VZCZCXYZ0044
OO RUEHWEB

DE RUEHRO #0992 1301501
ZNR UUUUU ZZH
O 101501Z MAY 07
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7976
INFO RUEHFR/AMEMBASSY PARIS IMMEDIATE 2258
RUEHSS/OECD POSTS COLLECTIVE PRIORITY

UNCLAS ROME 000992 
 
SIPDIS 
 
SIPDIS 
 
PARIS FOR USOECD 
 
E.O. 12958: N/A 
TAGS: ECON OECD EUN IT
SUBJECT: ITALIAN VIEWS ON OECD ENLARGEMENT AND FINANCIAL 
REFORM 
 
REF: STATE 62464 
 
Sensitive but unclassified.  Not for internet distribution. 
 
¶1.  (U)  Summary.  According to the MFA's Director General 
for Multilateral Economic Affairs, the GOI is already heavily 
engaged in discussion at the OECD Council on OECD enlargement 
and financing reform.  Regarding OECD enlargement, the GOI is 
especially concerned that enlargement proceed in such a way 
that two European states are included in the list of 
countries with which the OECD begins accession negotiations 
following next week's OECD Ministerial.  On the issue of OECD 
financing reform, the GOI agrees in principle that the 
current system needs to be reformed to include an annual 
minimum base fee covering recurring costs.  However, the GOI 
does not believe OECD financing reform should be a 
precondition for OECD expansion.  The Director General was 
not optimistic the OECD Council will be able to agree on a 
text on enlargement and financing reform in time for the 
Ministerial meetings next week.  End summary. 
 
¶2.  (U)  Embassy Rome Minister Counselor for Economic Affairs 
met May 10 with Giandomenico Magliano, the MFA's Director 
General for Multilateral Economic Affairs, to deliver reftel 
demarche on OECD enlargement and financing reform.  Magliano, 
the MFA's equivalent to the Under Secretary for Economic, 
Energy, and Agricultural Affairs, made himself available for 
the meeting on short notice, and spoke with the Italian OECD 
delegation in Paris immediately prior to meeting with the 
EcMin.  According to Magliano, the Italian delegation is 
heavily involved in discussions at the ongoing OECD Council 
meeting concerning OECD expansion and financing reform. 
 
¶3.  (SBU) Magliano agreed that there needs to be an 
assessment of the OECD's enlargement and of OECD financing. 
However, he made clear the GOI's position that the two should 
not be linked, and that OECD enlargement should continue 
notwithstanding disagreements among member states on the 
issue of OECD financing.  With respect to enlargement, 
Magliano was adamant that two European states should be 
included in the list of countries with which the OECD begins 
accession negotiations, naming Slovenia and Estonia as the 
most likely candidates.  Magliano said the GOI supports 
enhanced engagement with China to establish a dialogue on 
OECD issues.  Turning to the question of Israeli membership 
in the OECD, Magliano said that if the OECD enters into 
accession negotiations with Israel, it must also increase its 
outreach to Arab countries. 
 
¶4.  (SBU) On the issue of Russian OECD membership, Magliano 
noted that the OECD accession process is multi-phased, and 
that entering into negotiations did not guarantee Russian 
membership in the immediate future.  Magliano seized on what 
he saw as USG linkage of Russian WTO accession and OECD 
accession.  He said the two should be kept separate in order 
to avoid a situation in which a member of the WTO could 
essentially veto a state's OECD accession by derailing their 
WTO candidacy.  In this regard, he cited the potential of 
Georgia taking such an action to block Russia's OECD 
membership. 
 
¶5.  (U) Moving on to the issue of OECD financing, Magliano 
concurred with our observation that smaller OECD members are 
getting a free ride at the expense of larger members such as 
the United States.  He agreed there should be an annual 
minimum base fee, and noted that if countries are reluctant 
to pay an increased, minimum, annual fee, it is a sign that 
they do not fully appreciate the value of the work done by 
the OECD.  Magliano suggested that the OECD Ministerial 
meeting adopt language that commits member states to "fully 
finance the OECD on a sustainable basis." 
 
¶6.  (SBU) Comment.  While Magliano was receptive to our 
points, it was clear the GOI had concluded its internal 
discussions on OECD enlargement and financing reform, and 
that, with working-level discussions already started in 
Paris, the train had left the station.  Magliano will be in 
Paris for next week's OECD meetings.  For the developmental 
portion of the ministerial, the Italian delegation will be 
led by Finance Minister Tomasso Padoa-Schioppa.  Although 
Undersecretary Vittorio "Bobo" Craxi will lead the Italian 
delegation on the issues of OECD enlargement and financing 
reform, U.S. delegation members should seek out Magliano for 
substantive discussion of these issues.  End comment. 
Spogli