(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. -------------- G-8 Presidency/ London Summit -------------- ¶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. -------------- 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. -------------- Middle East -------------- ¶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. -------------- Iran -------------- ¶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 -------------- Ambassador Castellaneta Giuseppe Perrone, Embassy Notetaker CLINTON