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Cablegate: Italian Foreign Assistance in 2007: Africa And

VZCZCXRO5773
OO RUEHPOD
DE RUEHRO #0697/01 0950958
ZNR UUUUU ZZH
O 050958Z APR 07
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7615
INFO RUCNMEU/EU INTEREST COLLECTIVE PRIORITY
RUEHGB/AMEMBASSY BAGHDAD PRIORITY 0281
RUEHLB/AMEMBASSY BEIRUT PRIORITY 0280
RUEHBUL/AMEMBASSY KABUL PRIORITY 0356
RUEHFR/AMEMBASSY PARIS PRIORITY 2236
RUEHFL/AMCONSUL FLORENCE PRIORITY 2301
RUEHMIL/AMCONSUL MILAN PRIORITY 8535
RUEHNP/AMCONSUL NAPLES PRIORITY 2451
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0730
RUEHRO/ODC ROME IT PRIORITY
RHMFISS/HQ USEUCOM VAIHINGEN GE PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY 4506

UNCLAS SECTION 01 OF 03 ROME 000697

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/WE; EUR/ERA; EB/IFB/OMA
USAID/COO/ODP/BMD FOR O'MEARA
PARIS ALSO FOR USOECD
USEU BRUSSELS FOR PATRICIA LERNER/USAID

E.O. 12958: N/A
TAGS: ECON EAID EFIN PREL PGOV IR LE AF IT
SUBJECT: ITALIAN FOREIGN ASSISTANCE IN 2007: AFRICA AND
WOMEN'S ISSUES EMPHASIZED, MODEST ASSISTANCE TO THE MID-EAST

REF: 06 ROME 1870

ROME 00000697 001.2 OF 003


SUMMARY
--------

1. (SBU) Italy's 2007 budget included 1.88 billion euros
(0.12 percent of GDP) for foreign assistance, a slight
increase from 1.81 billion euros in 2006. The Ministries of
Foreign Affairs and Finance disburse most assistance funding.
MFA's Office of Development Cooperation (ODC) -- Italy's
USAID equivalent -- saw its 2007 budget increase to 607
million euros, primarily to pay UN back dues, the funding for
which the Berlusconi government had drastically cut in 2006.
ODC's stated priorities are to promote development in Africa
and women's issues.

2. (SBU) On March 27, Parliament approved an additional
75.5 million euros of foreign assistance for Afghanistan,
Lebanon, and Sudan. While ODC leadership has said its
development work in Iraq is "finished," Parliament allocated
30 million euros for Iraqi reconstruction assistance on March
27. Italy and Iraq also signed in January 2007 a cooperation
treaty providing a credit line of 400 million euros for
infrastructure development. The MFA Iraq Task Force, which
currently oversees Iraqi development assistance, will turn
over the Iraq aid portfolio to ODC January 2008. End summary.

GOI FOREIGN ASSISTANCE OVERVIEW
-------------------------------

3. (SBU) Italy's Parliament approved 1.88 billion euros for
foreign assistance in 2007 (0.12 percent of GDP -- or 0.13
percent of GDP, when we include the additional 105.5 million
euros Parliament approved March 27), slightly higher than the
2006 amount of 1.81 billion euros. This is the first time
since 1992 that the GOI has not decreased foreign assistance
from the previous year. (Note: In 1992, then-PM Giuliano
Amato drastically cut MFA's foreign assistance budget,
because of allegations of ODC corruption and mismanagement.)
Nonetheless, Italy's foreign assistance funding is still well
below the 2007 EU member state commitment of 0.33 percent of
GDP and the 2009 EU member state commitment of 0.7 percent of
GDP.

4. (U) Parliament directed most 2007 foreign assistance
funding to the Ministries of Foreign Affairs (MFA) and
Finance (MOF), at 1.011 billion euros and 501 million euros,
respectively.

GOI Ministries' Foreign Assistance
Budgets 2006-2007 (millions of euro)
------------------------------------

FY FY Chg. Chg.
2006 2007 Pct Value

Foreign Affairs 862 1011 17 149
Finance 597 501 -16 -96
Defense 140 154 10 14
Environment 96 97 0.01 1
Economic Development 67 67 0 0
Health 32 32 0 0
Interior 11 9 -18 -2
Communications 5 6 .2 1
University/Research NA 3 NA NA
Agriculture 0.5 0.9 80 0.4
Justice 0.6 0.6 0 0

5. (SBU) Of the over one billion euro MFA funding,
Parliament allocated 607 million euros to ODC for development
assistance. (Comment: The remaining MFA "foreign
assistance" budget of over 400 million euros is to maintain
diplomatic missions abroad and cover costs associated with
foreign assistance administration.) The foreign assistance

ROME 00000697 002.2 OF 003


budgets of the Ministries of Defense, Finance, Environment,
and Health are largely channeled to international
organizations, e.g., World Bank, NATO, and WHO.

PROTEZIONE CIVILE
-----------------

6. (U) In addition to the 1.88 billion euros for 2007,
Parliament budgeted 1.5 billion euros to Protezione Civile.
(Note: Besides managing domestic disaster relief, Protezione
Civile provides emergency assistance abroad.) Protezione
Civile is under the mandate of the Prime Minister's office
and has a large operating budget and some foreign disaster
assistance funding. Once Parliament declares an emergency,
however, Parliament empowers Protezione Civile to ask all
government ministries for resources.

FOREIGN ASSISTANCE FROM THE REGIONS
-----------------------------------

7. (U) Italy's twenty regions also provide foreign
assistance, though according to MFA contacts, the total
amount (around several million euros per year) is "tiny,"
compared to the GOI's national foreign assistance budget.
Italy's regions are required by law to inform the MFA and MOF
of any international assistance activity they conduct with
foreign governments. While regions can carry out foreign
assistance programs independently, regions often coordinate
with the MFA.

MFA FOREIGN ASSISTANCE PRIORITIES
---------------------------------

8. (SBU) MFA's Office of Development Cooperation (ODC) --
Italy's equivalent to USAID -- saw its 2007 budget increase
to 607 million euros over 499 million euros in 2006. ODC
Director General Alain Economides said March 14 that Africa
and women's issues are MFA foreign assistance priorities
under PM Prodi's government. (Note: ODC priorities had
focused on development assistance in Mediterranean countries
the past two decades.)

9. (SBU) MFA Deputy Foreign Minister Patrizia Sentinelli
recently confirmed ODC priorities before a parliamentary
committee on foreign affairs. (Note: Sentinelli, a leftist
parliamentarian, has had competence for ODC's portfolio since
summer 2006.) Sentinelli explained that programs in
agriculture, the environment, and health would be the primary
means to assist Africa and women. Additionally, she said,
ODC will devote 50 percent of its 2007 bilateral assistance
budget to promoting development in Africa.

10. (SBU) Fabrizio Nicoletti, ODC Budget Director, provided
us a breakdown of ODC's 607 million euro budget for 2007 as
follows (figures in millions of euro):

Multilateral assistance (e.g., UN and EU) = 280
Bilateral assistance = 107
Assistance to NGOs = 100
Assistance to NGOs for admin costs = 56
ODC admin costs = 44
Emergency assistance/other = 20

11. (SBU) Nicoletti noted that the 2007 budget increase is
largely to pay UN back dues, which ODC categorizes as
"multilateral assistance," the funding for which the
Berlusconi government had drastically cut by 230 million euro
in 2006.

12. (SBU) Nicoletti also explained that ODC considers its
development work in Iraq "finished" with the pullout of
Italian troops and has no 2007 funds budgeted for Iraq. He
explained that current ODC view is that Iraq is "rich" (with
oil) and did not need development assistance. (Note: MFA's

ROME 00000697 003.2 OF 003


Iraq Task Force currently handles Iraq development
assistance. Task Force members informed us they will turn
over the Iraq aid portfolio to ODC January 2008. End note.)

13. (SBU) Nicoletti also reported that ODC was "optimistic"
Parliament would soon debate an additional 260 million euros
for the Global Fund to Fight AIDS, Tuberculosis, and Malaria.
(Note: These funds will cover previous years' pledges to
the Global Fund that the GOI did not honor.)

IRAQ, LEBANON, AFGHANISTAN, AND SUDAN
-------------------------------------

14. (SBU) Subsequent to Parliament approving the GOI 2007
budget, including foreign assistance, in December 2006,
Parliament approved March 27 an additional 75.5 million euros
of foreign assistance for Afghanistan (40 million), Lebanon
(30 million), and Sudan (5.5 million -- specifically, for
Darfur). Parliament also allocated 30 million euros for Iraq
to continue Italy's "humanitarian, stabilization, and
reconstruction mission," to be allocated and disbursed by the
Italian Embassy in Baghdad. Additionally, Italy and Iraq
signed in January 2007, a bilateral "Friendship, Partnership,
and Cooperation" treaty providing Iraq 400 million euros in
credit assistance over the next three years to develop its
infrastructure.

COMMENT
-------

15. (SBU) Italy's increase in its 2007 foreign assistance
funding is encouraging, although GOI intentions on Iraq
foreign assistance over the next few years are not clear. On
the one hand, Deputy FM Sentinelli has declared that all ODC
development assistance in Iraq is finished (reftel). Should
she continue to set ODC policy when ODC inherits the Iraq
foreign assistance portfolio from the Iraq Task Force in
2008, assistance to Iraq may suffer. On the other hand,
Parliament's recent approval of some 30 million euros of Iraq
foreign assistance suggests Parliament's continuing interest
in Iraqi development and reconstruction. End comment.

SPOGLI

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