Identifier
Created
Classification
Origin
05ROME2349
2005-07-14 06:48:00
CONFIDENTIAL
Embassy Rome
Cable title:  

IRAQ: AMBASSADOR JONES DISCUSSES ECONOMIC AND

Tags:  PGOV PREL ECON EAID EIND IZ IT EUN IRAQI FREEDOM 
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C O N F I D E N T I A L ROME 002349 

SIPDIS


E.O. 12958: DECL: 07/13/2015
TAGS: PGOV PREL ECON EAID EIND IZ IT EUN IRAQI FREEDOM
SUBJECT: IRAQ: AMBASSADOR JONES DISCUSSES ECONOMIC AND
POLITICAL DEVELOPMENTS WITH ITALIAN MFA OFFICIALS

REF: A. STATE 124857

B. STATE 127710

C. ROME 2348

Classified By: Acting Pol M/C Jonathan Cohen for reasons 1.4 (b) and (d
)

C O N F I D E N T I A L ROME 002349

SIPDIS


E.O. 12958: DECL: 07/13/2015
TAGS: PGOV PREL ECON EAID EIND IZ IT EUN IRAQI FREEDOM
SUBJECT: IRAQ: AMBASSADOR JONES DISCUSSES ECONOMIC AND
POLITICAL DEVELOPMENTS WITH ITALIAN MFA OFFICIALS

REF: A. STATE 124857

B. STATE 127710

C. ROME 2348

Classified By: Acting Pol M/C Jonathan Cohen for reasons 1.4 (b) and (d
)


1. (C) Summary. Senior Advisor and Coordinator for Iraq
Policy Ambassador Richard H. Jones updated key Italian MFA
officials on Iraqi efforts to draft a new constitution,
including the increased Sunni participation in the drafting
committee, and US views on UNSCR 1546 and continuing the
mandate of the coalition forces. The Italians stressed the
need to involve Dhi Qar province, where Italian forces are
located, in the reconstruction efforts. Italy has dispersed
approximately 140 million of 200 million Euro pledged at
Madrid and hopes to come up with up to 100,000 Euro more for
the constitutional committee secretariat. Ambassador Jones'
also participated in meetings on "Engaging the Coalition"
(Ref C). End summary.


2. (U) Senior Advisor and Coordinator for Iraq Policy
Ambassador Richard H. Jones met July 7 with Luigi Maccotta,
head of the Iraq Task Force at the Italian Ministry of
Foreign Affairs. Joining Maccotta were Lino Cardarelli, an
MFA advisor who previously served in the Program Management
Office of the Coalition Provisional Authority, and Stefano
Sturci a new member of the MFA's Iraqi Task Force.
Ambassador Jones was accompanied by Staff Assistant Matt
Fuller, Acting Political Minister Counselor, PolOff and
EconOff.

New Mandate for Coalition Forces
--------------


3. (C) Ambassador Jones briefed Maccotta on plans for
extending UNSCR 1546 beyond the completion of the political
process. Noting that the current mandate expires at the end
of the transition, Jones said the coalition must explore
options for extending the Multi-National Force mandate,
either by extending 1546 or passing a new Security Council
resolution. Coalition Provisional Authority Order 17
provides legal protection for all coalition forces, but the

Iraqi government must decide whether to continue with the
Order 17 arrangement or perhaps negotiate bilateral Status of
Forces Agreements (SOFAs) with the United States and other
coalition partners.


4. (C) Maccotta commented that preserving the "multilateral
momentum" embodied by UNSCR 1546 and the June Brussels
conference is very important for Italy. He observed that
Russia, France, and some Iraqi Sunnis have recently called
for a solid timetable for the departure of foreign troops
from Iraq. A withdrawal plan based on the successful
completion of the political transition is too vague for some
players, Maccotta asserted.


5. (C) In terms of Italian public opinion and PM Berlusconi's
relations with the Italian Parliament, Maccotta remarked that
it is crucial that the coalition military presence remain
"legitimate under a UN umbrella," whether under an extension
of UNSCR 1546 or a new mandate, and that the Iraqis
themselves request the continued presence of coalition
forces. Maccotta also said it was necessary to prepare an
"option B" for maintaining a legal mandate for the
multi-national force into 2006 in case the adoption of a new
constitution does not go as planned. Regarding legal
protection for coalition troops, Maccotta predicted that the
new Iraqi government would be eager to scrap the Order 17
arrangement as a relic of the occupation.

New Constitution and Saddam Trial
--------------


6. (C) Jones explained that the constitutional committee is
functioning well and is quickly assimilating the 15 new Sunni
members. The committee may even have a draft ready by mid
July, which would leave a full month for public consultation
before the August 15 deadline for completion of the document.
The Sunnis are now determined to participate in the
referendum on the new constitution. Jones, however, remarked
that the division of powers between the provinces and the
central government remains a sensitive question, and is


likely to be deferred until a later date. Another
problematic issue is the disposition of resources; a proposal
that provincial governments retain 50 percent of oil and gas
revenues could lead to huge central government deficits and
reduce the national authority's ability to address health,
education, and other responsibilities.


7. (C) Maccotta stressed the need to make sure the
constitution was widely supported prior to the referendum.
He also recommended that the trial of Saddam Hussein take
place next year, well after the referendum. Such a trial
could "open old wounds" in the Sunni community and it would
be better for Iraq to focus on inclusion of the Sunnis
through the December elections. Jones agreed, but noted that
the timing of the trial is an Iraqi decision.

Involving Provinces in Reconstruction
--------------


8. (C) Commenting on Italian Ambassador De Martino's recent
visit to Nassiriyah (where most of Italy's 3,000 plus troops
are based),Maccotta said De Martino sensed a great deal of
frustration among Iraqis in Dhi Qar province with the central
government and the lack of reconstruction funds for the
province. Provincial officials have asked the Italians for
$1 billion in aid which, Maccotta said, is far beyond Italy's
capacity. Nevertheless, Rome hopes that more reconstruction
money can be channeled into Dhi Qar and suggested that
expected donations from Jordan and other Middle East
countries target this region. The situation in Dhi Qar is
stable, Maccotta asserted, but provincial officials want to
see more tangible benefits from the Italian presence there.


9. (C) Jones responded that the USG is already moving to
consult more closely with provincial authorities. Provincial
Reconstruction and Development Councils (PRDCs) have been set
up in 15 of 18 Iraqi provinces, and they will help coordinate
projects with international donors. The USG has set aside up
to $725 million in reconstruction funds, to be announced at
the upcoming conference in Jordan, for projects that will be
coordinated through the PRDCs. Maccotta said the PRDCs would
be a helpful step forward.

Iraq Reconstruction Priorities
--------------


10. (U) Jones also outlined four projects the USG is
supporting based on priorities identified by Iraqi officials.
These include:

--a National ID card system that will be used to manage
health and other services;

--removal of shipwrecks from the Shatt al Arab waterway to
expand access to Iraqi ports, thus removing a major
bottleneck in the transport system;

--collection of natural gas (currently flared-off at oil
wells) for use in power generation; and

--the creation of a housing fund to provide access to
low-cost mortgages.


11. (SBU) None of these projects, Jones said, require a large
footprint of foreign experts. Jones commented that the
combined cost of these projects is about $1 billion and
additional funding could come in the form of concessionary
loans from donor countries and the World Bank. Iraq,
however, needs to create bodies capable of receiving and
servicing these loans -- for example, an authority to manage
the Shatt al Arab waterway.


12. (SBU) Cardarelli stated that an Italian firm had
previously expressed interest in participating in a national
ID card project. He also said he had been involved in
discussions with Iraqi officials about housing projects.
Cardarelli agreed with the need to minimize the number of
foreign experts. Most of these efforts, Cardarelli remarked,
could be managed remotely from Jordan or Kuwait, as Iraqi
personnel are capable of conducting the work on the ground.

New Italy Aid for Water, Health, and Elections
-------------- -



13. (U) Jones explained that the upcoming donors' conference
will focus on implementing a donor coordination mechanism.
The Iraq Ministry of Planning and a UN donor council will
play key roles in this new coordination plan.


14. (SBU) Maccotta said Italy will make a Euro 10 million
donation this year to the International Reconstruction Fund
Facility for Iraq. The 2005 donation will be earmarked for a
UN Food and Agriculture Organization water "master plan"
project. In addition, Italy is also in discussion with the
Italian Red Cross to undertake additional health sector
projects. Italy already supports the Medical City Center
Hospital in Baghdad via the Red Cross, but Italy also wants
to do health projects with a wider impact, including
establishment of an emergency medicine system and more
training assistance.


15. (SBU) In response to reftel demarches, Maccotta revealed
that Italy will also announce at the Dead Sea conference
additional training assistance related to the upcoming
constitutional referendum and national elections. Italy will
channel this assistance through the International Training
Programme for Conflict Management, a program run by the
Pisa-based university Scuola Superiore Sant'Anna. Maccotta,
Federica Ferrari-Bravo, Office Director for Middle East and
Mediterranean Economic Policies, and four other technical
experts plan to attend the conference.


16. (SBU) Maccotta said Italy will try to make a small (no
more that Euro 100,000) donation to the Constitutional
Committee secretariat, but he indicated such a donation will
depend on the availability of leftover funds in Italy's
special budget account for Iraq. Finally, Italy hopes to
make a Euro 30 million soft loan to Iraq in 2005, he said.

Italian Spending Nears Euro 1.5 billion
--------------


17. (SBU) Maccotta concluded the meeting with a rundown of
Italy's Iraq expenditures to date, the bulk of which, Euro
1.3 billion, has supported Italy's military deployment.
Italy has disbursed an additional Euro 92 million on the
civilian side, including bilateral reconstruction assistance
and security for its diplomatic mission. Finally, Italy has
disbursed Euro 47 million via multilateral aid channels
including the FAO, UNIDO, and UNDP. Maccotta predicted that
the GOI will be able to fully disburse its Euro 200 million
Madrid pledge by 2007.


18. (U) Ambassador Jones has cleared this cable.

BAGHDAD MINIMIZE CONSIDERED

SEMBLER


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2005ROME02349 - Classification: CONFIDENTIAL