ITALY-EU: BERLUSCONI STANDS FIRM, BUT PRODI

UNCLAS ROME 002178 SIPDIS SENSITIVE FRANFURT FOR WALLAR E.O. 12958: N/A TAGS: PREL PGOV ECON IT TU EUN ITALY NATIONAL ELECTIONS SUBJECT: ITALY-EU: BERLUSCONI STANDS FIRM, BUT PRODI REVEALS DOUBTS ON TURKISH ACCESSION ¶1. (U) Sensitive but unclassified; not for Internet distribution. -------------- SUMMARY -------------- ¶2. (SBU) Italian reactions to the French/Dutch rejection of the EU Constitution are playing out in the context of national election politics, Italy's own battle with Brussels over Stability Pact budget/deficit restrictions and rising concern about illegal immigration. PM Berlusconi continues to defend both the euro and EU expansion, but on June 21, former EC President and center- left leader Romano Prodi surprised many by calling into question Turkey's accession process. Should Prodi lead the next government, Italian support for Turkish EU membership could weaken considerably. END SUMMARY. -------------- EURO HERE TO STAY -------------- ¶3. (U) Speaking in Parma at a joint press conference with European Commission President Jose Manuel Barroso following the inauguration of the European Food Safety Authority on June 21, PM Silvio Berlusconi dismissed calls by Northern League allies to return to the lira, saying it is "neither possible nor convenient to walk out of the euro." Berlusconi posited that the Maastricht Treaty helped contain expenses for Italy and other countries. It must, however, be interpreted with "some flexibility" and the EU should assess the possibility of having a European economic policy, because at the moment, the European Central Bank can only fight inflation. ¶4. (U) In an interview June 21 with a small northern daily newspaper, former European Commission President and presumed 2006 center-left challenger to Berlusconi Romano Prodi admitted that the euro "does not work...because there is no economic development policy," but added that the "problem is not the euro, but enlargement." -------------- EUROPE "PAUSES" -------------- ¶5. (U) According to Berlusconi, "nothing will happen" after the French and Dutch NOs to the European Constitutional Treaty and the crisis over EU financial perspectives. "Europe continues, and there will be more time to explain the Constitution and reach an agreement on the budget." Europe is simply undergoing a "pause," but the treaty will eventually "see the light," when people in Europe are fully informed of the benefits that it will bring to the EU, including the role the Treaty would allow the EU to play internationally, "on the same level as the United States, because it gives the go ahead to European defense and a European army." ¶6. (U) Berlusconi dismissed coalition partner Northern League's continuing Euro-skepticism ("Europe is dead," party leader Umberto Bossi declared to sympathizers in a rare public appearance June 19),and said the EU "remains essential to maintaining peace and security in the world." The Northern League is "tied to the interests of its region and its constituents," Berlusconi continued, but he underscored that the League has not and will not stop the Government from moving forward on Europe. The PM nonetheless addressed League concerns when he called for a Europe "careful to defend its citizens, and not a Europe of elites and bureaucracy, as we are unfortunately faced with today." "We need a Europe in which rules do not drop down from on high," Berlusconi argued, a Europe with fewer laws, because "many regulations, when dropped on the various countries, have caused difficulties." -------------- TURKISH ACCESSION -------------- ¶7. (U) Berlusconi also reiterated Italy's support for Turkey's accession to the EU, saying Turkey is an "important partner because of its geo-strategic position between Europe and the Muslim world. A Muslim country that can be democratic and can cooperate with the West" would be an asset to the future of the EU, he argued. Therefore, he hoped people in France and Germany "will change their minds and accept Turkey as a European country, but this cannot happen tomorrow or the day after, of course." -------------- PRODI RETHINKS EXPANSION? -------------- ¶8. (SBU) Many were shocked the same day to read an interview by center-left leader and former European Commission President Romano Prodi in the Italian northeastern daily "Il Gazzettino," in which he declared the "real problem is Turkey." Raising concerns later echoed by current Commission President Barroso, Prodi stated that the "conditions for Turkey's accession to the EU in the short or mid-term no longer exist. It is necessary to rethink" Turkey's future presence in the EU, because the "referenda indicated strong alarm" about the country's accession. ¶9. (SBU) He did not, however, repudiate expansion to central and eastern Europe and the Balkans, which he had strongly backed as Commission President. On the contrary, playing to the local readership, Prodi suggested that Italy's northeastern region of Veneto, which has strong economic relations with Romania, would profit from that country's EU accession. ¶10. (SBU) Prodi's remarks about Turkey should be seen partially in the context of the building Italian political campaign, including internal center-left politicking. Prodi and Daisy party leader Francesco Rutelli have been sparring on a number of issues, and Rutelli in a June 22 press interview essentially accused Prodi of having rushed EU expansion. According to Rutelli, "there is only one way out. Stop enlargement until the Constitutional Treaty is ratified...because a "Europe of 25 cannot work." ¶11. (SBU) Not surprisingly, Prodi's comments about Turkish accession provoked enthusiastic support from the Northern League, with Reform Minister Roberto Calderoli applauding: "Bravo, better late than never." The rest of the governing coalition followed Berlusconi's example in countering Northern League excesses. DPM/FM Gianfranco Fini noted that the League's position is "truly in the minority both in the Government and in Italian public opinion." -------------- COMMENT -------------- ¶12. (SBU) In his press statements, PM Berlusconi accurately described the Northern League's role in the coalition's current term: While party representatives may take "extreme" positions and make inflammatory speeches in their northern district, in direct appeal to their voters who crave such rhetoric, the party has not pressed its Euro-skeptic viewpoint with particular fervor in Rome. The League is not a threat to Italy's staying the course on EU expansion or remaining with the euro. ¶13. (SBU) The Italian economy is officially in recession, the Government continues to battle Brussels over EU Stability Pact restrictions on budgets and deficits, and the man in the street still blames the euro for many economic woes. Add in growing Italian discomfort over illegal immigration and historic antipathy toward Turkey, and you get a formula for skepticism over EU expansion. While Prodi had likely factored in all those concerns, his latest statement on Turkey may be more of a "coming-out" than a change in position. He has long been lukewarm to Turkish accession, and Italian support for Turkish EU membership could weaken considerably should Prodi lead the next government. SKODON NNNN 2005ROME02178 - Classification: UNCLASSIFIED