US embassy cable - 02ROME1848

UNCLAS ROME 001848 
 
SIPDIS 
 
STATE FOR OES/SAT/RALPH BRAIBANTI AND JULIE KARNER 
USDOC FOR IGEB/SSG GREG FINLEY 
USDOC ALSO PASS OFFICE OF SPACE COMMERCIALIZATION 
SECDEF FOR OASD/C31 RAY SWIDER 
 
E.O. 12958: N/A 
TAGS: TSPA, TSPL, ECON, IT, EUN 
SUBJECT: ITALIAN RESPONSE TO GALILEO DEMARCHE 
 
REF: STATE 42830 
 
1.  (SBU) SUMMARY:  POST DISCUSSED REFTEL GALILEO TALKING 
POINTS WITH THE MINISTRY OF FOREIGN AFFAIRS (MFA), THE 
ITALIAN SPACE AGENCY (ASI) AND THE MINISTRY OF INFRASTRUCTURE 
AND TRANSPORTATION (MIT).  THE OFFICIAL GOI RESPONSE WAS 
PROVIDED BY THE CHAIRMAN OF THE ITALIAN GALILEO STEERING 
COMMITTEE, RENATO LIBASSI, ON MARCH 29, 2002.  LIBASSI 
ACKNOWLEDGED USG CONCERNS ABOUT GPS/GALILEO INTEROPERABILITY. 
HE ASSURED US THAT MILITARY APPLICATIONS FOR GALILEO WERE 
NOT BEING EXPLORED AND THAT THE EUROPEAN UNION DID NOT INTEND 
TO ESTABLISH A REGULATORY REGIME THAT WOULD MANDATE GALILEO 
USAGE.  LIBASSI ALSO DESCRIBED ITALY'S INCREASING ROLE IN 
GALILEO'S DEVELOPMENT, INCLUDING A 25 PERCENT STAKE IN 
DEVELOPMENT COSTS.  END SUMMARY. 
 
2.  (U) POST DELIVERED GALILEO TALKING POINTS (REF) TO MIT 
DIPLOMATIC ADVISOR RENATO LIBASSI, WHO IS THE CURRENT 
CHAIRMAN OF THE ITALIAN GOVERNMENT'S GALILEO STEERING 
COMMITTEE (GSC), COUNSELOR CARLO GUICCIARDI OF THE ITALIAN 
FOREIGN MINISTRY'S DEPARTMENT OF SCIENCE AND TECHNOLOGY, ASI 
PRESIDENT SERGIO VETRELLA, FRANCO MARCONICCHIO, ASI 
REPRESENTATVE TO THE EUROPEAN UNION (EU) TECHNICAL WORKING 
GROUP FOR GALILEO, AND RETIRED ITALIAN NAVY VICE ADMIRAL 
GIORGIO CAPRA, THE FORMER GSC CHAIRMAN.  POST DISTRIBUTED THE 
TALKING POINTS WIDELY AS PART OF OUR EFFORT TO COMPOSE A 
REPRESENTATIVE PANEL OF THE DIVERSE GOI STAKEHOLDERS IN 
GALILEO FOR A PROPOSED DVC WITH SENIOR USG GALILEO/GPS 
NEGOTIATORS.  LIBASSI PROVIDED THE OFFICIAL GOI RESPONSE TO 
                       UNCLASSIFIED 
 
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THE DEMARCHE DURING A MEETING WITH EST OFFICERS ON MARCH 29, 
2002. 
 
3.  (SBU) IN THEIR MEETING WITH LIBASSI, ESTOFFS HIGHLIGHTED 
WASHINGTON CONCERNS REGARDING THE PROPOSED OVERLAY OF GPS'S 
MILITARY SIGNAL BY GALILEO, THE CREEPING EVOLUTION OF GALILEO 
FROM A CIVILIAN-ONLY TO A DUAL-USE SYSTEM AND THE POSSIBILITY 
THAT THE EUROPEANS MIGHT CREATE A REGULATORY FRAMEWORK THAT 
WOULD MANDATE GALILEO SERVICES FOR USERS OPERATING WITHIN THE 
EUROPEAN UNION.  LIBASSI NOTED USG CONCERNS, PARTICULARLY 
REGARDING THE OVERLAY OF THE M-CODE.  HE ALSO STATED THAT 
DURING THE EU TRANSPORT COUNCIL MEETING ON MARCH 25-26, THE 
MEMBER STATES REITERATED THE FACT THAT THE EUROPEAN 
COMMISSION (EC) WAS NOT COMPETENT IN THE FIELD OF MILITARY 
COOPERATION.  HE ADDED THAT THE MEMBER STATES HAD AGREED THAT 
"GALILEO WOULD NOT COMPETE IN THE MILITARY MARKET." 
LIBASSI'S MESSAGE WAS THAT THE TRANSPORT COUNCIL HAD BLOCKED 
FOR NOW EXPANSION OF GALILEO INTO THE MILITARY SECTOR AND 
THAT ANY CHANGE IN THIS DECISION WOULD BE COORDINATED IN NATO 
STRUCTURES.  GALILEO'S ABILITY TO ATTRACT PAYING CUSTOMERS TO 
ITS FEE-BASED SERVICES WOULD BE BASED ON FREE MARKET 
PRINCIPLES AND NOT REGULATORY MANDATES. 
 
4.  (SBU) LIBASSI SAID THAT THE GOI DID NOT WANT TO GET OUT 
AHEAD OF THE EU CONSENSUS ON GALILEO.  THE GOI WANTS 
GALILEO/GPS COOPERATION AND U.S.-EU DISCUSSIONS TO RECOMMENCE 
AS SOON AS POSSIBLE.  HE ADDED THAT THE GOI WAS CONFIDENT 
THAT A U.S.-EU AGREEMENT WOULD BE ACHIEVED AND THAT THERE 
WOULD EVENTUALLY BE A COMPLEMENTARY "CONVERGENCE" BETWEEN 
GALILEO AND GPS, WHICH WOULD ALLOW THE US AND THE EU TO 
PRESENT A RANGE OF COMPATIBLE GLOBAL POSITIONING AND TIMING 
                       UNCLASSIFIED 
 
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SIGNAL PRODUCTS TO THE CONSUMER. 
 
5.  (SBU) WHEN EST OFFICERS QUESTIONED GALILEO'S 
PROFITABILITY, LIBASSI RESPONDED PLAINLY THAT THE EUROPEANS 
WERE PURSUING GALILEO PRIMARILY FOR POLITICAL RATHER THAN 
ECONOMIC REASONS.  (EMBASSY COMMENT:  LIBASSI IMPLIED THAT TO 
GALILEO'S EU SUPPORTERS AN INDEPENDENT EUROPEAN GNSS WAS A 
GOAL IN AND OF ITSELF.  END COMMENT)  NEVERTHELESS, HE DID 
EXPRESS CONFIDENCE THAT SOME GALILEO SERVICES COULD PRODUCE A 
RETURN TO THE INVESTMENT OF PARTICIPATING PRIVATE FIRMS. 
SPECIFICALLY, HE CITED THE PROVISION OF TIMING AND 
POSITIONING SIGNALS WHOSE ACCURACY WOULD BE CONTRACTUALLY 
GUARANTEED, WHICH COULD PROVIDE MORE LIABILITY PROTECTION TO 
BUSINESSES USING GALILEO SIGNALS.  AT ONE POINT, HE ALLUDED 
TO A POSSIBLE GLOBAL MARITIME AGREEMENT MANDATING THE USE OF 
GLOBAL POSITIONING TRANSPONDERS ON ALL SEACRAFT AS A MARITIME 
SAFETY MEASURE.  HE NOTED THAT ITALY'S SHARE IN THE FUNDING 
OF GALILEO HAS RISEN TO 25 PERCENT OF THE TOTAL DEVELOPMENT 
COSTS, WHICH MEANS THAT ITALY'S PARTICIPATION IS EQUAL TO 
THAT OF FRANCE AND GERMANY.  THEREFORE, THE THREE COMPANIES 
THAT COMPRISE GALILEO INDUSTRIES (ALENIA, ASTRIUM (GERMANY) 
AND ALCATEL (FRANCE)) WILL LIKELY GET THE LION'S SHARE OF EU 
MONEY IN THE ENGINEERING PHASE OF THE PROJECT. 
SEMBLER 
 
                       UNCLASSIFIED 
 
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2002ROME01848 - Classification: UNCLASSIFIED