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S E C R E T SECTION 01 OF 04 ROME 000454 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DECL: 04/11/2018 
TAGS: PGOV PREL IT
SUBJECT: ITALY: PRESSING OUR PRIORITIES WITH THE NEXT 
GOVERNMENT STARTING NEXT WEEK 
 
REF: A. ROME 435 
     ¶B. ROME 246 
 
Classified By: Ambassador Ronald Spogli, for reasons 1.4 (b) and (d). 
 
¶1. (C) Summary. Italy's upcoming elections and period of 
government formation will give us an opportunity to press our 
agenda with renewed vigor after four months with a caretaker 
government and more than two years with a government hampered 
by far left partners.  While our relationship with the Prodi 
government was good, our relations with the next government 
promise to be better, maybe much better.  We anticipate 
making progress on the agenda below should Veltroni make a 
surprise come-from-behind victory, and excellent progress 
should Berlusconi be returned to power.  Regardless of who 
wins, we intend to begin meeting with likely members of the 
new government as soon as possible after elections, during 
the period of government formation in April and early May, to 
lay down markers on our key policy priorities and the 
direction we would like to see Italian policy take.  We also 
welcome senior USG visitors to press our agenda, including 
between the elections and the seating of a new government. 
We intend to take up: the tone of the relationship; Iran; 
Afghanistan; Energy Security/Russia; Iraq; MEPP; 
Lebanon/Syria; Basing/Pol-Mil issues; economic 
competitiveness; foreign assistance; climate change; and law 
enforcement cooperation.  End Summary. 
 
Improving the Tone of the Relationship 
-------------------------------------- 
 
¶2. (C) Though the Prodi government generally pursued policies 
we supported, it felt the need to make gratuitous 
anti-American statements to shore up its far-left 
constituents.  Such comments detracted from important 
discussions on the Middle East, Balkans, and Iran.  While 
both leading candidates in Italy's election are pro-American, 
we should, nevertheless, encourage the incoming government to 
recognize that tone matters in the bilateral relationship and 
to exercise discipline to avoid unhelpful rhetoric. 
 
Iran 
---- 
 
¶3. (C/NF) Italy has felt marginalized from key Iran 
discussions since the last Berlusconi government and could 
play a ""spoiler"" role on Iran until/unless it feels properly 
included in the decision making framework.  Regardless of who 
wins, we plan to engage early and often to encourage Italy to 
share our sense of urgency on Iran, and to show that the 
policy of targeted financial action has worked.  Our case 
will be helped by being able to share information linking 
Iranian banks with Iranian proliferators in order to 
encourage Italian support for more stringent measures both 
within the UNSC and the EU against Iran.  We will discourage 
the new government from having high-level visits to/from 
Tehran, and from allowing new significant Italian investment 
in the Iranian energy sector. 
 
¶4. (C/NF) A Berlusconi or Veltroni government may be more 
inclined than was Prodi to take on Iran.  However, no Italian 
government can ignore the large pre-existing trade 
relationship with Iran.  It also will be difficult to 
convince the Italians to abandon interest in energy 
development in Iran, when third parties are anxious to fill 
in after the departure of any firm from Iran and Italy's own 
choices for energy suppliers includes a number of other ""bad 
actors"". 
 
Afghanistan 
----------- 
 
¶5. (S/NF) We expect a more forward-leaning approach to 
Afghanistan from the next Italian government.  However, both 
Berlusconi and Veltroni will be reluctant to place Italian 
soldiers at increased risk. We will urge Italy to take 
greater ownership for its Command Region (RC-West), which is 
facing a worsening security situation and has the lowest 
troop level of the five ISAF regions.   We will press Italy 
to authorize its troops to take a more active approach 
against insurgent activity in Herat and Farah provinces and 
to ease or drop geographic caveats that prohibit Italian 
troops from crossing into RC-South.  We will also lay down a 
strong marker objecting to past practices of paying 
protection money and negotiating deals for the release of 
hostages.  The next Italian government will continue to face 
budgetary and Constitutional constraints on Italian missions 
overseas, and any significantly increased deployment to 
Afghanistan could require a drawdown elsewhere (e.g. in 
Lebanon or Kosovo). 
 
¶6. (C/NF) We will also encourage the Italians to do more 
Afghan police training, a field in which they excel, by 
expanding the Guardia di Finanza training of Afghan Border 
Police, stepping up Carabinieri police training currently 
being considered (ANCOP, ANP training with U.S. Marines), and 
expanding Italian participation in EUPOL.  Finally, we will 
encourage the new government to expand judicial sector reform 
and capacity-building efforts and take the lead on 
encouraging donors to contribute to the Justice Reform 
component of the Afghan Reconstruction Trust Fund (ARTF). 
 
Energy Security/Russia 
---------------------- 
 
¶7. (C/NF)  The Prodi government has been reluctant to 
confront Russia on many issues because of its dependence on 
Russian energy supplies.  We will encourage the new Italian 
government to set as a priority the formulation of a national 
energy policy that realistically addresses the country's 
growing need for energy and its worrisome energy dependence 
on Russia.  Nuclear power and renewable energy sources should 
be looked at as parts of the plan.  Italy should also exert 
leadership at the European level, pushing for an EU energy 
policy that would address the Union's very worrisome 
dependence on Russia. 
 
¶8. (C/NF) We will suggest using the influence that comes from 
the GOI's partial ownership of Eni to stop the company from 
being the ""spearhead of Gazprom.""  This would probably 
require new leadership at Eni.  Also, we will seek to ensure 
that Eni fully cooperates on projects (such as renewable 
energy and LNG terminals), that are intended to reduce 
Italy's dependence on Russian gas, and encourage the use of 
GOI influence on Eni to force the company to cooperate with 
Italian and EU-level energy diversification efforts. 
 
¶9. (C/NF) In private, Veltroni has expressed a willingness to 
tackle Italy's dependence on Russia (ref B), but recent 
public comments indicate he might not be prepared to 
challenge Russia.  Berlusconi has a very close personal 
relationship with Putin.  Former FM Gianfranco Fini told the 
Ambassador that because of that, all Russia policy would be 
personally handled by Berlusconi, who recently expressed 
sympathy for Russia's unhappiness with feeling ""surrounded by 
NATO.""  Getting a better Italian approach to Russia will be 
extremely challenging regardless of election results. 
 
Iraq 
---- 
 
¶10. (C/NF) In Iraq, we should consider asking Italy to 
augment its contingent to NTM-I and to maintain its PRT 
presence in Dhi Qar.  We would also like to see Italy's MFA 
Iraq Task Force, led by the able former Italian Ambassador to 
Iraq Gianludovico De Martino, remain in operation.  The next 
government may be willing to give a little more in Iraq, as 
both France and Germany recently have.  We will push Italy to 
make specific commitments on police training and NTM-I at the 
Iraq Compact meeting in Stockholm in late May. 
 
Middle East Peace Process 
------------------------- 
 
¶11. (C/NF) Both Berlusconi and Veltroni would be more 
inclined to adopt a pro-Israeli policy than Prodi was.  We 
will strongly impress upon the next GOI the importance of 
Italy continuing to work through the Quartet on the peace 
process and refraining from public calls for dialogue with 
and expressions of sympathy for Hamas.  Veltroni's pro-Israel 
stance could be tempered if Massimo D'Alema remains FM. 
 
Lebanon/Syria 
------------- 
 
¶12. (C/NF) Much of Berlusconi's party opposes Italy's UNIFIL 
role because it was a project of the Center-Left, in their 
view set up for failure with weak ROE in a dangerous location 
leaving Italian troops unable to adequately protect 
themselves or conduct a robust mission effectively. Though he 
recently pledged to maintain the Italian presence, and even 
invigorate the disarmament of Hizballah, we intend to stress 
to him personally, or to Veltroni should he win, how much we 
value Italy's contributions to UNIFIL II in Lebanon, and that 
we would like to see them continue.  We will also encourage 
the next GOI to more firmly press Syria and Iran to stop 
interfering in Lebanese internal affairs, and to halt the 
flow of foreign fighters into Iraq.  A Veltroni government in 
particular will need to be reminded that high-level visits 
to/from Damascus are damaging to international efforts and 
will be badly received by the U.S. and others. 
 
AFRICOM, CoESPU 
--------------- 
 
¶13. (C/NF) We will work with EUCOM, AFRICOM, OSD and the 
Department on early engagement with the new GOI on plans to 
set up an AFRICOM Army component command at SETAF in Vicenza. 
 We will also encourage the new government to strengthen 
Italian staffing and financial contributions to Vicenza's 
Center of Excellence for Stability Police Units (CoESPU) -- 
which was a creation of the last Berlusconi government -- to 
enable CoESPU to successfully train Formed Police Units 
headed to Darfur under UNAMID.  Army base expansion at Dal 
Molin is moving forward with the contract awarded. We will 
reach out to the new key players to support the able Dal 
Molin commissioner Paolo Costa and to keep the project on 
track. 
 
Economic Competitiveness 
------------------------ 
 
¶14. (SBU) Bringing GDP growth rates up to at least the 
average for the EU should be economic policy objective number 
one for the new government.  It is not for us to prescribe 
the precise measures it should take, but the problems are 
well known: labor market rigidity, a burdensome bureaucracy, 
a dysfunctional justice system, corruption, organized crime, 
shortcomings in the educational system, an environment that 
is hostile to new business and only weakly supportive of 
innovation, etc.  We will maintain our Partnership for Growth 
Program and find a way to expand Fulbright BEST program -- 
two initiatives we have taken to encourage entrepreneurship, 
business exchanges, with a view to both stronger U.S. - 
Italian economic/commercial ties and longer-term economic 
strength of this strategic partner. 
 
¶15. (U) We will press Italy to enforce its intellectual 
property laws, and suggest as an early objective for the new 
government having Italy taken off the USG's ""301 Watch List"" 
for IPR violators.  The only way off this list is for the new 
government to demonstrate a real willingness to significantly 
improve IPR protection in Italy. 
 
¶16. (SBU) Basing promotions and research funding allocation 
on merit in Italian academia is something that we and most 
Italians believe should be done immediately, but which is 
probably politically impossible.  However, we will encourage 
the new government to take some important steps to promote 
innovation, for example, by urging universities to give equal 
credit for an approved patent as for a publication, and 
taking into account the special needs of start-ups and 
research investment in Italian tax and regulatory systems. 
 
Foreign Assistance 
------------------ 
 
¶17. (SBU) On Iraq, we will urge continued high-level 
attention and encourage the Italians not to fold Iraq 
operations into routine MFA desk officer responsibilities 
(see also para 10).  We will push for Italian assistance 
levels to be maintained, if not expanded, and will seek early 
assurances that Italian commitment and assistance to their 
PRTS in both Afghanistan and Iraq continue.  In particular, 
we'll push Italy to increase its civilian assistance at the 
June Afghan Donors' Conference in Paris.  In the past two 
years, Italy has made progress towards meeting its G8 
assistance goals for sub-Saharan Africa, but needs to do more 
in the areas of education and promoting good governance.  We 
will encourage them to do so. 
 
Climate Change/MEM 
------------------ 
 
¶18. (SBU) The new government may designate a new lead for the 
Major Economies (ME) negotiations on energy security and 
climate change.  We will ask that it be someone who can play 
an active role, and continue Italy's support for us on key 
points as we head toward a ME leaders summit on the margins 
of the June G8 summit in Japan.  As Chair of the 2009 G8 
Summit, Italy will be a key player in efforts to reach a 
global agreement on climate change by December 2009. When we 
get down to negotiating binding commitments, and we seek EU 
compromises in order to get an agreement that the U.S. 
Congress can support, we need a reliable interlocutor in the 
Italian Government, who understands economics as well as the 
environment. 
 
Law Enforcement and Counter-Terrorism Cooperation 
--------------------------------------------- ---- 
 
¶19. (C) We will press the new government to implement 
extradition and MLAT agreements signed in May 2006.  We will 
expand our sharing of law enforcement databases now that we 
have signed an HSPD-6 agreement with the Italian government. 
We will also immediately engage on counter-terrorism issues. 
 
Comment 
------- 
 
¶20. (U) We look forward to working with Washington on rapidly 
moving forward this ambitious, important and promising agenda. 
SPOGLI