SCENESETTER FOR ITALIAN MINISTER CLAUDIO SCAJOLA'S VISIT TO WASHINGTON

C O N F I D E N T I A L SECTION 01 OF 03 ROME 001048



NOFORN

SIPDIS



DOE FOR ENERGY SECRETARY CHU

DOE FOR A/S DAVID SANDALOW

DOE FOR INTERNATIONAL ENERGY COOPERATION DAS YOSHIDA

DOE FOR OFFICE OF NUCLEAR ENERGY DAS MCGINNIS

DOC FOR ENERGY, ENVIRONMENTAL INDUSTRIES OFFICE SARAH LOPP

STATE PASS TO USTR



E.O. 12958: DECL: 09/11/2019

TAGS: ECON, ENRG, IT

SUBJECT: SCENESETTER FOR ITALIAN MINISTER CLAUDIO SCAJOLA'S

VISIT TO WASHINGTON



REF: A) ROME 878 B) ROME 678 C) ROME 283 C) 08 ROME

1191



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Classified By: A/DCM Barbara Leaf for reasons 1.4b and d



1.(C/NF) SUMMARY: Italian Economic Development Minister

Claudio Scajola will visit Washington September 29 as part of

a week-long tour of the United States. Scajola is one of

Italy's most powerful cabinet officers. He and his staff have

told us that they consider this a very important visit. The

key event will be a September 29 meeting with Energy

Secretary Chu. At this meeting Scajola hopes to sign

agreements on research and development and on industrial

cooperation on nuclear power. Scajola's visit is an

excellent opportunity to promote and protect the rights of

U.S. firms that wish to participate in Italy's multi-billion

dollar nuclear power project. This is also an opportunity for

us to push for greater Italian cooperation on European Energy

Security, and to ask for Scajola's support for the launch in

Italy of DoE's Megaports (radiation detection in container

ports) program. The Italian delegation is also seeking a

meeting with USTR Kirk and hopes to raise several

economic/commercial issues. Given the importance that GOI

officials are attaching to Scajola's trip, and its potential

for advancing key pieces of our bilateral agenda, post urges

Washington agencies to assist the Italian Embassy in making

sure that the visit proceeds smoothly. End Summary





SCAJOLA TO THE U.S.

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2. (C/NF) On September 27, Claudio Scajola, Italy's Minister

for Economic Development, will travel to the United States.

Scajola's long-planned and several times delayed trip comes

in part as a follow-up to his meeting in Rome this Spring

with U.S. Energy Secretary David Chu (at the G8 Energy

Ministerial). Scajola, a long-time collaborator of Prime

Minister Silvio Berlusconi, heads what amounts to a

super-ministry in the GOI. Although his title is Minister

for Economic Development, his portfolio does not include

overseas development assistance. Instead, he has

responsibility for a very wide range of Italian economic and

commercial activity, including telecommunications, energy,

trade, and intellectual property rights. He is Italy's de

facto Energy Minister.



MEETING AT DOE WITH SECRETARY CHU

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3. (C/NF) The centerpiece of Scajola's visit will be his

September 29 call on Secretary Chu. Scajola's staff

frequently remind us of the high regard in which Scajola

holds Secretary Chu. Scajola believes that Chu's May visit to

Rome marked the beginning of a warm professional friendship;

Scajola clearly sees this visit to Washington as a

reciprocation of Chu's May visit. In Washington Scajola hopes

to sign a Research and Development agreement that has been

under discussion for some time, and a new "Industrial

Cooperation Agreement" on nuclear power that Scajola first

proposed during his May 2009 bilateral meeting with Secretary

Chu.





RESEARCH AND DEVELOPMENT AGREEMENT

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4. (SBU) The research and development agreement has been

under discussion for some time. We understand, however, that

requested Italian revisions and the possible need for EURATOM

approval could scuttle chances for a September 29 signing.

On 8 September Scajola's staff told us that they consider it

very important for this agreement to be signed on September

29. (COMMENT: In terms of U.S. interests, we think the

Industrial Coopertion agreement is more important than the

R&D agreement. We also think that while Scajola would like

to sign both, staff claims notwithstanding, he too is more

interested in the Industrial Cooperation agreement.)



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INDUSTRIAL COOPERATION AGREEMENT

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5. (C/NF) Since his appointment in Spring 2008, Scajola has

been leading the charge in Italy for a return to nuclear

power. USG efforts to promote and protect the interests of

U.S. firms in this multi-billion dollar project suffered a

major blow in February 2009 when Italy announced an

Italo-French agreement that would allow French firms to build

the first four of Italy's new nuclear reactors. At their May

2009 bilateral meeting in Rome, Scajola seemed to pre-empt

Secretary Chu's expected call for a level playing field by

offering to negotiate a like agreement with the U.S.

Secretary Chu agreed to work out such a deal, and DoE staff

have been working with the Italian Embassy in Washington on

text with the aim of signing it on September 29.



6. (C/NF) We have recently seen indications that Scajola has

another reason for supporting the involvement of U.S. firms

in Italy's re-nuclearization. The Franco-Italian agreement

had the effect of denying opportunities to Italian firms that

hoped to help build the new plants. One of these firms,

Ansaldo Nucleare, has close ties to Westinghouse, one of the

U.S. firms most interested in obtaining Italian contracts.

Ansaldo Nucleare and Westinghouse are expected to formally

announce a consortium agreement in Washington on September

29. Ansaldo Nucleare is based in Scajola's home region of

Liguria. So if Westinghouse gets a piece of the action,

Ansaldo -- Scajola's hometown company -- benefits.

(COMMENT: We need all the help we can get in our advocacy

efforts for U.S. firms. If Scajola also has a local interest

in seeing U.S. firms obtain contracts, that is an advantage

we should seize and maximize to U.S. benefit.) Scajola's

visit represents a critical opportunity to get this

Industrial Cooperation agreement signed. A failure to secure

this agreement is likely to make it significantly more

difficult for U.S. firms to win contracts in Italy's

substantial nuclear power project.





EUROPEAN ENERGY SECURITY

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7. (C/NF) Prime Minister Silvio Berlusconi's close personal

ties with Vladimir Putin and the very strong corporate ties

between Italian energy parastatal ENI and Russia's Gazprom

often put Italy squarely at odds with U.S. and EU energy

security efforts. Italy's energy policy too often reflects

Russian, rather than European, priorities. For example, the

Italian government is deeply ambivalent about the EU's

Nabucco Caspian pipeline, and ENI is poised to help GAZPROM

construct Black Sea and Baltic Sea pipelines that will only

deepen EU's dependence on Russia. ENI, 30 percent owned by

the Italian Government, often appears to dictate GOI energy

policy and uses its influence, through the GOI, to block EU

energy market liberalization plans. Italy is taking some

steps in the right direction: In addition to the nuclear

power effort, one of the Caspian "Southern Corridor"

projects, the proposed Turkey-Greece-Italy (TGI) pipeline

will be built by an Italian company. Liquid Natural Gas

projects promise further diversification. It would be

helpful if during his time in Washington, Minister Scajola

were to hear in clear terms our long-standing concerns about

European energy security. He should be reminded that we hope

Italy will support European efforts to diversify energy

sources, types and routes, particularly through the "Southern

Corridor" projects -- including Nabucco -- intended to bring

alternative Caspian gas to the EU. COMMENT: Scajola is more

concerned about and active on energy security issues than any

other senior member of the GOI, so we would be preaching to

the choir here. This would, however, give Scajola useful

ammunition to bring home: a strong message to PM Berlusconi

in particular that Washington is concerned about Italy's

energy security actions.



MEGAPORTS

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8. (C/NF) Post has been working for several years to convince

the Italian government to support the launching in Italy of

DoE's Megaports program, an effort that would put radiation

detectors in key shipping ports. Because of the strong

influence of organized crime in Italian ports, it is

especially important that this program be implemented in

Italy. Unfortunately, Italian officials continue to drag

their feet. To break this impasse, it is critical at this

point for Secretary Chu to solicit Scajola's advice and

support in getting Megaports launched in Italy.



POSSIBLE ISSUES FOR USTR

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9. (SBU) On 8 September the Italian Ministry of Foreign

Affairs gave us a preview of other issues that Scajola may

raise in Washington. The Italians are seeking a meeting with

USTR Kirk, but we understand that meeting has not been

confirmed as of yet. If the Italian delegation does have an

opportunity to raise economic/commercial concerns, we are

told that they would include: "Buy American" issues,

anti-dumping actions affecting Italian pasta, U.S. customs

treatment of Italian gold jewelry, Italian concerns regarding

certain Cuba-related certifications affecting trade in

nickel, and Italy's interest in participating in railroad

infrastructure projects in the United States.





PLANNING CONCERNS

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10. (C/NF) Post has picked up on what appear to be some

organizational problems with regard to this visit at the

Italian Embassy in Washington. This may be the result of

summer-time staffing gaps there. Scajola's fear-based

management style may also be a factor. Given the number of

key U.S. interests that will be affected by the visit, We ask

that Washington agencies, especially State, DoE, and USTR,

work closely with the Italian Embassy in an effort to smooth

the way for this visit. Scajola has a reputation for being

proud, demanding, and protocol conscious.



COMMENT

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11. (C/NF) Scajola's visit provides us with significant

opportunities to make progress on a wide variety of U.S.

interests. We could bolster the position of U.S. firms

seeking opportunities in the multi-billion dollar Italian

nuclear project, make progress on Italy's problematic energy

security policies, and perhaps even get Megaports going in

Italy.

THORNE