UNCLASSIFIED



PAGE 04 ROME 00353 10 OF 12 291714Z

4. ADDENDUM:

GOV BUDGET 630,062 639,706

EXCHANGE RATE 1.00 1.00



SOURCE: GOI'S 2003 PROPOSED BUDGET.



--------------

ASSISTANCE TO NATO ASPIRANT COUNTRIES

--------------



45. (U) THE MFA ECONOMIC ASSISTANCE DEPARTMENT CONFIRMED THAT

ITALIAN ECONOMIC ASSISTANCE TO NATO ASPIRANT COUNTRIES IS

LIMITED TO MACEDONIA AND ALBANIA.



--------------

MACEDONIA

--------------



46. (U) AFTER THE FIRST HUMANITARIAN AND EMERGENCY

INTERVENTION OF 1991 CAUSED BY THE FLOW OF REFUGEES FROM



UNCLASSIFIED



>

@@@OASYS@@@



UNCLASSIFIED PTQ1538



PAGE 01 ROME 00353 01 OF 12 291710Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA98B 291711Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7864

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 01 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 01 OF 12 291710Z

REF: A. 02SECSTATE 219916

B. 02ROME 06091



1. (U) THE FOLLOWING IS THE UNCLASSIFIED VERSION OF EMBASSY

ROME'S BURDENSHARING REPORT (REF B.) PLEASE NOTE THE CHANGE

IN THE ESTIMATE ON FOREGONE RENT IN PARAGRAPH 37. EMBASSY

ROME'S POC FOR THE BURDENSHARING REPORT IS POL OFFICER RAFIK

MANSOUR. HE CAN BE REACHED AT (39) 06.4674.2831 OR AT

MANSOURRK@STATE.GOV. PLEASE NOTE THAT THIS REPORT USES THE

DEC 4 OFFICIAL RATE OF EXCHANGE: EURO1 = $1.0008, ROUNDED OFF

TO EURO1 = $1.



2. (U) BEGIN TEXT.



--------------

POLITICAL SITUATION

--------------



3. (U) DOMESTIC: PM BERLUSCONI AND HIS CENTER-RIGHT

COALITION REMAIN IN FIRM CONTROL OF THE PARLIAMENT. DESPITE

CONTINUED CRITICISM FROM THE CENTER-LEFT OPPOSITION,

THIS COALITION IS LIKELY TO ENDURE THROUGH ITS FULL TERM INTO

THE

SPRING OF 2006 (THE FIRST POST-WAR ITALIAN GOVERNMENT TO DO

SO). ITS MAJORITY IN PARLIAMENT IS SUFFICIENT TO ENSURE THAT

IT CAN WIN VOTES NOT ONLY ON CONTROVERSIAL DOMESTIC ISSUES,

BUT ALSO ON FOREIGN POLICY ISSUES OF CONCERN TO THE US, SUCH

AS THE DEPLOYMENT OF ITALIAN LAND FORCES TO AFGHANISTAN.

THE PRIME MINISTER REMAINS PUBLICLY SUPPORTIVE OF U.S.

POLICY, MOST NOTABLY IN HIS STATEMENTS CONCERNING POTENTIAL

MILITARY ACTION IN IRAQ.

UNCLASSIFIED



PAGE 03 ROME 00353 01 OF 12 291710Z



4. (U) THE EU: GOI PREPARATIONS FOR ITS EU PRESIDENCY,

FROM JULY THROUGH DECEMBER 2003, BEGAN TO DOMINATE ITALY'S

FOREIGN POLICY PRIORITIES TOWARDS EUROPE WHEN THE GOVERNMENT

RETURNED TO WORK IN SEPTEMBER. ITALY IS PLAYING AN ACTIVE

ROLE IN THE EUROPEAN UNION'S ONGOING CONVENTION. WHETHER THE

PRODUCT OF THIS PROCESS IS A "CONSTITUTION" AS SOME IN THE EU

HAVE CALLED FOR, OR A LESS AMBITIOUS TREATY BASED DOCUMENT,

THE GOI AGREES WITH ALMOST ALL ITS EU PARTNERS THAT IT MUST

ADDRESS STRUCTURAL CHANGES TO THE EU'S INSTITUTIONS THAT WILL

MAKE IT MORE DEMOCRATIC AND EFFICIENT, ESPECIALLY IN LIGHT OF

ENLARGEMENT. THE ITALIANS ARE HOPING TO HAVE THE CONCLUDING

SESSION OF AN INTER-GOVERNMENTAL CONFERENCE, PRESIDED OVER BY

HEADS-OF-STATE, ADOPT THE FINAL DOCUMENT BY THE END OF ITS

PRESIDENCY. ITALY IS A STRONG PROMOTER OF ESDP. NOW THAT

BERLIN PLUS (NATO/ESDP COORDINATION) ARRANGEMENTS HAVE BEEN

AGREED BETWEEN NATO AND THE EU, ITALY CAN BE EXPECTED TO BE A

MAJOR CONTRIBUTOR TO THE FIRST EU PEACEKEEPING MISSIONS IN

MACEDONIA AND (POTENTIALLY) BOSNIA.



5. (U) NATO-RUSSIA: ITALY IS A STRONG SUPPORTER OF

IMPROVED NATO-RUSSIA TIES. PM BERLUSCONI WAS THE MAIN DRIVER

BEHIND THE MAY 27-28 NATO-RUSSIA ROME SUMMIT WHICH

ESTABLISHED THE NATO-RUSSIA COUNCIL. HE IS AN ACTIVE

BOOSTER OF RUSSIA'S RAPPROCHEMENT WITH THE WEST. ITALY PLAYS

AN ACTIVE ROLE --

IN PARTNERSHIP WITH THE US AND OTHER KEY ALLIES -- IN

SUPPORTING FINANCIALLY THE DESTRUCTION OF RUSSIAN CW, AND IS

WEIGHING PROVISION OF SIMILAR SUPPORT FOR THE DECOMMISSIONING

OF RUSSIAN NUCLEAR SUBMARINES.



UNCLASSIFIED



PAGE 04 ROME 00353 01 OF 12 291710Z

6. (U) "IN TOGETHER, OUT TOGETHER" ARE WELCOME WORDS TO OUR

GOI INTERLOCUTORS AT ALL

LEVELS. EUROPE, INCLUDING ITALY, IS TAKING MORE

RESPONSIBILITY FOR ITS OWN BACKYARD BY TAKING OVER POLICING

FUNCTIONS IN BOSNIA POST IPTF. AS NOTED ABOVE, ITALY WILL BE

A KEY CONTRIBUTOR TO THE FOLLOW-ON MISSION TO NATO'S TASK

FORCE FOX. THE GOI CONTINUES TO PARTICIPATE IN SFOR AND KFOR

(INCLUDING ANOTHER KFOR COMMAND STARTING OCTOBER 2002.)

ITALY IS ALBANIA'S "BIGGEST BOOSTER," LARGEST BILATERAL

DONOR, INVESTOR, PROVIDER OF LAW ENFORCEMENT ASSISTANCE, AND

GENERAL BIG BROTHER. THIS ENGAGEMENT HELPS PROVIDE A

RELATIVELY STABLE ANCHOR IN A VOLATILE REGION.



7. (U) ITALY'S PARTICIPATION IN PFP: ITALY IS A STRONG

SUPPORTER OF THE PFP PROGRAM, WITH PARTICULAR EMPHASIS ON

IMPROVING THE CAPABILITIES AND QUALITY OF PFP COUNTRIES IN SE

EUROPE. ITALY HAS CLOSE AND EXTENSIVE TIES WITH ALBANIA,

CROATIA, ROMANIA, BULGARIA, FYROM, SLOVENIA AND SLOVAKIA AND

REGULARLY CONDUCTS BILATERAL MILITARY TALKS. DURING THE

CURRENT ROUND OF NATO ENLARGEMENT, ITALY SOUGHT TO HAVE

ROMANIA AND BULGARIA INCLUDED AND WORKED WITH ALL OF THE SE



UNCLASSIFIED



UNCLASSIFIED PTQ1540



PAGE 01 ROME 00353 02 OF 12 291711Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA99E 291711Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7865

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 02 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 02 OF 12 291711Z

EUROPEAN CANDIDATE COUNTRIES ON ECONOMIC, POLITICAL AND

MILITARY REFORMS TO RAISE THEIR CAPABILITIES IN ORDER TO

QUALIFY FOR MEMBERSHIP.



8. (U) THE GOI HAS SPONSORED MILITARY EXCHANGES ON ISSUES

SUCH AS INTELLIGENCE SHARING, COMMUNICATIONS AND LOGISTICS

PLANNING, PORT VISITS AND EXERCISES, TRAINING SEMINARS, AND

CONSULTATIONS WITH PFP COUNTRIES AND HAS PROMOTED COOPERATION

ON DEFENSE ACQUISITION. ITALY HAS ALSO INVESTIGATED TRAINING

OPPORTUNITIES BETWEEN THE ITALIAN CARABINIERI AND MILITARY

POLICE UNITS IN LATVIA, ESTONIA, ROMANIA AND BULGARIA, AND

BETWEEN ITALIAN ALPINI TROOPS AND MOUNTAIN UNITS FROM

MACEDONIA, SLOVENIA, AND ROMANIA. ITALIAN DIVERS AND

PARACHUTISTS HAVE TRAINED WITH BULGARIAN AND ROMANIAN UNITS

AS WELL.



9. (U) NATO MED DIALOGUE: ITALY IS ALSO DEDICATED TO

BREATHING LIFE INTO NATO'S MEDITERRANEAN DIALOGUE. PM

BERLUSCONI HAS INDICATED THAT STRENGTHENING THE DIALOGUE WILL

BE A GOI PRIORITY DURING ITALY'S EU PRESIDENCY IN 2003.



10. (U) NATO ENLARGEMENT: ALL THROUGHOUT 2002, ITALY HAS BEEN

IN FAVOR OF A ROBUST NATO ENLARGEMENT, PARTICULARLY AFTER

RUSSIAN CONCERNS ABOUT ENLARGEMENT WERE ADDRESSED. THE

ITALIANS FAVORED A "BALANCED ENLARGEMENT" OF NATO, ONE THAT

WOULD INCLUDE ROMANIA AND BULGARIA. ON DECEMBER 11, IN THE

PLENARY SESSION OF THE SOUTHEAST EUROPEAN DEFENSE MINISTERS,

MINISTER MARTINO EMPHASIZED THE IMPORTANCE OF ALBANIA,

CROATIA, AND MACEDONIA SEIZING THE OPPORTUNITY OF FUTURE NATO

MEMBERSHIP TO ACCELERATE THEIR DEFENSE REFORMS AND REGIONAL

COOPERATION AND PLEDGED DIRECT ITALIAN ASSISTANCE FOR THEIR

UNCLASSIFIED



PAGE 03 ROME 00353 02 OF 12 291711Z

EFFORTS.



11. (U) OEF: ITALY WAS ONE OF THE FIRST ALLIES TO OFFER

MILITARY ASSETS FOR OPERATION ENDURING FREEDOM. THE GOI

OFFERED A SUBSTANTIAL PACKAGE CONSISTING OF HER SOLE AIRCRAFT

CARRIER, 8 HARRIER AIRCRAFT, EIGHT HELICOPTERS, TWO FRIGATES,

A SUPPLY SHIP, 8 TORNADO AIRCRAFT, AN NBC UNIT, SIX EOD

TEAMS, ONE ENGINEER UNIT, AND AN ARMOURED REGIMENT WITH

EQUIPMENT. NOT ALL ASSETS WERE CALLED UPON, HOWEVER THE

AIRCRAFT CARRIER AND FRIGATES WERE AMONG THOSE THAT OPERATED

IN THEATER FOR SEVERAL MONTHS. ITALY'S PARLIAMENT VOTED

OVERWHELMINGLY IN NOVEMBER 2001 TO APPROVE ITALIAN

CONTRIBUTIONS TO OEF, AND AGAIN IN OCTOBER 2002 WHEN

ADDITIONAL ASSETS WERE MADE AVAILABLE. THE GOI HAS ALSO

OFFERED TO BACKFILL US TROOPS SERVING WITH NATO MISSIONS IN

THE BALKANS AS ANOTHER MEANS OF SUPPORTING OEF.



12. (U) THE GOI RECENTLY AGREED TO OUR REQUEST TO DEPLOY A

LIGHT INFANTRY BATTALION (APPROXIMATELY 1000 SOLDIERS) TO

SERVE AS A MANEUVER FORCE IN AFGHANISTAN BEGINNING IN MARCH,

2003. AT THAT POINT, ITALY WILL BE SECOND ONLY TO THE US IN

GROUND FORCES AND TOTAL FORCES COMMITTED TO OEF. IN

ADDITION, TWO ITALIAN C-130J AIRCRAFT BEGAN OPERATING OUT OF

MANAS AIR BASE IN OCTOBER.



--------------

ECONOMIC SITUATION

--------------



13. (U) ITALY HAS THE WORLD'S SIXTH LARGEST ECONOMY WITH A

GDP OF ABOUT USD 1.3 TRILLION IN 2002. ITS GDP GROWTH, AN

UNCLASSIFIED



PAGE 04 ROME 00353 02 OF 12 291711Z

ESTIMATED 0.3 PERCENT IN 2002 AND 1.5 PERCENT IN 2003, WAS

SLIGHTLY BELOW THE AVERAGE OF THE 12 MEMBER STATES OF THE

EUROPEAN ECONOMIC AND MONETARY UNIONS (EMU).



14. (U) THE GOI PRESENTED ITS 2003 BUDGET TO PARLIAMENT ON

OCTOBER 2. REVISIONS ARE EXPECTED BEFORE PARLIAMENT APPROVES

THE BUDGET IN LATE DECEMBER. THE 2003 BUDGET TOTALS USD

639.7 BILLION (OR 49.0 PERCENT OF GDP),WITH A DEFICIT OF USD

19.6 BILLION (OR 1.5 PERCENT OF GDP.) A PACKAGE OF USD 20

BILLION (OR 1.5 PERCENT OF GDP) IN SPENDING CUTS IS PARTLY

OFFSET BY A STIMULUS PACKAGE OF USD 7.5 BILLION (OR 0.4

PERCENT OF GDP) IN TAX CUTS AND INVESTMENTS IN

INFRASTRUCTURE. DEFENSE MINISTRY SPENDING CUTS WILL NOT

REQUIRE CUTS IN SPENDING ON PURCHASES OF U.S. EQUIPMENT,

ACCORDING TO DEPUTY FINANCE MINISTER BALDASSARRI AND FINANCE

UNDER SECRETARY TANZI.



15. (SBU) THE GOI HAD HOPED TO HAVE SERIOUS ECONOMIC REFORMS

IN PLACE BY NOW. FINANCE MINISTER TREMONTI'S PROGRAM CALLED

FOR IMPLEMENTATION OF MAJOR TAX REFORM IN 2002 AND PENSION

REFORM SOON AFTERWARD. THE CONTINUED GLOBAL DOWNTURN,



UNCLASSIFIED



UNCLASSIFIED PTQ1541



PAGE 01 ROME 00353 03 OF 12 291711Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9A1 291711Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7866

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 03 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 03 OF 12 291711Z

COMBINED WITH CONCERN THAT POSSIBLE ACTION IN IRAQ COULD DRAG

THE WORLD ECONOMY DOWN EVEN FURTHER, HAS COMPLICATED MATTERS.

TAX REVENUES ARE DOWN SUBSTANTIALLY, WHILE THE GOI HAS FOUND

IT VIRTUALLY IMPOSSIBLE TO CUT SPENDING.



16. (SBU) THE 2003 BUDGET IS THEREFORE A DIFFICULT

COMPROMISE. FINANCE MINISTER TREMONTI IS SEEKING TO COMBINE

FISCAL STIMULUS (TO AVOID A FURTHER SERIOUS DOWNTURN) WITH

SMALL CUTS IN CENTRAL GOVERNMENT SPENDING AND POLITICALLY

DIFFICULT CAPS ON REGIONAL AND MUNICIPAL SPENDING. THE FACT

THAT THIS BUDGET PLEASES ALMOST NO ONE MAY BE THE BEST

ARGUMENT THAT THE PAIN IS FAIRLY DISTRIBUTED.



--------------

DEFENSE POLICY/DEFENSE SPENDING

--------------



17. (U) FIGURES REGARDING THE PROPOSED ITALIAN DEFENSE BUDGET

HAVE BEEN PUBLISHED IN THE OFFICIAL DOCUMENTS TRANSMITTED BY

GOI TO THE PARLIAMENT ON OCTOBER 2. THE TOTAL MOD FUNDING

REQUEST FOR FY 2003 IS USD 19.61 BILLION, UP 3.1 PERCENT (OR

USD 590 MILLION) FROM THE MOD REQUEST FOR FY 2002. IN OTHER

TERMS, 2003 MOD APPROPRIATIONS AMOUNT TO 1.5% OF THE GDP,

COMPARED TO 1.52% OF 2002. THE DRAFT 2003 MOD BUDGET

PROVIDES A 3.1 PERCENT INCREASE, BUT ASSUMING A 1.9 PERCENT

INFLATION RATE IN 2003, THIS FIGURE REPRESENTS A MODEST

INCREASE IN REAL TERMS OVER 2002.



TABLE 1

SUMMARY OF MOD BUDGET: 2002-2003

UNCLASSIFIED



PAGE 03 ROME 00353 03 OF 12 291711Z

(IN BILLIONS OF USD)



FY 2002 FY 2003

%CHG CHG VALUE



1. NATIONAL DEFENSE 13.666 14.027

2.6 362

(AS % OF GDP) (1.09%) (1.07%)



2. DOMESTIC SECURITY

(CARABINIERI) 4.264 4.565 7.1

301

(AS % OF GDP) (0.34%) (0.35%)



3. OTHER 1.097 1.023 -6.7

-74

(AS % OF GDP) (0.1%) (0.35%)



4. TOTAL MOD

APPROPRIATIONS 19.025 19.615

3.1 590

(AS % OF GDP) (1.52%) (1.50%)

(AS % OF GOV BUDGET) (3.02%) (3.07%)



ADDENDUM:

GDP (1) 1,253 1,305 4.1

52

GOV BUDGET 630.062 639.706

UNCLASSIFIED



PAGE 04 ROME 00353 03 OF 12 291711Z

EXCHANGE RATE 1.00 1.00

SOURCE: GOVERNMENT'S 2003 BUDGET PROPOSAL (SEPTEMBER 2002).



18. (U) DEFENSE FUNCTION INCLUDES THE BUDGETS OF THE ARMY,

NAVY AND AIR FORCE AND EXCLUDES DOMESTIC SECURITY

(CARABINIERI) AND OTHER NON-ESSENTIAL MOD FUNCTIONS. THE

DEFENSE FUNCTION BUDGET FOR 2003 IS USD 14.03 BILLION, UP

2.6% OR USD 362 MILLION FROM 2002 AND IS MOSTLY DESIGNED TO

ASSURE THE CONTINUATION OF THE STRUCTURAL REFORM OF ARMED

FORCES (PERSONNEL AND OPERATIVE SPENDING) AND DEFENSE

MODERNIZATION PROJECTS (INVESTMENTS.) THE OPTIMAL

DISTRIBUTION OF DEFENSE FUNCTION SPENDING IS 70 PERCENT FOR

THE FUNCTIONING OF DEFENSE AND 30 PERCENT FOR DEFENSE

MODERNIZATION. THE 2003 BUDGET DEVOTES 76.1 PERCENT OF

OVERALL DEFENSE FUNCTION SPENDING FOR DEFENSE OPERATIONS

(74.4 PERCENT IN 2002 BUDGET) AND ONLY 23.9 PERCENT FOR

INVESTMENTS (25.6 PERCENT IN THE 2002 BUDGET.)



19. (U) AIR FORCE INVESTMENTS (USD 1,256 MILLION) ACCOUNT FOR

ALMOST FORTY PERCENT OF OVERALL ALLOTMENTS. THESE FUNDS ARE



UNCLASSIFIED



UNCLASSIFIED PTQ1543



PAGE 01 ROME 00353 04 OF 12 291711Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9B1 291712Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7867

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 04 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 04 OF 12 291711Z

RELATED TO THE DEVELOPMENT OF THE EUROFIGHTER (THE OVERALL

COMMITMENT UP TO 2015 IS USD 18.1 BILLION, WHILE THE

COMMITMENT FOR 2003 IS USD 564 MILLION,) THE CONTINUATION OF

THE LEASING CONTACT OF THE TORNADO (THE OVERALL COMMITMENT UP

TO 2015 IS USD 1.2 BILLION, WHILE THE COMMITMENT FOR 2003 IS

USD 181.2 MILLION) AND FOR THE PURCHASE OF TRANSPORT

AIRCRAFT.



20. (U) NAVY INVESTMENTS (USD 860 MILLION) ACCOUNT FOR ABOUT

26 PERCENT OF OVERALL INVESTMENTS. THESE FUNDS ARE DEVOTED

TO:

-- THE PURCHASE OF TWO ESCORT FRIGATES OF THE CLASS ORIZZONTE

(THE OVERALL COMMITMENT UP TO 2009 IS USD 1.5 BILLION, WHILE

THE COMMITMENT FOR 2003 IS USD 155 MILLION.)

-- THE CONSTRUCTION OF THE NEW AIRCRAFT CARRIER ANDREA DORIA

(THE OVERALL COMMITMENT UP TO 2008 IS USD 1.4 BILLION, WHILE

THE COMMITMENT FOR 2003 IS USD 92 MILLION.)

-- THE INTERNATIONAL COOPERATION FOR MISSILE SYSTEMS

PAAMS-SAAM (THE OVERALL COMMITMENT UP TO 2014 IS USD 795

MILLION, WHILE THE COMMITMENT FOR 2003 IS USD 89 MILLION.)

-- THE ACQUISITION OF TWO NEW GENERATION SUBMARINES U212A

(THE OVERALL COMMITMENT UP TO 2007 IS USD 904 MILLION, WHILE

THE COMMITMENT FOR 2003 IS USD 129 MILLION.)



21. (U) ARMY INVESTMENTS (USD 832 MILLION) REPRESENT ANOTHER

25 PERCENT OF OVERALL ALLOTMENTS. THESE FUNDS ARE DEVOTED TO:

-- THE PROGRAM VCC DARDO COMBAT (THE OVERALL COMMITMENT UP TO

2004 IS USD 550 MILLION, WHILE THE COMMITMENT FOR 2003 IS USD

123.9 MILLION.)

-- THE INDUSTRIALIZATION AND PRODUCTION OF 16 HELICOPTERS

NH-90 (THE OVERALL COMMITMENT UP TO 2018 IS USD 3.35 BILLION,

UNCLASSIFIED



PAGE 03 ROME 00353 04 OF 12 291711Z

WHILE THE COMMITMENT FOR 2003 IS USD 120.8 MILLION.)

-- THE REMAINING USD 408 MILLION (12 PERCENT OF TOTAL) WILL

FINANCE INTERFORCE PROJECTS LIKE THE DEVELOPMENT OF THE JOINT

STRIKE FIGHTER (THE OVERALL COMMITMENT UP TO 2012 IS USD 1.19

BILLION, WHILE THE COMMITMENT FOR 2003 IS USD 107.3 MILLION.)



TABLE 2

SUMMARY OF NATIONAL DEFENSE BUDGET: 2002-2003

(IN BILLIONS OF USD)



FY 2002 FY 2003 %

CHG CHG VALUE



1. PERSONNEL 6.578 7.023 6.8

445

(AS % OF GDP) (0.52%) (0.54%)



2. OPERATIONS 3.589 3.647 1.6

58

(AS % OF GDP) (0.29%) (0.28%)



3. INVESTMENTS 3.499 3.357 -4.1

-142

(AS % OF GDP) (0.28%) (0.26%)



4. TOTAL NATIONAL

DEFENSE

APPROPRIATIONS 13.666 14.027

2.6 341

UNCLASSIFIED



PAGE 04 ROME 00353 04 OF 12 291711Z

(AS % OF GDP) (1.09%) (1.07%)

(AS % OF GOV

BUDGET) (2.17%) (2.19%)



ADDENDUM:

GDP 1,253 1,305 4.1

52

GOV BUDGET 630.062 639.706

EXCHANGE RATE 1.00 1.00



SOURCE: GOVERNMENT'S 2002 BUDGET PROPOSAL (SEPTEMBER 2002).

THE 2002 DATA IS THE REVISED 2002 BUDGET.



--------------

AFGHANISTAN: OEF AND ISAF

--------------

22. (U) ON JAN 15, 2002 ITALY DEPLOYED A TASK FORCE COMPRISED

OF 450 SOLDIERS TO THE INTERNATIONAL SECURITY ASSISTANCE

FORCE (ISAF). THIS FORCE PROVIDED ISAF SITE SECURITY IN THE

KABUL AREA. ITALY IS PROVIDING THREE C-130 (TWO OPERATING

FROM ABU DHABI) AND LEASING ONE B-707, ONE AN-124, AND ONE



UNCLASSIFIED



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ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9C0 291712Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7868

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 05 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 05 OF 12 291712Z

IL-76 IN SUPPORT OF ISAF. ITALY PROVIDED ITS ONLY CARRIER

BATTLE GROUP TO SUPPORT COMBAT OPERATIONS IN THE NORTH

ARABIAN SEA. IT DEPLOYED MORE THAN 13 PERCENT OF ITS ENTIRE

NAVAL FORCE FOR USE IN OEF. THE "DE LA PENNE" GROUP (ONE

DESTROYER AND ONE FRIGATE) RELIEVED THE CARRIER BATTLE GROUP

ON MARCH 15, 2002. THE ITALIAN FRIGATE "EURO" TRANSITED THE

SUEZ CANAL ON MAY 8, 2002 TO RELIEVE BOTH COMBATANTS ON

STATION. CURRENTLY THE "EURO" IS STATIONED IN THE GULF OF

OMAN WITH THE CANADIAN TG 50.04. IT TOOK PART IN THE CAPTURE

OF TWO ALLEGED AL QAEDA ELEMENTS ON JULY 13, 2002 (THE FIRST

EPISODE OF EFFECTIVE LIO IN OEF.) ITALY MOVED MORE THAN

17,000 LBS. (27 CUBIC METERS) OF SUPPLIES AND EQUIPMENT FROM

BRINDISI TO ISLAMABAD, PAKISTAN ON MARCH 19, 2002.

SUPPLIES/EQUIPMENT INCLUDED A FORKLIFT AND EQUIPMENT FROM THE

WORLD FOOD PROGRAM (WFP). ON APRIL 18, 2002, ITALIAN AIR

FORCE AIRCRAFT AND A SECURITY FORCE FROM THE CARABINIERI

TRANSPORTED FORMER AFGHANISTAN KING MOHAMMED ZAHIR SHAH AND

AIA LEADER HAMID KARZAI FROM ROME TO KABUL WITHOUT INCIDENT.



23. (U) ITALY HAS ALREADY SENT 2,700 TROOPS IN SUPPORT OF

OEF, IN DEPLOYMENTS THAT ARE NOW COMPLETED. THE GOI IS NOW

PREPARING FOR THE DEPLOYMENT OF A 1,000 MAN ALPINI TASK FORCE

INTO AFGHANISTAN IN MARCH 2003. ITALY ALSO HAS 15 PERSONNEL

DEPLOYED IN SUPPORT OF OPERATION ENDURING FREEDOM IN THE

COALITION COORDINATION CENTER (CCC) OF USCENTCOM AT MACDILL

AFB, TAMPA, FL.



24. (U) ITALY'S COMMITMENTS TO OEF AND ISAF HAVE COST IT USD

170 MILLION AND USD 80 MILLION, RESPECTIVELY. ADDITIONALLY,

ITALY HAS BEEN ACTIVE IN THE FINANCIAL WAR ON TERRORISM,

FREEZING ACCOUNTS OF INDIVIDUALS AND ENTITIES CONNECTED TO

UNCLASSIFIED



PAGE 03 ROME 00353 05 OF 12 291712Z

TERRORIST ACTIVITY. IN OCTOBER, ITALY BECAME ONLY THE SECOND

COUNTRY WHICH JOINED THE U.S. IN JOINTLY DESIGNATING ENTITIES

FOR ASSET FREEZE.



25.(U) ITALY VOLUNTEERED TO SERVE AS THE LEAD NATION IN

COORDINATING INTERNATIONAL EFFORTS TO ASSIST IN THE REFORM OF

AFGHANISTAN'S JUDICIAL SECTOR, ONE OF FIVE AREAS OF REFORM

CONTRIBUTING TO AFGHANISTAN'S LONG-TERM SECURITY. IN THIS

CAPACITY, THE GOI HAS SPONSORED A NUMBER OF MEETINGS AND

HOSTED A MAJOR INTERNATIONAL DONOR CONFERENCE DECEMBER 19-20,

AS WELL AS A SEMINAR FOR AFGHAN JURISTS DECEMBER 16-17. GOI

STAFF AT ITS KABUL EMBASSY INCREASED TO ENABLE IT TO FULFILL

THIS ROLE, AS DID THE ALLOCATION OF PERSONNEL TO THE MFA'S

AFGHANISTAN DESK. ITALIAN ASSISTANCE TO AFGHANISTAN REACHED

47.5 MILLION EURO AS OF LATE NOVEMBER.



--------------

MILITARY REFORM

--------------



26. (U) ITALY CONTINUES TO EXECUTE ITS PLAN TO ESTABLISH A

PROFESSIONAL, ALL-VOLUNTEER FORCE. THE GOI'S CURRENT TARGET

IS A FULLY PROFESSIONAL FORCE OF 190,000 (APPROXIMATELY TEN

PERCENT OF WHICH WILL BE WOMEN) BY THE END OF 2005. DEFENSE

MINISTER MARTINO HOPES TO HAVE THE PROFESSIONAL FORCE IN

PLACE BY 2004 AS A COST-SAVING MEASURE. LEGISLATION TO THAT

EFFECT WAS INTRODUCED IN THE ITALIAN PARLIAMENT IN MID-2002.



27. (U) ARMY: THE ITALIAN ARMY, WHICH CONSISTED OF

APPROXIMATELY 120,000 PERSONNEL IN 2002, IS UNDERGOING

SIGNIFICANT CHANGE AS IT STRIVES TO COMPLETE ITS TRANSITION

UNCLASSIFIED



PAGE 04 ROME 00353 05 OF 12 291712Z

TO A SMALLER, MORE DEPLOYABLE, AND COMPLETELY PROFESSIONAL

FORCE. APPROXIMATELY 60,000 CONSCRIPTS REMAIN IN SERVICE AS

THE ARMY DOWNSIZES TO 112,000 VOLUNTEERS BY THE END OF 2005.

WHILE 13 BRIGADES ARE STILL LISTED AS COMPRISING THE BULK OF

FORCES, ONLY TEN BRIGADES WILL BE AVAILABLE IN THE FINAL

STRUCTURE FOR CRISIS REACTION OR HOMELAND DEFENSE MISSIONS.

THESE BRIGADES ARE EMPLOYED MUCH LIKE THE US ARMY'S

DIVISIONS. THEY ARE ALL ASSIGNED NATO MISSIONS AND MANY

COULD ALSO BE USED BY THE EU. A LITTLE OVER 6,500 ARMY

PERSONNEL ARE DEPLOYED OVERSEAS, MOSTLY IN THE BALKANS, AND

AFGHANISTAN. MAJOR ISSUES ARE: THE EXPANDING NUMBER OF

PEACEKEEPING AND OTHER TYPES OF MULTINATIONAL OPERATIONS, THE

COMPLETE INTEGRATION OF WOMEN INTO MOST OF THE UNITS, AND

ASSURING SUFFICIENT PERSONNEL ARE RECRUITED IN THE COMING

YEARS. IF THE CURRENT PACE OF RECRUITMENT CONTINUES, THE

ARMY MAY BE SHORT 15,000 PERSONNEL IN 2006. THIS SHORTFALL

DOES NOT APPEAR TO UPSET THE CURRENT LEADERSHIP, AS IT WILL

ALLOW FOR A MORE GRADUAL INCREASE IN PROFESSIONAL SOLDIERS.

MEANWHILE, THE ITALIAN ARMY IS MOVING FORWARD IN IMPROVING

ITS CAPABILITIES. ITS NEWLY CREATED MULTINATIONAL CORPS

LEVEL HIGH READINESS FORCE (LAND) HEADQUARTERS WAS OFFERED TO



UNCLASSIFIED



UNCLASSIFIED PTQ1546



PAGE 01 ROME 00353 06 OF 12 291712Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9DC 291712Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7869

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 06 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 06 OF 12 291712Z

NATO AS AN ALLIED RAPID DEPLOYABLE CORPS AND UNDERWENT FULL

OPERATIONAL CAPABILITY TESTING WITH A MAJOR EXERCISE IN

DECEMBER 2002. THE ITALIAN ARMY ALSO CONTINUES TO ACQUIRE

MODERN WEAPONS AND COMBAT VEHICLES SUCH AS THE ARIETE TANK

AND THE DARDO ARMORED PERSONNEL CARRIER.



28. (U) NAVY: THE ITALIAN NAVY IS COMPRISED OF 34,000 MEN

AND WOMEN. THE MAIN COMPONENTS OF THE ITALIAN FLEET INCLUDE

ONE AIRCRAFT CARRIER (HELICOPTERS AND AV-8B SEA HARRIERS),

THREE AMPHIBIOUS SHIPS, APPROXIMATELY 25 FRIGATES/DESTROYERS,

EIGHT DIESEL SUBMARINES, 10 PATROL BOATS, AND 10

MINESWEEPERS. CONSTRUCTION HAS BEGUN ON A LARGE AMPHIBIOUS

SHIP,8 WHICH WILL BE CAPABLE OF ACTING AS A TROOP TRANSPORT

AND ALSO HAVE THE ABILITY TO OPERATE HELICOPTERS AND AV-8B

SEA HARRIERS, AND, EVENTUALLY, V/STOL JSFS. A TYPE 212

SUBMARINE CONSTRUCTION PROGRAM WILL

WILL REPLACE OLDER SUBMARINES. THE ITALIAN NAVY ALSO WANTS

TO ENHANCE ITS AMPHIBIOUS CAPABILITY TO PROJECT POWER BY

REFITTING ITS TWO LPDS, PROCURING NEW HELICOPTERS AND

ENLARGING ITS SAN MARCO NAVAL INFANTRY GROUP. IN 2002, THE

ITALIANS CONTINUED CO-PRODUCTION, WITH THE FRENCH, OF THE

HORIZON FRIGATE, A PROGRAM DESIGNED TO REPLACE SEVERAL OLDER

FRIGATES. THE ITALIANS HAVE A BILATERAL AMPHIBIOUS AGREEMENT

WITH THE SPANISH NAVY, WHICH HAS LED TO THE CREATION OF A

JOINT ITALIAN-SPANISH AMPHIBIOUS FORCE. THEY ARE ALSO

PROPOSING CREATION OF A NATO NAVAL HIGH READINESS FORCE USING

ITALIAN UNITS AS THE CENTERPIECE.



29. (U) AIR FORCE: THE ITALIAN AIR FORCE PROVIDES

SIGNIFICANT LOGISTICAL INFRASTRUCTURE SUPPORT TO THE US AND

NATO FORCES. HOWEVER, ITS ABILITY TO CONTRIBUTE DIRECTLY IN

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PAGE 03 ROME 00353 06 OF 12 291712Z

A FORCE-PROJECTION ROLE IS MODEST. THE PRIMARY MILITARY

LIMITATIONS TO OUT OF AREA OPERATIONS OF THE ITALIAN AIR

FORCE ARE: PROHIBITION OF THE USE OF CONSCRIPTS OVERSEAS,

LACK OF STRATEGIC LIFT, AND LACK OF ADEQUATE AIR REFUELING

SUPPORT FOR MORE THAN A HANDFUL OF AIRCRAFT. ADDITIONALLY,

IN THE SURFACE ATTACK ROLE, THERE ARE INSUFFICIENT

INVENTORIES OF PRECISION GUIDED WEAPONS TO SUSTAIN A BOMBING

CAMPAIGN OF MORE THAN A FEW DAYS. HOWEVER, SINCE THE END OF

THE GULF WAR, ITALY HAS MADE DRAMATIC GAINS IN IMPROVING ITS

CONVENTIONAL WAR FIGHTING ABILITY. ITALY HAS INCREASED ITS

PURCHASE OF PRECISION WEAPONS, SIGNED CONTRACTS TO PURCHASE

US-MADE AIR REFUELING AIRCRAFT, LEASED EX-US F-16 FALCONS (34

F-16A/B AIRCRAFT TO ARRIVE IN CY2003 FOR USE IN AUGMENTING

ITS FIGHTER INTERCEPTOR FORCE UNTIL THE EUROFIGHTER TYPHOON

COMES ON LINE,) PURCHASED 24 C-130J AIRCRAFT, MODIFIED SOME

TORNADO AIRCRAFT FOR SUPPRESSION OF ENEMY AIR DEFENSE ROLES

AND INCREASED TRAINING OF TORNADO FLIGHT CREWS IN THE

EMPLOYMENT OF LASER GUIDED MUNITIONS.



30. (U) THE EUROFIGHTER TYPHOON IS THE LARGEST PROCUREMENT

ITEM IN ITALY,S DEFENSE BUDGET. ALTHOUGH IT ENTERS SERVICE

IN 2004, IT WILL NOT REACH FULL OPERATIONAL CAPABILITY UNTIL

2007 OR 2008. UNTIL IT REACHES FULL OPERATIONAL CAPABILITY,

IT WILL NOT GREATLY INCREASE ITALY'S ABILITY TO PROVIDE AIR

SUPREMACY AND DEPLOYABILITY. AS A RESULT, A LARGE PART OF

ITALY,S AIR COMBAT POWER WILL RELY ON OBSOLETE F-104

STARFIGHTER AIRCRAFT (TO BE REPLACED BY THE EUROFIGHTER

TYPHOON) AND THE SURFACE ATTACK

AIRCRAFT, THE JOINT BRAZILIAN-ITALIAN AMX. ITALY WAS THE

SECOND FOREIGN CUSTOMER TO SIGN A CONTRACT TO HELP FUND,

DEVELOP AND MANUFACTURE THE JOINT STRIKE FIGHTER (JSF),AND

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PAGE 04 ROME 00353 06 OF 12 291712Z

THE SIZE OF ITS PARTICIPATION MAKES IT THE SECOND LARGEST JSF

PARTNER(AFTER THE UK). ITALY PLANS ON TAKING DELIVERY OF ITS

FIRST JSF IN 2012 AND WILL USE THE AIRCRAFT TO REPLACE ITS

AMX AND TORNADO AIRCRAFT IN THE SURFACE ATTACK ROLE AND

REPLACE ITS AV-8B,S ONBOARD THE CARRIER GARIBALDI AND ITS

SUCCESSOR. WITH ITALY,S REPLACEMENT OF THE F-104 BY THE

TYPHOON AND THE REPLACEMENT OF THE AMX WITH THE JOINT STRIKE

FIGHTER, ITS EMPLOYABLE COMBAT POWER WILL SIGNIFICANTLY

INCREASE.



31. (U) CARABINIERI: THE CARABINIERI ARE, TECHNICALLY, THE

FOURTH ELEMENT OF THE ITALIAN ARMED FORCES, AND REPORT TO THE

MINISTER OF DEFENSE. WHILE MOST CARABINIERI RESPONSIBILITIES

ARE FOR DOMESTIC SECURITY AND POLICE, CARABINIERI FORCES PLAY

A LEADING ROLE IN MSU OPERATIONS IN THE BALKANS, AFGHANISTAN,

AND ARE IN MANY RESPECTS THE MODEL FOR INTERNATIONAL FORCES

BRIDGING THE GAP BETWEEN MILITARY PEACEKEEPING AND CIVILIAN

POLICING FUNCTIONS. ADDITIONALLY, PURSUANT TO A

LONG-STANDING AGREEMENT WITH THE US ARMY, ITALY PROVIDES TWO

CARABINIERI COMPANIES ON A FULL-TIME BASIS TO THE US ARMY'S

SOUTHERN EUROPEAN TASK FORCE TO ASSIST IN FORCE PROTECTION



UNCLASSIFIED



UNCLASSIFIED PTQ1547



PAGE 01 ROME 00353 07 OF 12 291713Z

ACTION PM-00



INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CA-01 CIAE-00

SRPP-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00

LAB-01 VCE-00 AC-01 NSAE-00 ACE-00 IRM-00 SSO-00

SS-00 TEST-00 PMB-00 PRM-00 DRL-01 SAS-00 /004W

-------------- 2DA9F0 291713Z /38

O 291637Z JAN 03

FM AMEMBASSY ROME

TO SECSTATE WASHDC IMMEDIATE 7870

INFO SECDEF WASHDC IMMEDIATE

ALL NATO POST COLLECTIVE PRIORITY

JOINT STAFF WASHDC PRIORITY

AMCONSUL FLORENCE

AMCONSUL MILAN

AMCONSUL NAPLES



UNCLAS SECTION 07 OF 12 ROME 000353



SIPDIS



STATE FOR PM/B - SENIOR ADVISOR

STATE ALSO FOR EUR/WE AND EUR/RPM

DOD FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,

OASD/ISA/NESA, OASD/ISA/BTF AND OSD/PA AND EU



E.O. 12958: N/A

TAGS: PREF, MCAP, MARR, NATO, IT

SUBJECT: ITALY: 2003 REPORT TO CONGRESS ON ALLIED

CONTRIBUTIONS TO THE COMMON DEFENSE



UNCLASSIFIED



PAGE 02 ROME 00353 07 OF 12 291713Z

AND LAW ENFORCEMENT ON BASES USED BY THE US ARMY IN ITALY.



--------------

ITALY'S CONTRIBUTION TO THE COMMON DEFENSE

--------------

HOST NATION SUPPORT:



32. (U) -- ITALY PROVIDES FOR USG USE OF SEVEN PRINCIPAL

MILITARY BASES AND NUMEROUS SMALLER LOCATIONS, ALL ON A

NO-FEE BASIS, A UNIQUELY ADVANTAGEOUS ARRANGEMENT FOR THE US

DEFENSE BUDGET. THESE STRATEGICALLY LOCATED INSTALLATIONS

PERMIT A FORMIDABLE US FORCE CAPABILITY VIA THREE AIRBASES,

ONE STAGING BASE, ONE LARGE AMMUNITION AND EQUIPMENT BASE AND

TWO HOMEPORTS - ONE WITH THE ONLY ATLANTIC REGION

MAINTENANCE/REPAIR TENDER SHIP PRIMARILY FOR NUCLEAR POWERED

SUBMARINES. US FLEET AND SUBMARINE OPERATIONS IN THE

MEDITERRANEAN WOULD BE SERIOUSLY HAMPERED WITHOUT THIS

CAPABILITY.

-- ITALIAN CIVIL AND MILITARY SECURITY FORCES PROVIDE

INVALUABLE ANTI-TERRORIST PROTECTION TO US SHIPS TRANSITING

ITALIAN PORTS AND MILITARY BASES UTILIZED BY USG ALONG WITH

ARMED CARABINIERI SECURITY OF SENIOR US OFFICERS STATIONED OR

TRANSITING ITALY AND OTHER DIGNITARIES, AS NECESSARY.

-- A ROBUST TELECOMMUNICATIONS INFRASTRUCTURE ENHANCES US

MILITARY DATA AND VOICE TRANSMISSION WHILE REDUCING

REQUIREMENTS FOR US MILITARY EQUIPMENT AND PERSONNEL THROUGH

A SUSTAINED AVAILABILITY OF LEASED TELECOMMUNICATIONS

CIRCUITS.

-- HOST NATION ASSURANCES FOR SAFE LINES OF COMMUNICATIONS

(AIRPORTS, SEA PORTS, RAILWAYS, HIGHWAYS, AIR ROUTES)

FACILITATE THE SURGE OF US MILITARY PERSONNEL AND EQUIPMENT

UNCLASSIFIED



PAGE 03 ROME 00353 07 OF 12 291713Z

DURING TIMES OF CRISIS OR CONFLICT THROUGH THREE SHARED

CIVILIAN/MILITARY AIRFIELDS WITH BASING OF US AIRCRAFT.

-- UNPARALLELED AUTHORIZATION OF A US/NATO MUNITIONS STORAGE

FACILITIES ON ITALIAN SOIL PERMITS INVALUABLE SOURCE FOR A

PRE-POSITIONED STAGING MUNITIONS CAPABILITY TO EXERCISES AND

CONTINGENCIES INCLUDING THE WAR ON TERRORISM.

-- CONVENIENT ACCESS TO MILITARY TRAINING AND EXERCISE RANGES

ALLOWS THE US MILITARY TO CONDUCT INDISPENSABLE LAND MANEUVER

EXERCISES, LIVE-FIRE TRAINING, PARACHUTING, AND AIR TRAINING

ACTIVITIES.

-- NO-COST LOAN OF 16 ITALIAN ARMY "CENTAURO" WHEELED ARMORED

VEHICLES TO THE US ARMY SIGNIFICANTLY AIDED THE

TRANSFORMATION OF NEW INTERIM BRIGADE COMBAT TEAMS TO DEVELOP

OPERATIONAL CONCEPTS, TACTICS AND PROCEDURES FOR A MOBILE GUN

SYSTEM.

-- ITALY HAS BEEN VERY RESPONSIVE TO SECURITY CONCERNS AS

EXEMPLIFIED WITH A 10-20 PERCENT INCREASE OF ARMED FORCES TO

SUPPLEMENT US AND CONTRACT GUARD PERSONNEL RESPONSIBLE FOR

PERIMETER SECURITY OF US/NATO-UTILIZED INSTALLATIONS.

-- PROVIDED ADDITIONAL VALUABLE LAND IN SUPPORT OF THE F-16

BEDDOWN AT AVIANO AIR BASE.

DEFENSE SPENDING:



33. (U) -- ITALIAN CONTRIBUTION TO BILATERAL AND MULTILATERAL

COOPERATIVE PROGRAMS FOR THE DEVELOPMENT OF NEW WEAPON

SYSTEMS HAS BEEN NOTHING SHORT OF OUTSTANDING. THEIR

PARTICIPATION REDUCES UNIT COSTS WHILE BOLSTERING A VITAL US

DEFENSE INDUSTRIAL BASE AS EXEMPLIFIED THROUGH THE JOINT

STRIKE FIGHTER PROGRAM (JSF),MEDIUM EXTENDED AIR DEFENSE

SYSTEM, MINI-INFORMATION DISTRIBUTION SYSTEM, F-16 FIGHTER

AIRCRAFT LEASE, LIGHTWEIGHT 155MM HOWITZER DEVELOPMENT, AND

UNCLASSIFIED



PAGE 04 ROME 00353 07 OF 12 291713Z

SEVERAL MISSILE UPGRADE PROGRAMS.

-- DIRECT PROCUREMENT OF US MANUFACTURED MAJOR DEFENSE

EQUIPMENT PROMOTES AMERICAN PRODUCTS AND INTEROPERABILITY

WHILE LENGTHENING AVAILABILITY OF PRODUCTION LINES AND

PRESERVING A US INDUSTRIAL BASE AS DEMONSTRATED THROUGH THE

PURCHASE OF 200 LOCKHEED-MARTIN JSF AIRCRAFT, FIVE GENERAL

ATOMICS PREDATOR UNMANNED ARIEL VEHICLES, AND LARGE-SCALE

PURCHASES OF FIVE TYPES OF RAYTHEON MISSILES.

-- ITALY AGGRESSIVELY PROCURES US-BASED TRAINING VALUED AT

OVER 60 MILLION DOLLARS PER YEAR IN ORDER TO TRAIN ITS

MILITARY PERSONNEL. THIS IMMENSE EXPENDITURE SUBSIDIZES

OPERATING COSTS AND HELPS SUSTAIN US MILITARY ACADEMIC

INSTITUTIONS.



ROLES AND MISSIONS:



34. (U) -- INVALUABLE PRODUCT SHARING OF ITALIAN MILITARY

INTELLIGENCE WITH US COUNTERPARTS CONSTITUTES A NOTEWORTHY

PORTION OF THE INTELLIGENCE COLLECTION AND ANALYSIS WORKLOAD

ESSENTIAL TO MAINTAINING FULL COVERAGE OF THE MEDITERRANEAN

REGION.



UNCLASSIFIED



>

2003ROME00353 - Classification: UNCLASSIFIED