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
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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
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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....
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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...
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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
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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
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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
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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
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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
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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
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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