US embassy cable - 04ROME2224

UNCLAS ROME 002224 
 
SIPDIS 
 
 
SENSITIVE 
 
STATE FOR EB/TRA BYERLY, EUR/WE, EUR/ERA 
DOT FOR PGRETCH 
USDOC FOR DE FALCO 
 
E.O. 12958: N/A 
TAGS: EAIR, IT, EUN, AVIATION 
SUBJECT: U.S.-EU AIR SERVICES AGREEMENT: GOI VIEWS AS "NOT 
    RIPE" 
 
REF: A. ROME 2190 
     B. STATE 124593 
     C. ROME 1893 
 
SENSITIVE BUT UNCLASSIFIED -- NOT FOR INTERNET DISTRIBUTION 
 
1. (SBU)  FOLLOWING UP ON REF. A DISCUSSIONS, ECMIN MET THE 
MORNING OF JUNE 10 WITH EMIGLIO MARAINI, DIPLOMATIC ADVISOR 
TO TRANSPORT MINISTER LUNARDI, SHORTLY BEFORE THE TWO WERE TO 
DEPART FOR THE TRANSPORT COUNCIL IN LUXEMBOURG.  MARAINI 
ESSENTIALLY CONFIRMED WHAT WE HAD HEARD IN OUR EARLIER 
MEETINGS, BUT WITH GREATER CLARITY, PRECISION AND CANDOR. 
 
2.  (SBU)  MARAINI STRESSED THAT THE BERLUSCONI GOVERNMENT, 
AND TRANSPORT MINISTER LUNARDI PERSONALLY, REMAINED COMMITTED 
TO FURTHER LIBERALIZATION OF U.S.-EU CIVAIR SERVICES. 
INITIALLY, LUNARDI HAD NOT BEEN PERSUADED BY ARGUMENTS 
AGAINST PROCEEDING WITH A FIRST-STEP AGREEMENT AT THIS TIME. 
ULTIMATELY, HOWEVER, THE SNOWBALLING CRISIS AT ALITALIA 
CAUSED HIM TO CHANGE HIS MIND. 
 
3.  (SBU)  ALITALIA IS CURRENTLY IN THE MIDST OF DEVELOPING A 
NEW BUSINESS PLAN WITH THE HELP OF MCKINSEY & CO., MARAINI 
CONTINUED, BUT THE PLAN WOULD NOT BE READY FOR AT LEAST 
ANOTHER WEEK OR TWO.  THEREAFTER, DISCUSSIONS WITH THE EU 
COMMISSION ON STATE AID AND RELATED MATTERS WOULD HAVE TO 
FOLLOW.  WITH SO MUCH IN FLUX, IT WAS POLITICALLY ALMOST 
IMPOSSIBLE FOR THE GOI TO ENDORSE -- AT THIS MOMENT -- A NEW 
CIVAIR FRAMEWORK THAT WOULD INCREASE COMPETITION ON 
    ALITALIA'S ROUTES TO THE U.S. 
 
4.  (SBU)  WITH RESPECT TO CABOTAGE, MARAINI SAID THAT THIS 
WAS A EUROPE-WIDE CONCERN WHICH THE GOI SHARED 
PHILOSOPHICALLY;  A FINAL AGREEMENT WOULD HAVE TO BE 
"BALANCED."  BUT HE CANDIDLY ADMITTED IT WAS NOT A 
MAKE-OR-BREAK NATIONAL INTEREST FOR ITALY, SINCE ALITALIA 
WOULD NOT BE IN ANY POSITION TO TAKE ADVANTAGE OF SUCH RIGHTS 
FOR THE FORESEEABLE FUTURE. 
 
5.  (SBU)  MARAINI PREDICTED THAT THE TRANSPORT COUNCIL 
DISCUSSION WOULD BE "DIFFICULT."  THE DYNAMICS WERE 
UNCERTAIN, GIVEN THE PRESENCE OF THE NEW MEMBER STATES.  BUT 
IT WAS CLEAR THAT THE UK WAS ADAMANTLY OPPOSED TO A 
FIRST-STEP AGREEMENT.  ("YOUR BRITISH COUNTERPART WILL BE 
COMING TO SEE ME IN AN HOUR TO ARGUE THE EXACT OPPOSITE," 
MARAINI SMILED.)  THE GERMANS WERE RIGHT NEXT TO THE BRITISH. 
 DUTCH AND FRENCH POSITIONS WERE MORE AMBIGUOUS, BUT MARAINI 
WAS CERTAIN THE FRENCH WOULD BE PLEASED TO SEE THE AGREEMENT 
STALL.  HE WAS FURTHER CONVINCED THAT DE PALACIO HAD COME TO 
REALIZE THAT AN AGREEMENT WAS NOT WITHIN REACH AT THIS 
COUNCIL MEETING, AND WOULD NOT GO TO THE MAT ACHIEVE IT. 
 
6.  (SBU)  IN SHORT, MARAINI CONCLUDED, A FIRST-STEP 
AGREEMENT WAS "NOT RIPE" FOR CONCLUSION BY THE U.S.-EU 
SUMMIT.  HE PROFESSED OPTIMISM, HOWEVER, THAT THE DUTCH WOULD 
TAKE UP THE NEGOTIATIONS EARLY-ON IN THEIR PRESIDENCY, AND 
THAT A SUCCESSFUL CONCLUSION WOULD BE ATTAINABLE BY THE END 
OF THE YEAR.  HE ALSO BELIEVED THAT AS SOON AS ALITALIA HAD 
DEVELOPED AN AGREED TURNAROUND PLAN, THE GOI WOULD BE ABLE TO 
SUPPORT A U.S.-EU AIR SERVICES AGREEMENT. 

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SEMBLER 
 
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	2004ROME02224 - Classification: UNCLASSIFIED