US embassy cable - 02ROME563

UNCLAS ROME 000563 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EB/OMA 
 
E.O. 12958: N/A 
TAGS: EAID, EFIN, IT, IDA 
SUBJECT: FINANCE MINISTRY ON IDA REPLENISHMENT; GOI 
ATTENDANCE AT DEVELOPMENT CONFERENCE 
 
 
                       UNCLASSIFIED 
 
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REF: JANUARY 17 EMAIL FROM TFERET TO EU POSTS 
 
1. ITALIAN OFFICIALS SUPPORT AN INCREASE IN IDA LENDING AS 
GRANTS RATHER THAN LOANS, BUT STILL ONLY AS MINOR SHARE OF 
OVERALL LENDING. IN A FEBRUARY 4 MEETING WITH FINMIN 
OFFICIALS, ECOUN AND ECONOFF PRESENTED PRESIDENT BUSH'S 
PROPOSAL THAT THE WORLD BANK AND OTHER DEVELOPMENT BANKS 
DRAMATICALLY INCREASE THE SHARE OF FUNDING PROVIDED TO THE 
WORLD'S POOREST COUNTRIES AS GRANTS RATHER THAN LOANS. 
 
2.  RAFFAELA DI MARO AND GIORGIO LECCESI, OFFICER DIRECTOR 
FOR BILATERAL ASSISTANCE AND OFFICE DIRECTOR FOR MDBS, 
RESPECTIVELY, AT THE FINANCE MINISTRY TOLD ECOUN AND ECONOFF 
THAT ITALY CONCURS WITH THE US THAT GRANTS ARE USEFUL 
MECHANISMS AND THAT THEIR SHARE OF OVERALL DEVELOPMENT 
ASSISTANCE FUNDING SHOULD BE INCREASED. ITALY DOES NOT, 
HOWEVER, SUPPORT A GRANT INCREASE GREATER THAN TEN PERCENT OF 
OVERALL IDA FUNDING.  FOR REPLENISHMENT OF THE AFRICAN 
DEVELOPMENT BANK, ITALY SUPPORTS A GRANT CEILING OF 7.5 
PERCENT. ITALY WOULD SUPPORT THE USE OF GRANTS FOR EDUCATION, 
HEALTH AND NUTRITION PROGRAMS.  DI MARO UNDERSCORED ITALIAN 
CONCERN ABOUT THE COST TO DONORS, IN TERMS OF FOREGONE IDA 
REPAYMENTS, IF THE GRANT PORTION WERE INCREASED DRAMATICALLY. 
 
3.  WE ALSO DISCUSSED THE UPCOMING MONTEREY CONFERENCE ON 
INTERNATIONAL FINANCING OF DEVELOPMENT, PAKISTAN AND ZIMBABWE 
(THE LATTER TWO TO BE REPORTED SEPTEL). DI MARO POSTULATED 
THAT PM BERLUSCONI, IN HIS DUAL CAPACITY AS FOREIGN MINISTER, 
WOULD GO TO THE MONTERREY CONFERENCE.  WE REPLIED THAT NO 
DECISION HAS YET BEEN MADE ABOUT US PARTICIPANTS. 
SEMBLER 
                       UNCLASSIFIED 
 
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 2002ROME00563 - Classification: UNCLASSIFIED