US embassy cable - 05ROME1125

C O N F I D E N T I A L  ROME 001125 
 
SIPDIS 
 
 
E.O. 12958: DECL: 25X1-HUMAN 
TAGS: PREL, PGOV, ECON, IT, EUN, MEPP, ITALIAN POLITICS, ITALY NATIONAL ELECTIONS 
SUBJECT: ITALY:  CENTER-LEFT'S PRODI NOT PREDICTING 2006 
VICTORY, BUT WOULD "COORDINATE CLOSELY" WITH EU IF ELECTED 
 
REF: A. ROME 1058 
     B. MILAN 135 
     C. FLORENCE 62 
     D. FLORENCE 15 (NOTAL) 
 
Classified By: THE AMBASSADOR, REASON 1.4(D). 
 
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SUMMARY 
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1.  (C)  At a farewell dinner hosted by the Ambassador, 
center-left leader Romano Prodi predicted his coalition would 
take at least three additional regions in April 3-4 regional 
voting.  He surprised the Ambassador by not predicting his 
own victory in next year's national balloting.  Despite 
efforts to pin him down on differences between Prodi and 
Berlusconi governments' foreign policies, Prodi remained 
vague -- but conceded that if elected, he would coordinate 
Italian policies more closely within the European Union, 
including policies vis-a-vis the United States.  END SUMMARY. 
 
2.  (C)  Expected center-left standard bearer in 2006 
national elections, and former European Commission President 
(1999-2004), Romano Prodi joined the Ambassador at a farewell 
dinner at Villa Taverna on March 31.  Prodi was accompanied 
by his political adviser, Dr. Riccardo Franco Levi.  DCM and 
PolMinCouns accompanied the Ambassador.  Throughout the 
evening, Prodi was relaxed and cordial.  He was notably more 
animated when discussing the European Union than in 
discussing Italian policy. 
 
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REGIONAL ELECTIONS 
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3.  (C)  Of the fourteen Italian regions voting April 3-4, 
Prodi predicted the center-left would hold the six regions it 
already controls (Emilia Romagna, Tuscany, Marche, Umbria, 
Campania and Basilicata).  He acknowledged the center-right 
would keep Lombardy and Veneto.  He was optimistic that the 
center-left would take the "three smaller regions" of 
Liguria, Calabria, and Abruzzo, and characterized Lazio, 
Piedmont, and Puglia as being "too close to call."  (Comment: 
 Consulate Naples suggests that current information more 
realistically puts Calabria in the too-close-to-call 
category, and Puglia as likely to remain with the 
center-right.  End Comment.) 
 
4.  (C)  Asked by the Ambassador about the significance of 
the regional vote, Prodi said Lazio (Rome's region) is 
symbolically important.  The fact that Berlusconi has joined 
campaigning in Lazio (Ref A) is not surprising, Prodi said. 
He will also campaign in the region. 
 
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NATIONAL ELECTIONS 
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5.  (C)  Prodi surprised the Ambassador by not predicting 
that his coalition would win 2006 national balloting.  It is 
too early to forecast the outcome, Prodi, the presumed 
standard bearer, said; the elections are still a year away. 
It is true that many voters are disillusioned with PM 
Berlusconi, he continued, but "that does not mean they will 
trust me more." 
 
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FOREIGN POLICY -- BERLUSCONI VS. PRODI 
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6.  (C)  The Ambassador probed repeatedly for specifics on 
how a Prodi-led government's foreign policy would differ from 
that of the Berlusconi government.  Prodi danced around the 
issue, repeatedly changing the subject.  "I was opposed to 
the Iraq war," he said directly.  "That has not changed." 
However, there are many issues on which it is vital that the 
United States and Europe work together, he added.  He 
referred to the "many issues" on which the U.S. and Europe 
worked successfully during his EC Presidency, mentioning 
Galileo and steel as examples.  Pressed again, Prodi finally 
conceded that an Italy led by his coalition would coordinate 
its policies more closely with the EU, including its policies 
toward the United States. 
 
7.  (C)  PolMinCouns noted that Berlusconi has made Italy's 
dealings with the Palestinians and Israel more even-handed; 
this, we believe, has increased Italy's effectiveness in the 
MEPP.  Would Prodi change this approach?  No, Prodi 
responded, but he would like to see the EU and the Quartet 
"more active" in the MEPP.  (COMMENT:  So would the current 
government.)  Pressed for what that might mean in practice, 
he changed the subject. 
 
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EUROPEAN UNION 
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8.  (C)  Throughout the conversation, the former EC President 
was more animated in his discussion of the European Union 
than of Italy. 
 
--  He stressed the importance of EU enlargement.  His 
presidency set the goal of enlargement by ten members and 
stuck to it; that was strategically important. 
 
--  He personally believed it was a mistake to delay 
Croatia's candidacy because of its non-cooperation with The 
Hague.  There would always be reasons to delay, but 
enlargement is a strategic objective. 
 
--  It is unfortunate, but unavoidable, that the press for 
Turkey's candidacy comes at the same time as ratification of 
the new European Union constitution.  It will certainly 
increase votes against the constitution in France. 
 
--  If French voters reject the constitution, "there is no 
Plan B."  The Union will continue with current procedures. 
It would not be the first great crisis the EU has faced, 
Prodi said, but French rejection would be a serious setback. 
 
--  We do not know where China will be in 15 years; will it 
work within the international system, or remain outside?  It 
is an important challenge that the U.S. and EU should meet 
together. 
 
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ITALIAN ECONOMY 
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9.  (C)  The Ambassador asked Prodi (an economist) how he 
would make the Italian economy more competitive.  In the 
past, Italy could use devaluation to relieve economic 
pressures, Prodi said, but this had allowed the country to 
avoid changing its practices and its way of thinking.  Italy 
needs innovation, he insisted.  He agreed with the 
Ambassador's litany of complaints from business 
(unpredictable judicial system, excessive government 
bureaucracy, lack of government investment in research and 
technology), and asserted such problems should be addressed, 
but offered no specifics on what he would do, if elected. 
 
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UNIVERSITY REFORM 
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10.  (C)  During the course of the evening, the conversation 
touched on university reform.  Prodi, a university professor, 
observed that it would be three times easier to reform the 
government bureaucracy then that of the universities.  A plan 
for university restructuring could not go into his political 
platform, Prodi said.  Everyone knows there is a problem, but 
no one knows how to tackle it.  In a recent meeting with 
coalition partners to discuss platform issues, Prodi 
suggested higher fees for students of cinematography than for 
those of electric engineering.  Silence and averted gazes met 
him around the table.  Italian universities are fossilized, 
no longer centers of excellence, he complained. 
 
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COMMENT 
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11.  (C)  Prodi was relaxed and friendly throughout the 
meeting.  He emphasized that he had worked well with the U.S. 
as Prime Minister and as European Commission President. 
Despite our best efforts to draw him out on foreign policy 
issues, he seemed reluctant to say anything that we would 
report in a negative light to Washington.  He was vague on 
any details related to his political plans.  A year prior to 
the national elections, the center-left's leader and expected 
candidate was muted in his optimism about his own chances and 
that of his coalition. 
 
12.  (C)  While Prodi wanted to avoid being pinned down, he 
made two telling comments.  In one, he referred to Italy as a 
"second-tier country."  The other was his admission that a 
center-left government led by him would coordinate more 
closely with the EU than with the U.S.  Both reflect the 
influence of his stint in Brussels.  We wonder if he has 
absorbed the French and German prejudices toward the country 
he now proposes to lead.  We fear that if he were elected, 
Prodi would assure us he was doing all that he could to 
support issues of importance to us behind the scenes -- but 
he would not challenge French and German EU hegemony.  END 
COMMENT. 
 
SEMBLER 
 
 
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	2005ROME01125 - Classification: CONFIDENTIAL