ITALY-RUSSIA SUMMIT HIGHLIGHTS EVER STRONGER

C O N F I D E N T I A L SECTION 01 OF 03 ROME 001409

SIPDIS

E.O. 12958: DECL: 12/22/2019
TAGS: PREL ENGR PGOV OSCE NATO AF RS IT EUN
SUBJECT: ITALY-RUSSIA SUMMIT HIGHLIGHTS EVER STRONGER
BILATERAL TIES

Classified By: Political Minister Counselor Barbara Leaf for Reasons 1.
4 (B) and (D)

SUMMARY
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1. (SBU) MFA officials view the December 3 summit between
PM Berlusconi, Russian President Medvedev and numerous
cabinet minsters a showcase for the bright future of
Italian-Russian relations. Historically strong economic,
political and cultural ties between Italy and Russia were
reinforced by the signing of 8 intergovernmental agreements
and 10 contracts among private companies. FM Frattini
stressed that Russia is an essential partner in guaranteeing
Europe's security and achieving international stability and
that Medvedev's European security proposals would be closely
studied by the GOI and other EU governments. At an
Italy-Russia Forum for Dialogue preceding the Summit,
journalists, academics, and political, business, and civil
society leaders discussed enhancing cultural, political and
economic cooperation. End summary.


RUSSIA ESSENTIAL TO EUROPEAN SECURITY AND INTERNATIONAL
STABILITY
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2. (C) In the aftermath of the December 3 Russia-Italy
summit, MFA Russia Desk Political Advisor Fabio Cristiani
told us that the GOI had not begun to assess the Russian
Draft European Security treaty, the so-called Medvedev
proposals. In his view, the era of Russian isolation is over
and it is inevitable that Russia will draw closer to Europe,
especially Italy, Germany and France. He noted, however,
that it would be illogical to expect NATO to change according
to Russian expectations or conditions. Cristiani questioned
whether Russia currently has the means to improve its
security structure or defense. Commenting on Article 1 of
the Treaty, Cristiani said it seems directed at NATO and
implies that Russian security is inextricably linked to that
of all NATO countries. While Article 8, in seeming
contradiction, suggests (paragraph 1) that Russia wants to be
protected from NATO; an apparent allusion to Russia's NATO
enlargement bugbear. In Cristiani's view, Paragraph 2 implies
Russia wants to condition NATO, but simultaneously be
protected by it, a plausible position given the dire state of
Russia's economy. Cristiani noted that Berlusconi did not
discuss the draft security proposals in his meeting with
Medvedev, but he voiced his expectation the draft Treaty
would be a major focus of NATO, the EU, and the OSCE in the
coming year.


SUMMIT CONTEXT ENHANCES BUSINESS DEALS' SIGNIFICANCE
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3. (C) MFA Russia Desk Director Roberto Orlando told us
that the agreements signed between private sector companies
gained added importance by being concluded at an official
GOI-GOR summit and that while the Summit merely confirmed the
existing excellent state of GOI-GOR relations, the media
impact in Italy and Russia was significant. He noted that in
Russia there were even complaints that too many ministers
were gone all at once.


4. (C) Stressing that he did not know details of the
agreements between private sector companies and ministries,
Orlando mentioned that Finmeccanica had signed an agreement
with the Russian Ministry of Transportation on implementing
(non-military) security in Russian firms, and one on
producing cars for the St. Petersburg tram system. Italian
banks Intesa San Paolo and Mediobanca signed agreements with
Russian Vneshtorg Bank to develop SMEs and finance industrial
projects. Alitalia-Aeroflot signed a codesharing agreement
in which Alitalia will support Aeroflot flights to South
America, while Aeroflot will do the same for Alitalia flights
to Asia.


5. (C) During the Summit, Eni,s CEO Paolo Scaroni and
Gazprom,s Chairman Alexey Miller also signed an agreement
for the formal entry of France,s EdF into the South Stream
gas project. An Eni press statement said the agreement was
signed in the presence of Russian President Medvedev and

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Italian PM Berlusconi. At a separate December 10 meeting with
the Ambassador and DCM, Scaroni described it as an agreement
in principle. He said that the details over EdF,s
participation in South Stream, such as the percentage of its
participation and any additional conditions, will be worked
out in the next few months. Scaroni added that South Stream
will be a costly project and estimated that the Black Sea
portion of the pipeline alone will cost 14 billion (Note: It
was not clear if he meant Euros or Dollars). Nevertheless, he
indicated that despite the high cost Gazprom had the means of
financing South Stream. Scaroni explained that Gazprom
extracts gas at a cost of 5 Euros per cubic meter and sells
it in Europe for 200 Euros per cubic meter. He said that
Gazprom will pay for South Stream with these gas profits.
Scaroni stated that EdF,s participation in South Stream was
the only agreement signed by Eni during the Italy-Russia
summit.


6. (C) An MOU between the Italian and Russian Justice
ministries outlined exchange activities, including GOI
assistance to Russia in fighting organized crime and
increased information sharing. In preparation for
Italian-Russian Culture Year 2011, the ministers of culture
signed an agreement planning for exchanges, exhibitions and
promotion of Russian and Italian language study in each
country's schools and universities. The agreement also
provided for mutual recognition of of university degrees and
qualifications. Orlando noted that Russian Defense Minister
Serdyukov did not attend the Summit and that Italian Economy
and Finance Minister Tremonti was the only minister present
who did not sign an agreement with his Russian counterpart.


FORUM FOR DIALOGUE HIGHLIGHTS COOPERATION
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7. (C) A December 2 "Italy-Russia Forum for Dialogue"
convened Italian and Russian business, civil society, and
religious leaders, as well as journalists, academics, and two
Russian regional government leaders. Three panels discussed
"Political cooperation in the common European space,"
"Economic cooperation and opportunities after the crisis" and
"Cultural cooperation." FM Frattini introduced the political
cooperation panel; the economic presentations concluded with
remarks by Confindustria President Emma Marcegaglia, Economic
Development Minister Scajola and Russian Minister of Industry
and Commerce Khristenko. Culture Minister Bondi and
Education Minister Gelmini addressed the cultural cooperation
panel which focused on the role of universities, media, and
the Churches in EU integration.

FRATTINI PLUGS FOR POLITICAL STRATEGIC RELATIONSHIP
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8. (C) Beginning his remarks by rhetorically asking why PM
Berlusconi expends so much energy on relations with Russia,
Frattini answered his own question the simplistic, mistaken
response was economic interests. Noting that the world was
becoming too Asia-Pacific oriented, Frattini characterized
Russia as an indispensable political interlocutor for
achieving international strategic stability and urged
Europeans to be more "ambitious in inviting Russia to be
more ambitious." Frattini called on all 27 EU countries to
"coalesce around advancing an EU-Russian strategic agreement"
in the coming year and also to establish EU-Russia free trade
and visa-free zones.


9. (C) Frattini noted that the Obama administration's
"reset" of U.S.-Russia relations had opened a window of
opportunity which Italy strongly supported. Furthermore,
NATO regards Russia as a partner, not an adversary, in
combating terrorism, meeting challenges in Afghanistan, and
convincing Iran to accept changes in its nuclear program.

COMMENT
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10. (C) The Summit and Forum for Dialogue were given ample
media coverage, highlighting to the Italian and Russian
publics the strength of cooperation between the two
governments. On the other hand, from what we know about the
agreements signed, many details of their implementation still
need to be worked out. On Medvedev's draft security

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proposals, Italy is unlikely to form a position in favor of
or against any of them except in close consultation with its
NATO and EU colleagues. Frattini has been careful to
underline that, however interesting or welcome, Russian
security proposals cannot supplant existing NATO and OSCE
structures. End comment.
THORNE