VZCZCXRO5773
OO RUEHPOD
DE RUEHRO #0697/01 0950958
ZNR UUUUU ZZH
O 050958Z APR 07
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7615
INFO RUCNMEU/EU INTEREST COLLECTIVE PRIORITY
RUEHGB/AMEMBASSY BAGHDAD PRIORITY 0281
RUEHLB/AMEMBASSY BEIRUT PRIORITY 0280
RUEHBUL/AMEMBASSY KABUL PRIORITY 0356
RUEHFR/AMEMBASSY PARIS PRIORITY 2236
RUEHFL/AMCONSUL FLORENCE PRIORITY 2301
RUEHMIL/AMCONSUL MILAN PRIORITY 8535
RUEHNP/AMCONSUL NAPLES PRIORITY 2451
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0730
RUEHRO/ODC ROME IT PRIORITY
RHMFISS/HQ USEUCOM VAIHINGEN GE PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY 4506

UNCLAS SECTION 01 OF 03 ROME 000697 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/WE; EUR/ERA; EB/IFB/OMA 
USAID/COO/ODP/BMD FOR O'MEARA 
PARIS ALSO FOR USOECD 
USEU BRUSSELS FOR PATRICIA LERNER/USAID 
 
E.O. 12958: N/A 
TAGS: ECON EAID EFIN PREL PGOV IR LE AF IT
SUBJECT: ITALIAN FOREIGN ASSISTANCE IN 2007: AFRICA AND 
WOMEN'S ISSUES EMPHASIZED, MODEST ASSISTANCE TO THE MID-EAST 
 
REF: 06 ROME 1870 
 
ROME 00000697  001.2 OF 003 
 
 
SUMMARY 
-------- 
 
¶1.  (SBU)  Italy's 2007 budget included 1.88 billion euros 
(0.12 percent of GDP) for foreign assistance, a slight 
increase from 1.81 billion euros in 2006.  The Ministries of 
Foreign Affairs and Finance disburse most assistance funding. 
 MFA's Office of Development Cooperation (ODC) -- Italy's 
USAID equivalent -- saw its 2007 budget increase to 607 
million euros, primarily to pay UN back dues, the funding for 
which the Berlusconi government had drastically cut in 2006. 
ODC's stated priorities are to promote development in Africa 
and women's issues. 
 
¶2.  (SBU)  On March 27, Parliament approved an additional 
75.5 million euros of foreign assistance for Afghanistan, 
Lebanon, and Sudan.  While ODC leadership has said its 
development work in Iraq is "finished," Parliament allocated 
30 million euros for Iraqi reconstruction assistance on March 
¶27.  Italy and Iraq also signed in January 2007 a cooperation 
treaty providing a credit line of 400 million euros for 
infrastructure development.  The MFA Iraq Task Force, which 
currently oversees Iraqi development assistance, will turn 
over the Iraq aid portfolio to ODC January 2008.  End summary. 
 
GOI FOREIGN ASSISTANCE OVERVIEW 
------------------------------- 
 
¶3.  (SBU)  Italy's Parliament approved 1.88 billion euros for 
foreign assistance in 2007 (0.12 percent of GDP -- or 0.13 
percent of GDP, when we include the additional 105.5 million 
euros Parliament approved March 27), slightly higher than the 
2006 amount of 1.81 billion euros.  This is the first time 
since 1992 that the GOI has not decreased foreign assistance 
from the previous year.  (Note:  In 1992, then-PM Giuliano 
Amato drastically cut MFA's foreign assistance budget, 
because of allegations of ODC corruption and mismanagement.) 
Nonetheless, Italy's foreign assistance funding is still well 
below the 2007 EU member state commitment of 0.33 percent of 
GDP and the 2009 EU member state commitment of 0.7 percent of 
GDP. 
 
¶4.  (U)  Parliament directed most 2007 foreign assistance 
funding to the Ministries of Foreign Affairs (MFA) and 
Finance (MOF), at 1.011 billion euros and 501 million euros, 
respectively. 
 
GOI Ministries' Foreign Assistance 
Budgets 2006-2007 (millions of euro) 
------------------------------------ 
 
                      FY    FY     Chg.    Chg. 
                     2006  2007    Pct    Value 
 
Foreign Affairs      862   1011     17     149 
Finance              597    501    -16     -96 
Defense              140    154     10      14 
Environment           96     97   0.01       1 
Economic Development  67     67      0       0 
Health                32     32      0       0 
Interior              11      9    -18      -2 
Communications         5      6     .2       1 
University/Research   NA      3     NA      NA 
Agriculture          0.5    0.9     80     0.4 
Justice              0.6    0.6      0       0 
 
¶5.  (SBU)  Of the over one billion euro MFA funding, 
Parliament allocated 607 million euros to ODC for development 
assistance.  (Comment:  The remaining MFA "foreign 
assistance" budget of over 400 million euros is to maintain 
diplomatic missions abroad and cover costs associated with 
foreign assistance administration.)  The foreign assistance 
 
ROME 00000697  002.2 OF 003 
 
 
budgets of the Ministries of Defense, Finance, Environment, 
and Health are largely channeled to international 
organizations, e.g., World Bank, NATO, and WHO. 
 
PROTEZIONE CIVILE 
----------------- 
 
¶6.  (U)  In addition to the 1.88 billion euros for 2007, 
Parliament budgeted 1.5 billion euros to Protezione Civile. 
(Note:  Besides managing domestic disaster relief, Protezione 
Civile provides emergency assistance abroad.)  Protezione 
Civile is under the mandate of the Prime Minister's office 
and has a large operating budget and some foreign disaster 
assistance funding.  Once Parliament declares an emergency, 
however, Parliament empowers Protezione Civile to ask all 
government ministries for resources. 
 
FOREIGN ASSISTANCE FROM THE REGIONS 
----------------------------------- 
 
¶7.  (U)  Italy's twenty regions also provide foreign 
assistance, though according to MFA contacts, the total 
amount (around several million euros per year) is "tiny," 
compared to the GOI's national foreign assistance budget. 
Italy's regions are required by law to inform the MFA and MOF 
of any international assistance activity they conduct with 
foreign governments.  While regions can carry out foreign 
assistance programs independently, regions often coordinate 
with the MFA. 
 
MFA FOREIGN ASSISTANCE PRIORITIES 
--------------------------------- 
 
¶8.  (SBU)  MFA's Office of Development Cooperation (ODC) -- 
Italy's equivalent to USAID -- saw its 2007 budget increase 
to 607 million euros over 499 million euros in 2006.  ODC 
Director General Alain Economides said March 14 that Africa 
and women's issues are MFA foreign assistance priorities 
under PM Prodi's government.  (Note:  ODC priorities had 
focused on development assistance in Mediterranean countries 
the past two decades.) 
 
¶9.  (SBU)  MFA Deputy Foreign Minister Patrizia Sentinelli 
recently confirmed ODC priorities before a parliamentary 
committee on foreign affairs.  (Note:  Sentinelli, a leftist 
parliamentarian, has had competence for ODC's portfolio since 
summer 2006.)  Sentinelli explained that programs in 
agriculture, the environment, and health would be the primary 
means to assist Africa and women.  Additionally, she said, 
ODC will devote 50 percent of its 2007 bilateral assistance 
budget to promoting development in Africa. 
 
¶10.  (SBU)  Fabrizio Nicoletti, ODC Budget Director, provided 
us a breakdown of ODC's 607 million euro budget for 2007 as 
follows (figures in millions of euro): 
 
Multilateral assistance (e.g., UN and EU) = 280 
Bilateral assistance = 107 
Assistance to NGOs = 100 
Assistance to NGOs for admin costs = 56 
ODC admin costs = 44 
Emergency assistance/other = 20 
 
¶11.  (SBU)  Nicoletti noted that the 2007 budget increase is 
largely to pay UN back dues, which ODC categorizes as 
"multilateral assistance," the funding for which the 
Berlusconi government had drastically cut by 230 million euro 
in 2006. 
 
¶12.  (SBU)  Nicoletti also explained that ODC considers its 
development work in Iraq "finished" with the pullout of 
Italian troops and has no 2007 funds budgeted for Iraq.  He 
explained that current ODC view is that Iraq is "rich" (with 
oil) and did not need development assistance.  (Note:  MFA's 
 
ROME 00000697  003.2 OF 003 
 
 
Iraq Task Force currently handles Iraq development 
assistance.  Task Force members informed us they will turn 
over the Iraq aid portfolio to ODC January 2008.  End note.) 
 
¶13.  (SBU)  Nicoletti also reported that ODC was "optimistic" 
Parliament would soon debate an additional 260 million euros 
for the Global Fund to Fight AIDS, Tuberculosis, and Malaria. 
 (Note:  These funds will cover previous years' pledges to 
the Global Fund that the GOI did not honor.) 
 
IRAQ, LEBANON, AFGHANISTAN, AND SUDAN 
------------------------------------- 
 
¶14.  (SBU)  Subsequent to Parliament approving the GOI 2007 
budget, including foreign assistance, in December 2006, 
Parliament approved March 27 an additional 75.5 million euros 
of foreign assistance for Afghanistan (40 million), Lebanon 
(30 million), and Sudan (5.5 million -- specifically, for 
Darfur).  Parliament also allocated 30 million euros for Iraq 
to continue Italy's "humanitarian, stabilization, and 
reconstruction mission," to be allocated and disbursed by the 
Italian Embassy in Baghdad.  Additionally, Italy and Iraq 
signed in January 2007, a bilateral "Friendship, Partnership, 
and Cooperation" treaty providing Iraq 400 million euros in 
credit assistance over the next three years to develop its 
infrastructure. 
 
COMMENT 
------- 
 
¶15.  (SBU)  Italy's increase in its 2007 foreign assistance 
funding is encouraging, although GOI intentions on Iraq 
foreign assistance over the next few years are not clear.  On 
the one hand, Deputy FM Sentinelli has declared that all ODC 
development assistance in Iraq is finished (reftel).  Should 
she continue to set ODC policy when ODC inherits the Iraq 
foreign assistance portfolio from the Iraq Task Force in 
2008, assistance to Iraq may suffer.  On the other hand, 
Parliament's recent approval of some 30 million euros of Iraq 
foreign assistance suggests Parliament's continuing interest 
in Iraqi development and reconstruction.  End comment. 
 
SPOGLI