(U) Deputy Secretary Steinberg's March 6, 2009

S E C R E T STATE 032091


NOFORN

E.O. 12958: DECL: 03/04/2019
TAGS: OVIP STEINBERG JAMES PREL KPAL IT IR NATO
AF, PK, IS, LE
SUBJECT: (U) Deputy Secretary Steinberg's March 6, 2009
meeting with Italian Ambassador Giovanni Castellaneta

CLASSIFIED BY EUR ASSISTANT SECRETARY DANIEL FRIED FOR
REASON 1.4 (D)



1. (S) SUMMARY: In Deputy Secretary Steinberg's March 6
meeting with Italian Ambassador Castellaneta,
Castellaneta stressed that Italy was very interested in a
close, consultative relationship with the United States,
similar to what Washington has with the UK, France, and
Germany. He listed four areas where Italy was
particularly interested in coordinating with the USG:
Italy's G-8 Presidency, Iran, the Middle East, and
Afghanistan/Pakistan. Deputy Secretary Steinberg
commented on USG expectations for the London Summit and
the potential obstacles to engagement with Iran. END
SUMMARY.

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G-8 Presidency/ London Summit
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2. (SBU) Amb. Castellaneta described Italy's strong
desire to coordinate closely with the USG and explained
that the series of events planned for the July 8-10 La
Maddalena Summit would comprise more than the classic G-
8, laying out Italy's plans to deepen the involvement of
the Outreach 5 countries (India, Brazil, South Africa,
Mexico, China) plus Egypt. Castellaneta described this
year as an opportunity to move from one kind of G-8 to a
new phase. Noting that both he and Castellaneta
previously served as Sherpas, Steinberg recalled that the
Naples 1994 G-7/G-8 was similar in that the new role for
Russia was agreed upon in that venue.


3. (SBU) The Ambassador added that Italy did not want
the G-8 to compete with the G-20, but thought that the
July summit might provide an opportunity for follow up
from the London Summit (with the hope that a global
economic recovery might begin in the summer). In
response to the Ambassador's recounting PM Berlusconi's
comments that being overly pessimistic did not help bring
recovery, Deputy Steinberg countered that unrealistic
optimism was not useful either. At the G-20, the leaders
needed to demonstrate meaningful and concerted effort to
reassure publics and markets, including on stimulus,
banking, trade and finance, and emerging economies.

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Afghanistan/Pakistan
--------------


4. (C) Castellaneta told the Deputy Secretary about the
newly named Special Envoy on Afghanistan and Pakistan,
Ambassador Massimo Iannucci, who planned to meet soon
with Special Representative Holbrooke to contribute to
our strategic review. (Note: The Holbrooke-Iannucci
meeting subsequently took place on March 11. End Note.)
Castellaneta listed the removal of caveats, the planned
increase in number of troops allowed/funded by parliament
to 2,800 (with approval of 3,000 expected for the
elections),and military and intelligence cooperation as
ways Italy could do more in Afghanistan. The Deputy
Secretary emphasized the importance of planning how to
use the Italian-hosted June 26 Trieste Afghanistan
ministerial as a follow-on to the planned March 31 UN
meeting in The Hague, and the need to emphasize the
civilian dimension in Afghanistan and address Afghanistan
and Pakistan in an integrated manner.

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Middle East
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5. (S/NF) Castellaneta claimed Italy was Israel's
greatest friend and supporter in Europe, with traditional
links to the Palestinian Authority also. He stated
Israel had approached Italy to potentially replace Turkey
as an intermediary in talks with Syria. Italy also
played a role in Lebanon, with Israel using Italy as a
channel of communication with the Lebanese. Italy served
as co-sponsor of the Gaza reconstruction conference and
pledged 100 million dollars. Berlusconi had called for a
Marshall Plan for Gaza, but Hamas had complicated the
proposal.

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Iran
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6. (C) Stating that Italy could play a big role on Iran,
Castellaneta informed the Deputy Secretary that although
FM Frattini had postponed his trip to Iran due to hateful
statements by that country's leadership, Italy was
interested in exploring a way to engage Tehran on
Afghanistan at the June Trieste ministerial. Iran had
common interests in Afghanistan in combating drug
trafficking and countering the Taliban, but Italy would
treat cooperation on Afghanistan separately from the
nuclear issue.


7. (C) The Deputy Secretary told Castellaneta the United
States hoped to consult more closely with Italy on how to
engage Iran, but not merely for engagement's sake; the
Iranian leadership's deeply troubling rhetoric made
dialogue with Iran complicated. Both agreed that Iran's
Arab neighbors were very preoccupied with Iran's regional
role. The Deputy Secretary emphasized the need to avoid
the appearance of rewarding Iran's bad behavior, such as
its support for Hamas and Hezbollah.

Participants in the Meeting:

United States
--------------
The Deputy Secretary
D(S) Staff - Amy Scanlon
EUR/WE - Chris Jester (notetaker)

Italy
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Ambassador Castellaneta
Giuseppe Perrone, Embassy Notetaker


CLINTON