US embassy cable - 02ROME763

C O N F I D E N T I A L SECTION 01 OF 02 ROME 000763 
 
SIPDIS 
 
DEPT FOR EUR/ERA, EUR/WE 
 
E.O. 12958: DECL: 02/14/2007 
TAGS: ECON, EU, IT, EU, IT, PREL, PRELECON 
SUBJECT: MEP GIORGIO NAPOLITANO ON EU REFORM; 
CONSTITUTIONAL CONVENTION - "WE MUST PUT OUR HOUSE IN ORDER" 
 
 
CLASSIFIED BY: DCM WILLIAM P. POPE.  REASON: 1.5 (B)(D). 
                       CONFIDENTIAL 
 
PAGE 02        ROME  00763  01 OF 02  150705Z 
 
1.  (C)  SUMMARY.  ON FEBRUARY 12, DURING A WIDE-RANGING 
DIALOGUE WITH POL AND ECON OFFICERS, ITALIAN MEP AND 
PRESIDENT OF THE EP'S CONSTITUTIONAL AFFAIRS COMMITTEE 
GIORGIO NAPOLITANO EMPHASIZED THAT EU REFORM AND STREAMLINING 
WAS ABSOLUTELY ESSENTIAL IF THE UNION IS TO FUNCTION 
EFFECTIVELY WITH 25 MEMBERS.  THE EU MUST ADOPT THE NEW 
CONSTITUTION BY THE END OF 2003 TO ENSURE A SMOOTH 
ENLARGEMENT PROCESS IN 2004.  THE NEW DOCUMENT MUST PROVIDE A 
FRAMEWORK FOR ENHANCED COOPERATION AMONG NATIONAL LAW 
ENFORCEMENT, JUDICIAL AND INTELLIGENCE BODIES.  IT MUST ALSO 
DEFINE PRINCIPLES AND PROTECT THE RIGHTS OF INDIVIDUALS, AND 
DEFINE EXCLUSIVE COMPETENCIES OF THE EU AS WELL AS SHARED 
EU/MEMBER STATES' COMPETENCIES.  NAPOLITANO ALSO SAID THAT 
THE EU NEEDS A CONSTITUTIONAL COMMITMENT TO COORDINATE 
BUDGET, FISCAL AND ECONOMIC POLICIES.  THE ORGANIZATION MUST 
ALSO GRAPPLE SOON WITH THE FINANCIAL BURDENS OF ENLARGEMENT. 
  END SUMMARY 
 
2.  (C)  NAPOLITANO SAID THAT THE EU MUST UNDERGO SIGNIFICANT 
REFORM AND STREAMLINING TO PREPARE FOR ENLARGEMENT AND TO 
MAKE THE ORGANIZATION MORE RESPONSIVE AND ACCOUNTABLE TO ITS 
MEMBER STATES AND INDIVIDUAL EUROPEAN CITIZENS.  "WE MUST PUT 
OUR HOUSE IN ORDER," HE EMPHASIZED.  THE METHOD BY WHICH THE 
EU BUREAUCRACY HAS EXPANDED OVER THE YEARS, WHICH HE 
DESCRIBED AS A STEP BY STEP INCREMENTAL CREEP, HAS PRODUCED A 
PLETHORA OF CONTRADICTORY AND CONFUSING RULES AND 
REGULATIONS.  NAPOLITANO AVERRED THAT THIS HAS CREATED AN 
ALMOST IMPOSSIBLE SITUATION WITH 15 MEMBERS, BUT AT 25 IT 
WILL BRING THE ORGANIZATION TO A STANDSTILL.  REFORM, 
THEREFORE, IS "ABSOLUTELY NECESSARY."  ENLARGEMENT REQUIRES A 
                       CONFIDENTIAL 
 
PAGE 03        ROME  00763  01 OF 02  150705Z 
POLITICAL AND INSTITUTIONAL "REFOUNDING" OF THE COMMUNITY, 
NAPOLITANO CONTINUED.  HE SEES A NEED TO "REASSERT THE 
PRINCIPLES, VALUES AND STRATEGIC GOALS" OF THE EU. 
 
3.  (C)  NAPOLITANO FORESEES A RELATIVELY SHORT PROCESS FOR 
THE CONSTITUTION'S ADOPTION (IF THAT IS WHAT THE DOCUMENT 
ENDS UP BEING CALLED); A ONE YEAR CONVENTION, BEGINNING MARCH 
1, FOLLOWED BY A SHORT PAUSE, AND THE INTER-GOVERNMENTAL 
CONFERENCE (IGC).  THE IGC SHOULD BE A SHORT PROCESS BECAUSE 
GOVERNMENTS AND NATIONAL PARLIAMENTS WILL RECEIVE REGULAR 
REPORTS DURING THE CONVENTION, SO THERE SHOULD BE NO REAL 
SURPRISES FOR THE IGC.  HE UNDERSCORED HIS BELIEF THAT THE 
CONCLUDING SESSION OF THE IGC, PRESIDED OVER BY 
HEADS-OF-STATE, MUST ADOPT THE FINAL DOCUMENT BY THE END OF 
THE ITALIAN EU PRESIDENCY (E/O '03).  THIS HAS NOTHING TO DO 
WITH GIVING ITALY THE HONOR OF ANOTHER "TREATY OF ROME." 
THERE ARE "OBJECTIVE, PRACTICAL" REASONS FOR AIMING FOR THIS 
DATE.  ENLARGEMENT WILL TAKE PLACE IN 2004.  ALL NEW 
PARAMETERS, FROM WEIGHTED VOTING, TO FINANCIAL CONTRIBUTIONS 
AND RECEIPTS, TO DIVISIONS OF COMPETENCIES AMONG BRUSSELS, 
MEMBER STATES, AND THE REGIONS, MUST BE IN PLACE IN ORDER TO 
ENSURE AN ORDERLY ENLARGEMENT PROCESS.  A DIRECT FINANCING 
MECHANISM MUST BE ESTABLISHED.  EP ELECTIONS AND THE 
SELECTION OF A NEW COMMISSION ALSO OCCUR IN 2004.  ALL THIS, 
ACCORDING TO NAPOLITANO, WILL REQUIRE DECISIONS BASED ON THE 
CONSTITUTION. 
 
4.  (C)  NAPOLITANO ENVISIONS A CONSTITUTION THAT WILL 
SIMPLIFY AND STREAMLINE THE EU.  THE DOCUMENT MUST STRENGTHEN 
THE EU'S ROLE IN CERTAIN AREAS, SUCH AS  EXTERNAL AND 
INTERNAL SECURITY.  THIS IS PARTICULARLY TRUE POST-9/11.  THE 
                       CONFIDENTIAL 
 
PAGE 04        ROME  00763  01 OF 02  150705Z 
STRUGGLE AGAINST GLOBAL AND INTERNAL TERRORISM AND ORGANIZED 
CRIME CANNOT BE ACCOMPLISHED BY ANY ONE STATE ALONE.  THE NEW 
CONSTITUTION MUST RECOGNIZE POST-9/11 REALITIES AND PROVIDE 
THE FRAMEWORK FOR ENHANCED COOPERATION AMONG NATIONAL LAW 
ENFORCEMENT, JUDICIAL AND INTELLIGENCE BODIES.  NAPOLITANO 
SAID THAT THE DOCUMENT MUST INSTITUTIONALIZE A STRONG FOREIGN 
POLICY OFFICE, WHICH EXISTS NOW LARGELY DUE TO JAVIER 
SOLANA'S REPUTATION AND PERSONALITY.  HE ALSO SAW A NEED FOR 
ENHANCED COOPERATION AMONG MEMBER STATES ON IMMIGRATION AND 
ASYLUM POLICY.  HE RECOGNIZED THE CHALLENGES ASSOCIATED WITH 
CRAFTING A COMMON DEFENSE POLICY, GIVEN THE SENSITIVITIES OF 
NEUTRAL MEMBER STATES SUCH AS IRELAND, FINLAND AND SWEDEN. 
THUS, HE SUGGESTED A SOLUTION ALLOWING SOME MEMBER STATES TO 
AGREE TO A COMMON DEFENSE POLICY AND OTHERS TO OPT OUT (AS 
WITH ADOPTION OF THE EURO). 
 
5.  (C)  NAPOLITANO DOES NOT FORESEE A RISK OF CREATING A 
"SUPERSTATE" THAT WILL THREATEN MEMBER STATES' NATIONAL 
SOVEREIGNTY, BUT THE CONVENTION MEMBERS MUST BE PREPARED TO 
DEAL WITH THE "PSYCHOSIS" OF THOSE AMONG THEM WHO WANT TO USE 
THE CONVENTION PROCESS TO "DILUTE" THE EU'S POLITICAL UNION 
BACK TO A SIMPLE CUSTOMS UNION.  "THE CONSTITUTION CAN NOT BE 
JUST A DIVISION OF LABOR.  IT MUST DEFINE PRINCIPLES AND 
RIGHTS OF INDIVIDUALS."  "THE COURT OF JUSTICE SHOULD BE THE 
INSTITUTION RESPONSIBLE FOR DECIDING ISSUES OF SUBSIDIARITY," 
NAPOLITANO CONTINUED.  HE THOUGHT THAT THE CONSTITUTION 
SHOULD DEFINE EXCLUSIVE COMPETENCIES OF THE EU, AS WELL AS 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ8432 
 
PAGE 01        ROME  00763  02 OF 02  150705Z 
ACTION EUR-00 
 
INFO  LOG-00   NP-00    AGRE-00  AID-00   ACQ-00   CEA-01   CIAE-00 
      COME-00  CTME-00  INL-00   DODE-00  DOTE-00  SRPP-00  DS-00 
      EB-00    EXIM-01  E-00     FAAE-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   ITC-01   LAB-01   L-00     VCE-00   AC-01 
      DCP-01   NSAE-00  NSCE-00  OMB-01   OPIC-01  PA-00    PM-00 
      PRS-00   ACE-00   P-00     SCT-00   SP-00    IRM-00   SSO-00 
      SS-00    STR-00   TRSE-00  T-00     USIE-00  EPAE-00  SNIS-00 
      NISC-00  PMB-00   DSCC-00  DRL-02   G-00     NFAT-00  SAS-00 
      SWCI-00    /011W 
                  ------------------6741C2  150711Z /38 
P 150639Z FEB 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC PRIORITY 0176 
INFO EU CANDIDATE STATES COLLECTIVE 
EU INTEREST COLLECTIVE 
EU MEMBER STATES COLLECTIVE 
 
C O N F I D E N T I A L SECTION 02 OF 02 ROME 000763 
 
SIPDIS 
 
DEPT FOR EUR/ERA, EUR/WE 
 
E.O. 12958: DECL: 02/14/2007 
TAGS: ECON, EU, IT, PREL 
SUBJECT: MEP GIORGIO NAPOLITANO ON EU REFORM; 
 
CONSTITUTIONAL CONVENTION - "WE MUST PUT OUR HOUSE IN ORDER" 
                       CONFIDENTIAL 
 
PAGE 02        ROME  00763  02 OF 02  150705Z 
 
SHARED COMPETENCIES, LEAVING OTHER AREAS TO THE MEMBER 
STATES, BUT EXPECTED THAT THE CONSTITUTION WOULD INCLUDE A 
MECHANISM FOR MEMBER STATES DECIDING TO YIELD MORE COMPETENCE 
TO THE EU. 
 
6.  (C)  NAPOLITANO SAW ECONOMIC AND FINANCE POLICY AS 
ANOTHER AREA IN WHICH CONSTITUTIONAL DECISIONS WERE REQUIRED. 
 "CAN YOU HAVE A EUROPEAN CENTRAL BANK, WITHOUT POLITICAL 
RESPONSIBILITY OR ECONOMIC OR FISCAL POLICIES, MAKING 
MONETARY POLICY?  CAN YOU HAVE THE FED WITHOUT THE TREASURY 
OR PRESIDENT?"  HE ASKED.  THE EUROPEAN CENTRAL BANK, IN HIS 
VIEW, MUST BE ACCOMPANIED BY SOME LEVEL OF EU ECONOMIC AND 
FISCAL POLICY RESPONSIBILITY.  "WE NEED A CONSTITUTIONAL 
COMMITMENT TO COORDINATE BUDGET, FISCAL AND ECONOMIC POLICIES 
WITHIN THE EU." 
 
7.  (C)  THE FINANCIAL BURDENS OF ENLARGEMENT, STRUCTURAL 
FUNDS AND THE COMMON AGRICULTURAL POLICY, HAVE YET TO BE 
RESOLVED, NOTED NAPOLITANO.  HE CALLED THE POSSIBLE SOLUTION 
"REALLY AN UNKNOWN."  THE IDEA OF HAVING A CAP OF FOUR 
PERCENT OF GDP ON STRUCTURAL FUNDS FOR THE NEW ENTRANTS HAD 
SOME LOGIC, BUT "IT IS QUESTIONABLE, BECAUSE OF THE OVERSIZED 
EXPECTATIONS IN THESE COUNTRIES.  IT WON'T BE EASY TO LIMIT 
IT LIKE THIS."  HE ADDED THAT "TAKING IN EASTERN EUROPEAN 
COUNTRIES WITH LOW GDPS DOES NOT MAKE OUR POORER REGIONS ANY 
RICHER."  HE SUGGESTED THAT THE PARAMETER FOR STRUCTURAL 
FUNDS WOULD HAVE TO CHANGE -- IT COULD NO LONGER BE 50 
PERCENT OF AVERAGE EU GDP, BECAUSE THIS AVERAGE WILL FALL 
WITH ENLARGEMENT.   HE CALLED THE COMMON AGRICULTURAL POLICY 
"A BIG PUZZLE" AND DECLARED THAT THE ADDITION OF POLAND WAS A 
                       CONFIDENTIAL 
 
PAGE 03        ROME  00763  02 OF 02  150705Z 
MAJOR PROBLEM IN THIS CONTEXT. 
 
8.  (C)  COMMENT: NAPOLITANO WAS NOT SPECIFIC REGARDING WHICH 
MEMBERS OF THE CONVENTION HE PERCEIVED AS WANTING TO "DILUTE" 
THE EU'S POWERS.  IF HE HAD IN MIND ANY OF HIS FELLOW ITALIAN 
DELEGATES TO THE CONVENTION, HE DID NOT SHOW HIS HAND.  HE 
REFERRED TO ONE OF THE CONVENTION VICE PRESIDENTS, FORMER 
ITALIAN PM AND SOCIALIST PARTY MEMBER GIULIANO AMATO, AS 
"PROFESSIONAL AND BALANCED" IN HIS APPROACH TO REFORM.  THIS 
WAS NOT SURPRISING, GIVEN NAPOLITANO'S MEMBERSHIP IN THE OLD 
ITALIAN COMMUNIST PARTY.  BUT HE WAS ALSO RELUCTANT TO 
CRITICIZE DIRECTLY ANOTHER OF ITALY'S DELEGATES, DEPUTY PRIME 
MINISTER, AND HEAD OF THE RIGHT WING NATIONAL ALLIANCE (AN) 
PARTY, GIANFRANCO FINI, SAYING ONLY THAT FINI WAS NEW TO THE 
PROCESS AND HAD NOT ELABORATED A POSITION.  NAPOLITANO TOLD 
US HE HAD A CONVERSATION WITH FINI RECENTLY, DURING WHICH 
FINI EXPRESSED AN INTEREST IN REACHING A "COMMON POSITION" 
WITH THE EP'S CENTER-LEFT ON INSTITUTIONAL REFORM.  IF THIS 
TYPE OF DIALOGUE CONTINUES AMONG ITALIAN DELEGATES IN 
BRUSSELS, ITALY COULD BE POSITIONED TO MAKE A MEANINGFUL AND 
LASTING CONTRIBUTION TO THE CONVENTION, AND THEREFORE TO 
FUTURE EUROPEAN POLITICAL AND ECONOMIC INFRASTRUCTURES. IN 
THIS REGARD, ITALY COULD HAVE LEADERSHIP POTENTIAL, 
ESPECIALLY IF THE ITALIAN DELEGATION DEMONSTRATES A GREATER 
RIGOR IN EXAMINING AND PROPOSING A STRATEGY FOR DEALING WITH 
THE DIFFICULT ECONOMIC AND POLITICAL ISSUES THAN WAS IN 
EVIDENCE DURING THIS DISCUSSION WITH NAPOLITANO.    END 
COMMENT 
SEMBLER 
 
                       CONFIDENTIAL 
 
PAGE 04        ROME  00763  02 OF 02  150705Z 
 
                       CONFIDENTIAL 
 
> 
 2002ROME00763 - Classification: CONFIDENTIAL