US embassy cable - 05ROME2051

C O N F I D E N T I A L ROME 002051 
 
SIPDIS 
 
 
SENSITIVE 
 
DEPT FOR EB/IFD/ODF (DEMARCELLUS) 
 
E.O. 12958: DECL: 06/15/2015 
TAGS: PREL, PGOV, EAID, EIND, ECON, IT, IZ, EUN, IRAQI FREEDOM 
SUBJECT: U.S.-EU IRAQ CONFERENCE, ITALY UNLIKELY TO 
ANNOUNCE NEW AID 
 
REF: SECSTATE 103222 
 
Classified By: A/Econ Min-Couns Kathleen Reddy for reasons 1.4 (b)(d). 
 
1. (SBU) Summary: Italian Foreign Minister Fini will attend 
the Brussels conference, but aid officials tell us Italy will 
not commit to new assistance for Iraq.  End summary. 
 
2. (SBU) Visiting A/S Fried discussed reftel points with 
Giovanni Castellaneta, Diplomatic Advisor to Prime Minister 
Berlusconi and raised the need for Italy to fulfill its aid 
promises and unfreeze Iraqi assets.  Castellaneta did not 
reply directly. 
 
3. (U) Econoff also delivered reftel points to Federica 
Ferrari-Bravo, Office Director for the Middle East at the 
Directorate General for Development Cooperation at the 
Ministry of Foreign Affairs.  Ferrari-Bravo stated that 
Foreign Minister Gianfranco Fini plans to head Italy's 
delegation to the Brussels conference accompanied by MFA 
Director General for the Middle East and Mediterranean 
Riccardo Sessa. 
 
4. (SBU) Ferrari-Bravo noted that the Brussels conference 
will not be a pledging conference, and she indicated the GOI 
will not announce new aid initiatives.  Italy, she predicted, 
will reaffirm its intention to assist with the reconstruction 
of Iraq according to its existing Madrid pledge and to 
"consider other needs, if necessary."  She said the GOI will 
give a more specific update on disbursements of its Iraq aid 
at the upcoming meeting of the International Reconstruction 
Fund Facility for Iraq in Amman.  In response to the specific 
suggestion in reftel that Italy provide additional water and 
demining assistance, Ferrari-Bravo stated Italy is already 
fulfilling its obligations in those areas. 
 
5. (C) Roberto Ciciani, Director of the Office of 
Money-Laundering/Illicit Financial Crimes (which also has 
jurisdiction over the Iraqi assets issue) at the Finance 
Ministry told Econoff June 15 that roughly six million 
dollars in frozen Iraqi assets held in accounts at UBAE Arab 
Italian bank should be repatriated to Iraq in the coming 
weeks.  The Italian Financial Security Committee rejected May 
12 UBAE's request to unfreeze, but not repatriate, the 
assets.  Ciciani said that the remaining assets (Note: He did 
note give an exact figure but we estimate $60 million. End 
note.) held in the name of Iraqi institutions covered by U.N. 
Resolution 1483, have claims against them in Italian courts 
that pre-date the effective date of the UN Resolution.  In 
almost all cases, the claims against the frozen assets exceed 
the value of the assets frozen.  Ciciani said the Financial 
Security Committee was certain that there are no "secret 
Iraqi accounts" in Italy.  After the UBAE transfer, Ciciani 
believes little, if any, of the additional funds could be 
repatriated to Iraq because of existing liens against these 
funds. 
 
6. (C) Comment: The GOI is very reluctant to take on 
additional assistance obligations, or even to commit to 
accelerating disbursements of its Madrid pledge, for fear 
that it will be unable to deliver.  With Italy now in 
recession, and on a course to exceed once again the EU's 
three-percent budget deficit ceiling, Italy's foreign aid 
budget may again face mid-year "spending freezes" as in 2004. 
 Italy views the Brussels conference as an important 
opportunity to improve donor coordination and discuss 
GOI-funded reconstruction projects already underway, but we 
expect the Italian delegation will provide few if any 
"deliverables."  End comment. 
 
SEMBLER 
 
 
NNNN 
 2005ROME02051 - Classification: CONFIDENTIAL