Identifier
Created
Classification
Origin
05ROME2679
2005-08-11 14:01:00
CONFIDENTIAL
Embassy Rome
Cable title:  

ITALY UNABLE TO INCREASE AFRICA EMERGENCY AID

Tags:  EAID EAGR XA IT FAO 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L ROME 002679 

SIPDIS


PASS USAID FOR PPC/DCO
USEU FOR PATRICIA LERNER

E.O. 12958: DECL: 08/12/2015
TAGS: EAID EAGR XA IT FAO
SUBJECT: ITALY UNABLE TO INCREASE AFRICA EMERGENCY AID

REF: A. SECSTATE 109314

B. JUNE 30 NATSIOS-DEODATO LETTER

C. ROME 1671

Classified By: Acting Economic Minister-Counselor Kathleen Reddy for re
asons 1.4 (b,d)

C O N F I D E N T I A L ROME 002679

SIPDIS


PASS USAID FOR PPC/DCO
USEU FOR PATRICIA LERNER

E.O. 12958: DECL: 08/12/2015
TAGS: EAID EAGR XA IT FAO
SUBJECT: ITALY UNABLE TO INCREASE AFRICA EMERGENCY AID

REF: A. SECSTATE 109314

B. JUNE 30 NATSIOS-DEODATO LETTER

C. ROME 1671

Classified By: Acting Economic Minister-Counselor Kathleen Reddy for re
asons 1.4 (b,d)


1. (SBU) Summary: Italy is unable to increase its emergency
humanitarian assistance for Africa due to severe budget
difficulties. Italy's overall aid spending levels will
likely remain at 0.17 percent of GDP (the same level as 2004)
only because of debt relief, particularly for Ethiopia.
"Real" aid funds available for programmed assistance and
emergency relief are actually going down as Italy tries to
keep its government deficit under control. Regarding the
U.K. proposal for an International Finance Facility, many
Italian aid officials share USG concerns about
"front-loading" aid, but the Italian Finance Ministry
supports the concept. End summary.


2. (U) Drawing from Ref A points, Ambassador Sembler wrote
Italian Foreign Minister Fini to urge Italy to provide
additional emergency humanitarian relief for Africa. USAID
Administrator Natsios reiterated this message in a June 30
letter to Giuseppe Deodato, Director General for Development
Cooperation at the Ministry of Foreign Affairs. Econoff then
met August 9 with Gabriele Di Muzio, the MFA's Development
Cooperation Office Director for Africa, to discuss this
appeal for more Africa assistance.

Italy Has No Money to Give.
--------------


3. (SBU) Di Muzio said Italy will not be able to follow the
U.S. and U.K. lead by increasing emergency humanitarian
assistance to Africa. Di Muzio said that given Italy's
fiscal difficulties, the GOI cannot make any additional
commitments beyond what has already been budgeted for 2005.
Italy has, however, made a euro 2.5 million (euro=$1.23)
contribution to the World Food Program for Niger. No
additional money, he said, is available to meet food needs in
Ethiopia and Eritrea.


4. (C) Di Muzio said that while Africa still receives about
40 percent of Italian official foreign aid, overall aid
amounts are shrinking. Di Muzio cited the example of his own
office, which handles all bilateral development projects in
Africa. Di Muzio requested euro 120 million for 2005 but
received only euro 70 million (which, he said, has already
been spent),a big drop from the euro 96 million his office
received in 2004 and euro 111 million in 2003.

GOI Aid Levels Steady Only Because of Debt Relief.
-------------- --------------


5. (C) On paper, Di Muzio predicted, Italy will maintain an
aid spending level of 0.17 percent of GDP for 2005
(approximately euro 2.4 billion, the same level as 2004) but
only because of debt relief. For example, Italy this year
forgave $360 million in bilateral debt to Ethiopia. In other
words, Italy's "real" aid budget--money available for
emergency relief and programmed development projects--is
actually going down. The ongoing crisis in Darfur,
meanwhile, is soaking up ever larger portions of Italy's
resources for Africa. Di Muzio said Italy pledged at the
Oslo conference to disburse euro 60 million in aid to Sudan
in 2005-2007, and this promise will mean further belt
tightening for other areas.

Aid Officials Ambivalent About IFF.
--------------


6. (C) Di Muzio shed some light on the GOI's position
regarding the U.K. International Finance Facility (IFF)
proposal. He explained that the Italian Finance Ministry,
without consulting the MFA, has already voiced support for
the IFF, a mechanism for front-loading aid through the sale
of bonds (Ref C). Di Muzio said aid professionals in the MFA
are not really enthusiastic about the IFF. Echoing USG
concerns, Di Muzio commented that many development problems
cannot be solved simply by spending more money. He also said
he and many of his colleagues in the aid wing of the MFA
believe it is better to strengthen existing channels for
delivering aid funds rather than creating a new body, with
the accompanying support staff and overhead. However, Di
Muzio predicted, now that the Ministry of Finance is on
record as favoring the IFF, the GOI will remain passively
supportive of the idea.


7. (SBU) Italy's official aid community, according to Di

Muzio, is more enthusiastic about new funding ideas such as a
surcharge on international airline tickets, an international
lottery, or a tax on global financial transactions (Tobin
tax). Italy, Di Muzio said, is "open" in principle to any
new funding methods to support development assistance.
BORG


NNNN
2005ROME02679 - Classification: CONFIDENTIAL