Identifier
Created
Classification
Origin
03ROME4237
2003-09-17 16:07:00
CONFIDENTIAL
Embassy Rome
Cable title:  

PM BERLUSCONI'S MIDDLE EAST "MARSHALL PLAN"

Tags:  ECON IT PREL EAID KWBG UN 
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C O N F I D E N T I A L ROME 004237 

SIPDIS


E.O. 12958: DECL: 09/12/2013
TAGS: ECON IT PREL EAID KWBG UN
SUBJECT: PM BERLUSCONI'S MIDDLE EAST "MARSHALL PLAN"

REF: TEL AVIV 5266

Classified By: Economic Minister Counselor Scott Kilner for reasons 1.5
(b) and (d).

C O N F I D E N T I A L ROME 004237

SIPDIS


E.O. 12958: DECL: 09/12/2013
TAGS: ECON IT PREL EAID KWBG UN
SUBJECT: PM BERLUSCONI'S MIDDLE EAST "MARSHALL PLAN"

REF: TEL AVIV 5266

Classified By: Economic Minister Counselor Scott Kilner for reasons 1.5
(b) and (d).


1. (C) SUMMARY: Embassy officers met on September 12 with
Ambassador Mario Sica, the Foreign Ministry's new point
person for Prime Minister Berlusconi's Middle East "Marshall
Plan." Sica said he would travel to Washington the week of
September 29 to discuss the plan; this would follow
discussion by G-8 experts in Dubai September 22. He outlined
the principal features of what he expects would be a
three-year plan beginning in 2005 and costing around USD one
billion per year. Emboffs suggested areas of the plan that
would need to be clarified in Sica's Washington meetings, and
recommended additional appointments for him. Sica stressed
PM Berlusconi's strong political interest in the success of
the plan. END SUMMARY.


2. (C) Since completing his assignment as Italy's ambassador
to Cairo, Mario Sica has for the past month led the MFA's
work on PM Berlusconi's proposal for a "Marshall Plan" for
the Middle East. Recently returned from a trip to the region
(Reftel),Sica laid out the key features of the plan for
EcMin, PolMin, and visiting EUR/WE deskoff (notetaker).
Noting a lack of long term planning in the Palestine
Authority, Sica said Italy saw its role as a catalyst for the
international community to act. While the original Marshall
Plan was a useful comparison, it was important to remember
that it was a case of one country giving to many. With
Palestine, many would be giving to one. Sica emphasized that
the plan must be financially significant. Italy considers
USD one billion per year over three years an appropriate
target. Because the plan should focus on development and
reconstruction, not emergency relief, it should begin in

2005. Finally, the plan should have a regional scope. It
should focus on Palestine, while at the same time encouraging
relations with neighboring countries, principally Egypt,
Jordan and Israel. Based on his recent meetings in Israel,
Sica thought the Israeli government would take a practical
and supportive approach to the initiative, though he
speculated that Jewish American groups would be more

skeptical.


3. (C) Sica said Italy was aware of the political
implications of giving aid to the Palestinians. He felt
planning would be vital and should be done by Palestinians
with the advice of the World Bank, the European Commission,
and an ad hoc task force of donors. Politically, it would be
important to have a high-level appeal and announcement of a
rough figure for the plan. Italy is considering options for
a framework, perhaps having G8 Foreign Ministers announce the
plan as part of the "Evian mandate."


4. (C) EcMin cautioned that the plan must take into account
security and the political situation. Sica thought it could
be done in spite of the current security situation. While
the plan does require a Palestinian governmental structure,
other reconstruction efforts, for example in Gaza, are
underway. International donors could provide political
guarantees to encourage private sector involvement in
economic development. EcMin pointed out that a similar
discussion is underway with regard to Iraq, noting the
Brussels Core Group meeting and the upcoming Madrid donors'
conference. There is an ongoing effort to secure minimum
commitments: with existing budgetary difficulties in donor
countries this presents a real challenge. Sica noted that
the assistance required for Iraq was of an entirely different
order of magnitude, and he hoped donors would see the amounts
needed for Palestine as relatively small.


5. (C) PolMin reminded Sica that the original Marshall Plan
focused on democratic values, not dollar values. Assistance
of this kind can create the conditions for democratic
institutions and free markets. While the biggest hurdle for
the Middle East Marshall plan may be identifying the
necessary funds, the biggest obstacle to implementation would
be PA Chairman Arafat's history of diverting funds from the

international community for his own purposes. In the past,
there have been insufficient controls on donor funds,
especially from the EU. A new plan would need to emphasize
careful controls. PolMin also noted that the US, EU members
and other donors might be reluctant to lose a separate
identity for their contributions to the Palestinians. The
GOI may wish to study, as a precedent, the Stability Pact for
Southeast Europe, which provided an umbrella for bilateral
and multilateral development spending in the Balkans without
creating a controlling bureaucracy. PolMin added that the
President's strategic vision for the Middle East goes beyond
settlement of disputes to transforming the society and
economics of the region. The GOI should consider how its
proposal could support not only the roadmap but this broader
objective.


6. (C) Sica accepted these points, and suggested that the
solution to the problem of diverting funds could be an ad hoc
donor task force. He said that President Bush had voiced
support for the Middle East Marshall plan when he met
Berlusconi at Crawford in July, and had noted that the G-8
would be a better choice than the EU for monitoring
implementation. With the President providing strategic
vision, the plan could be made to work.


7. (C) Sica envisioned the US share of the plan to be
between 20 and 50 percent of the USD one billion per year.
Italy's share would be decided by Finance Minister Tremonti,
but Sica thought it should not be less than 10 percent.
This, he said, is the price of the region. The Palestinians
must be removed from the lives of despondency and inaction
they have come to expect: their hopelessness is the cause of
the Intifadda.


8. (C) EcMin recommended that Sica schedule appropriate
meetings with the Bureau of Near Eastern Affairs while in
Washington. His scheduled appointment with Under Secretary
Larson would of course be essential, but the political
dimension of the plan should also be raised with NEA.


9. (C) COMMENT: It was clear from Sica's presentation that
Berlusconi cares deeply about a "Marshall Plan" for the
Middle East and will be looking for others to sign on. From
accounts of internal EU discussions we have heard previously
from the MFA, it was probably a wise move to seek a G-8
umbrella rather than one from Brussels. The plan, however,
is in its early stages. Sica has delayed his planned travel
to Washington for two weeks, during which he will accompany
FinMin Tremonti to Dubai. It will be instructive to see if
Sica arrives in Washington with a developed, convincing
agenda. END COMMENT.
SEMBLER


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2003ROME04237 - Classification: CONFIDENTIAL