ITALIAN RESPONSE TO DEMARCHE ON U.S. INITIATIVE TO

UNCLAS ROME 000469

SIPDIS


SENSITIVE

E.O. 12958: N/A
TAGS: KNNP PARM TRGY AORC IT IAEA
SUBJECT: ITALIAN RESPONSE TO DEMARCHE ON U.S. INITIATIVE TO
STRENGTHEN THE IAEA

REF: STATE 21700

(U) SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET
DISTRIBUTION.


1. (SBU) On February 7, 2005 SCICOUNS delivered reftel
demarche to Counselor Giovanni Battista Iannuzzi, Director of
Office VII (National Authority for Conventions on Nuclear,
Bacteriological and Chemical Disarmament) of the Ministry of
Foreign Affairs' Directorate General for Multilateral
Political Affairs and Human Rights. On February 11, Iannuzzi
responded with preliminary comments. Iannuzzi thanked
SCICOUNS for providing the U.S.-proposed text for the draft
terms of reference on the IAEA Special Committee on
Safeguards and Verification, as well as the text of the
U.S.-proposed Draft Board Decision to create the Special
Committee. He assured SCICOUNS that he had provided copies
of these texts to Ambassador Catalano, who will head the
Italian delegation at the Senior Group meeting in London on
February 14th. Iannuzzi emphasized that his comments were
preliminary, and said that the Italian delegation looked
forward to further discussion of the U.S. proposals in
London.


2. (SBU) Iannuzzi said that after comparing the U.S. texts
of September and November 2004, Italy's views remained fairly
the same. He confirmed that promoting additional signatories
to the IAEA Additional Protocol was a priority objective for
Italy, just as for the United States. He also said that
Italy shared the idea that creating a Special Committee on
Safeguards and Verification in the IAEA could be useful in
combating the increased menace of nuclear terrorism and
nuclear proliferation.


3. (SBU) Iannuzzi told SCICOUNS that Italy was interested in
taking part in the proposed Special Committee. However,
referring to the last point in the U.S.-proposed Draft terms
of reference for the Special Committee (paragraph 8 of
reftel),Iannuzzi responded that the GOI preferred resources
for the Special Committee to come from existing budget
resources within IAEA, not from extra-budgetary resources
made available by interested states. COMMENT: Context for
Iannuzzi's comment: for the last several years, Italy has
relied on extraordinary one-off revenue measures and spending
deferrals to avoid bumping up against the EU deficit/GDP
ceiling of three percent. The current Finance Minister has
pursued the most challenging fiscal reforms in the last
decade, while also implementing tax cuts promised during
Prime Minister Berlusconi's campaigns. Domestic and
international budget experts agree that the 2005 mix of
spending and tax cuts will not keep Italy's deficit under the
EU ceiling. Facing this situation, the GOI will need to turn


to extraordinary austerity measures. END COMMENT.

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2005ROME00469 - Classification: UNCLASSIFIED