SCENESETTER: YOUR MEETING WITH ITALIAN FM FINI

C O N F I D E N T I A L SECTION 01 OF 04 ROME 000173 SIPDIS E.O. 12958: DECL: 01/18/2016 TAGS: CVIS IT PGOV PREL ITALY NATIONAL ELECTIONS IRAQI FREEDOM ITALIAN POLITICS AFGHANISTAN UN SUBJECT: SCENESETTER: YOUR MEETING WITH ITALIAN FM FINI Classified By: AMBASSADOR RONALD P. SPOGLI, FOR REASONS 1.4(b) and (d) Summary -------------- ¶1. (C) This meeting is an opportunity for FM Fini and the Berlusconi government to showcase Italian foreign policy successes in advance of April elections. Fini will want to show the public that Italy's engagements abroad have advanced its national interests, enhanced its international standing, and earned America's respect. The visit comes as those external commitments, especially in Iraq, face considerable domestic criticism and growing budgetary pressures. They have also earned Italy the attention of international terror organizations like al-Qa'ida. Even so, Fini has been a consistent advocate of activism, and recently adopted a very tough public line on Iran notwithstanding Italy's commercial stake there. This all means the public aspects of the Fini visit will be very important. The foreign minister will want public US recognition of Italy's contribution not only to security and stability in Iraq, but also in Afghanistan, the Balkans, and the global war on terror. ¶2. (C) Besides our public message, we should urge enhanced Italian contributions to training and democracy promotion in Iraq, welcome the prospect of an Italian-led PRT, and assure close coordination as we adjust troop levels. It will be an opportunity to press Fini for a stepped-up investment in Afghan stability at the upcoming London conference. He has flagged his interest in reviewing coordination of next steps in Kosovo and Serbia-Montenegro. Other issues on his mind will include UN reform, how to work with Russia/Putin, and Italy's desire for more Italian candidates to encumber high-visibility international positions. Fini doubles as deputy prime minister and sees himself as Prime Minister Berlusconi's political successor. This trip will have the ancillary benefit, just ten weeks before elections, of burnishing his credentials as a future aspirant to the prime ministership and as an international player. End Summary. Italian Elections -------------- ¶3. (C) Italian elections are scheduled for April 9. As head of the National Alliance Party, Fini is part of PM Berlusconi's Center-Right alliance, which is currently trailing slightly in the polls in a race that is at present too close to call. Fini is increasingly seen as the Center-Right,s heir apparent, and is generally considered the number 2 figure in the Center-Right after the PM. His visit to Washington will play significantly into his campaign effort back home. Strongest Ally in Continental Europe.... -------------- ¶4. (C) As FM, Fini has presided over a period of unprecedented Italian leadership in foreign policy, and he will seek a statement of support on shared values for our freedom agenda and praise for Italy's substantial overseas engagements. In addition to being the third largest contributor of troops to MFN-I, and leading three of four training modules in NTM-I, Italy also funds reconstruction projects in Iraq and is interested in leading a PRT there. In Afghanistan, Italy currently commands ISAF and leads the Herat PRT and justice sector reform. In the Balkans, Italy recently took over KFOR and EUFOR commands. Rome pledged DOLS 3 million to the UN Fund for Democracy, indicated it will fund the new Foundation for the Future, co-hosts the Democracy Assistance Dialogue with Turkey and Yemen, and provided earthquake and hurricane relief for Pakistan and New Orleans. ... without a Corresponding Policy Voice... -------------- ¶5. (C) Despite Italy's record of foreign policy leadership under the Berlusconi Government, the Italians feel that they are not taken seriously as a first-tier European power, especially by their EU partners, and despite pulling more weight on some key international issues than either France or Germany (Iraq being a case in point). Failure to gain EU and US support for the Italian candidates for High Representative in Bosnia and Vice-Chair of the OECD Working Group on Bribery in International Business Transactions has rankled in Rome. They see such support as concrete recognition that Italy,s investments abroad have advanced the country's interests, enhanced its prestige, and earned the respect of friends and allies. ...and Increasing Budgetary Pressure -------------- ¶6. (C) The pressure to show results is especially keen in view of Italy's budget pressures. High public debt, the EU Stability and Growth Pact deficit ceiling, rising social welfare costs and a stagnant economy are limiting Fini's ability to continue to argue for an increased, or at the very least, sustained international presence in global hot spots. Failure to address economic reform will be this government's biggest domestic liability going into the elections and could allow the opposition to argue that Italy's overseas commitments are not in the financial interests of the country. The current budget foresees a 27% reduction in overseas economic assistance, and large cuts (to about 0.90% of GDP) in the defense budget, including a 20% reduction in the peacekeeping budget. Terrorism -------------- ¶7. (C) One important constant has been Italy's steadfastness in the war against terror, especially law enforcement cooperation. It worked closely with the UK in extraditing a suspect in the failed July 21, 2005 London bombing and with Spanish authorities in their investigation of the Madrid bombings. Its role in Iraq and Afghanistan has earned it threats by Al-Qa,ida on the eve of next month's 2006 Winter Olympics in Turin and national elections in April. It has established an inter-Ministerial Financial Security Committee (FSC). And while it lacks a national law that allows the unilateral freezing of assets of terrorist groups and individuals, Italy is second only to the United States in the number of names contributed to the UNSC 1267 Committee for asset freeze. A law before Parliament would approve a mechanism for freezing non-financial assets of terrorists, which would be a welcome, precedent-setting event within the EU. Iraq -------------- ¶8. (C) The GOI,s most controversial position is support for the US-led coalition in Iraq. The center-left opposition has capitalized on the domestic unpopularity of the war to advance its election campaign. Fini will want to show the wisdom of the GOI decision to support the U.S. in Iraq. He and PM Berlusconi speak in terms of a "strategy for success" in Iraq, and they will seek by this visit to reassure the Italian public that the U.S. considers Italy a key partner in establishing stability and security. We should urge enhanced Italian contributions to training and democracy promotion, welcome the prospect of an Italian-led PRT, and promise close coordination as we adjust troop levels. On January 19 the US, UK and Italy will have held trilateral meetings on Iraq in Rome. Iran -------------- ¶9. (C) The GOI shares U.S. and EU concern over Iran's nuclear aspirations and the anti-Israel rhetoric coming out of Tehran. Both Fini and Berlusconi issued sharp public rejoinders after President Ahmadinejad's declarations against Israel. Fini warned Iran it could not divide the international community on the nuclear issue. But Italy has been restive about its exclusion from the EU3 negotiations with Iran because, as Iran's largest trading partner in Europe, it feels has a significant role to play in influencing Tehran. According to the Italian press, he suggested injecting EU High Rep for Foreign Policy Solana into EU talks, not only to to give them more weight, but also to end the EU-3,s monopoly. We should commend Fini's public stance, and reinforce with him the importance of maintaining a solid international front. Afghanistan -------------- ¶10. (C) Fini's visit comes just a week ahead of the Afghanistan Compact conference in London. Unlike Iraq, Italy's ISAF participation enjoys bipartisan political support, and the MFA has fenced off economic assistance to Afghanistan from cuts falling heavily elsewhere. That said, even with a smaller pie, Fini could probably do more to increase Italy's contribution to the post-Bonn reconstruction process. As Deputy Prime Minister, he is reluctant to advocate strongly for the foreign ministry in interagency negotiations over resources. Special Afghan Envoy Anna della Croce thinks only a direct U.S. appeal to Fini for more assistance could induce additional Italian funding at the London conference. Also, Italy feels its commitment in Afghanistan should merit a seat on the Afghanistan coordinating Council. Balkans -------------- ¶11. (C) The Italians have been engaged in peacekeeping and stability efforts in the former Yugoslavia since the early 1990s. They consider the Western Balkans their backyard and insist on playing a major military and policy role. They currently hold the command of KFOR and EUFOR. Their recent unsuccessful attempt to place an Italian as High Representative in Bosnia was seen by the GOI as an indication that neither the major EU powers nor the U.S. have sufficient faith in the GOI to lead the international community in the region. Fini flagged in his recent letter to you his interest in reviewing his recent visit to Kosovo and Serbia-Montenegro. He sees a need for a common international approach regarding next steps in Kosovo. Syria/Lebanon -------------- ¶12. (C) Italy has acquiesced to our requests to refrain from engaging in high-level meetings with Syrian officials, twice canceling planned visits of President Assad. However, MFA officials continue to stress that, as a country with strong ties and a good relationship with Syria, Italy can play a useful role in sending the Syrians strong messages and showing them that it is the international community -- and not just the U.S. -- that is pushing for full compliance with UNSCR 1559. Italy pushed hard to be a member of the "Core Group" on Lebanon, as Lebanon's largest trading partner and biggest source of aid. Middle East -------------- ¶13. (C) In a successful effort to overcome the stigma of his party's fascist history, Fini has made four trips to Israel in three years. Under the Berlusconi government, Italy has taken a much more balanced approach to the Arab-Israeli conflict and has worked for the EU to do the same. During its 2003 Presidency, Italy successful led the EU to designate Hamas as a terrorist organization, and it has been vocal in its opposition to anti-Israel resolutions in the UN. This has not only improved relations with Israel but engendered more Italian engagement. PM Berlusconi continues to advocate a "Marshall Plan" for the Palestinian territories and has offered to host resumed Israeli-Palestinian negotiations in Erice (Sicily). Italy provided one of its most senior Carabinieri officers to lead EU monitoring of the Gaza border crossing at Rafah. Fini will want to review the situation in Gaza, and hear US views on next steps in the peace process and the outlook for post-Sharon Israel. UN Reform -------------- ¶14. (C) On UN Reform, Italy has made our agenda its agenda, vocally and with Fini's strong support. Although the UNSC expansion debate has cooled for now, the possibility of Germany eventually obtaining a permanent seat is still a major concern for Italy. The Berlusconi government sees this as a matter of national dignity. In a world where the UK, France and Germany all sat at the UNSC table, Italy feels it would be permanently relegated as a second-class EU power. The GOI therefore regularly seeks assurances that we do not support a permanent UNSC seat for Germany, and requests that we keep Italy apprised of developments in our views on UNSC reform. Transatlantic Relations/NATO/Russia -------------- ¶15. (C) Fini is a firm believer in the transatlantic link; his own pro-Americanism is reflected by the close ties between his Allianza Nazionale party and the Republican Party in the US. Fini,s views on NATO accord with ours: he supports Alliance transformation, out of area deployment, and enhanced political consultations among Allies. Fini will be glad to discuss ways the US and Italy can work together to make NATO more effective. NATO enlargement to Albania, Macedonia and Croatia is an Italian priority; Italy very much wants those countries to be offered NATO membership in 2008 and will be receptive to suggestions as to how Italy might help secure that result, as well as to ideas to encourage those three aspirants to continue taking the steps needed to qualify. The NATO-Russia Council was established in Rome in 2002, and the Italians believe that closer working relations between Russia and the Alliance are essential for European security and stability. PM Berlusconi feels he has a special relationship with President Putin. Your meeting with Fini is an opportunity to tell Italy what the US thinks about how best to manage Russian misbehavior and to encourage Russia to improve. SPOGLI