US embassy cable - 05ROME469

UNCLAS  ROME 000469 
 
SIPDIS 
 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: KNNP, PARM, TRGY, AORC, IT, IAEA 
SUBJECT: ITALIAN RESPONSE TO DEMARCHE ON U.S. INITIATIVE TO 
STRENGTHEN THE IAEA 
 
REF: STATE 21700 
 
(U)  SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET 
DISTRIBUTION. 
 
1.  (SBU) On February 7, 2005 SCICOUNS delivered reftel 
demarche to Counselor Giovanni Battista Iannuzzi, Director of 
Office VII (National Authority for Conventions on Nuclear, 
Bacteriological and Chemical Disarmament) of the Ministry of 
Foreign Affairs' Directorate General for Multilateral 
Political Affairs and Human Rights.  On February 11, Iannuzzi 
responded with preliminary comments.  Iannuzzi thanked 
SCICOUNS for providing the U.S.-proposed text for the draft 
terms of reference on the IAEA Special Committee on 
Safeguards and Verification, as well as the text of the 
U.S.-proposed Draft Board Decision to create the Special 
Committee.  He assured SCICOUNS that he had provided copies 
of these texts to Ambassador Catalano, who will head the 
Italian delegation at the Senior Group meeting in London on 
February 14th.  Iannuzzi emphasized that his comments were 
preliminary, and said that the Italian delegation looked 
forward to further discussion of the U.S. proposals in 
London. 
 
2.  (SBU) Iannuzzi said that after comparing the U.S. texts 
of September and November 2004, Italy's views remained fairly 
the same.  He confirmed that promoting additional signatories 
to the IAEA Additional Protocol was a priority objective for 
Italy, just as for the United States.  He also said that 
Italy shared the idea that creating a Special Committee on 
Safeguards and Verification in the IAEA could be useful in 
combating the increased menace of nuclear terrorism and 
nuclear proliferation. 
 
3.  (SBU) Iannuzzi told SCICOUNS that Italy was interested in 
taking part in the proposed Special Committee.  However, 
referring to the last point in the U.S.-proposed Draft terms 
of reference for the Special Committee (paragraph 8 of 
reftel), Iannuzzi responded that the GOI preferred resources 
for the Special Committee to come from existing budget 
resources within IAEA, not from extra-budgetary resources 
made available by interested states.  COMMENT:  Context for 
Iannuzzi's comment:  for the last several years, Italy has 
relied on extraordinary one-off revenue measures and spending 
deferrals to avoid bumping up against the EU deficit/GDP 
ceiling of three percent. The current Finance Minister has 
pursued the most challenging fiscal reforms in the last 
decade, while also implementing tax cuts promised during 
Prime Minister Berlusconi's campaigns.  Domestic and 
international budget experts agree that the 2005 mix of 
spending and tax cuts will not keep Italy's deficit under the 
EU ceiling.  Facing this situation, the GOI will need to turn 
 
 
to extraordinary austerity measures.  END COMMENT. 
 
SEMBLER 
 
 
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	2005ROME00469 - Classification: UNCLASSIFIED