Cablegate: Scenesetter for Italian Minister Claudio Scajola's

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PP RUEHAG RUEHROV RUEHSL RUEHSR
DE RUEHRO #1048/01 2541139
ZNY CCCCC ZZH
P 111139Z SEP 09
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 2645
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEHFL/AMCONSUL FLORENCE PRIORITY 3784
RUEHMIL/AMCONSUL MILAN PRIORITY 0214
RUEHNP/AMCONSUL NAPLES PRIORITY 3993
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 ROME 001048

NOFORN
SIPDIS

DOE FOR ENERGY SECRETARY CHU
DOE FOR A/S DAVID SANDALOW
DOE FOR INTERNATIONAL ENERGY COOPERATION DAS YOSHIDA
DOE FOR OFFICE OF NUCLEAR ENERGY DAS MCGINNIS
DOC FOR ENERGY, ...

SUBJECT: SCENESETTER FOR ITALIAN MINISTER CLAUDIO SCAJOLA'S
VISIT TO WASHINGTON

REF: A) ROME 878 B) ROME 678 C) ROME 283 C) 08 ROME
1191

ROME 00001048 001.2 OF 003

Classified By: A/DCM Barbara Leaf for reasons 1.4b and d

1.(C/NF) SUMMARY: Italian Economic Development Minister
Claudio Scajola will visit Washington September 29 as part of
a week-long tour of the United States. Scajola is one of
Italy's most powerful cabinet officers. He and his staff have
told us that they consider this a very important visit. The
key event will be a September 29 meeting with Energy
Secretary Chu. At this meeting Scajola hopes to sign
agreements on research and development and on industrial
cooperation on nuclear power. Scajola's visit is an
excellent opportunity to promote and protect the rights of
U.S. firms that wish to participate in Italy's multi-billion
dollar nuclear power project. This is also an opportunity for
us to push for greater Italian cooperation on European Energy
Security, and to ask for Scajola's support for the launch in
Italy of DoE's Megaports (radiation detection in container
ports) program. The Italian delegation is also seeking a
meeting with USTR Kirk and hopes to raise several
economic/commercial issues. Given the importance that GOI
officials are attaching to Scajola's trip, and its potential
for advancing key pieces of our bilateral agenda, post urges
Washington agencies to assist the Italian Embassy in making
sure that the visit proceeds smoothly. End Summary

SCAJOLA TO THE U.S.
------------------

2. (C/NF) On September 27, Claudio Scajola, Italy's Minister
for Economic Development, will travel to the United States.
Scajola's long-planned and several times delayed trip comes
in part as a follow-up to his meeting in Rome this Spring
with U.S. Energy Secretary David Chu (at the G8 Energy
Ministerial). Scajola, a long-time collaborator of Prime
Minister Silvio Berlusconi, heads what amounts to a
super-ministry in the GOI. Although his title is Minister
for Economic Development, his portfolio does not include
overseas development assistance. Instead, he has
responsibility for a very wide range of Italian economic and
commercial activity, including telecommunications, energy,
trade, and intellectual property rights. He is Italy's de
facto Energy Minister.

MEETING AT DOE WITH SECRETARY CHU
----------------------------------

3. (C/NF) The centerpiece of Scajola's visit will be his
September 29 call on Secretary Chu. Scajola's staff
frequently remind us of the high regard in which Scajola
holds Secretary Chu. Scajola believes that Chu's May visit to
Rome marked the beginning of a warm professional friendship;
Scajola clearly sees this visit to Washington as a
reciprocation of Chu's May visit. In Washington Scajola hopes
to sign a Research and Development agreement that has been
under discussion for some time, and a new ""Industrial
Cooperation Agreement"" on nuclear power that Scajola first
proposed during his May 2009 bilateral meeting with Secretary
Chu.

RESEARCH AND DEVELOPMENT AGREEMENT
----------------------------------

4. (SBU) The research and development agreement has been
under discussion for some time. We understand, however, that
requested Italian revisions and the possible need for EURATOM
approval could scuttle chances for a September 29 signing.
On 8 September Scajola's staff told us that they consider it
very important for this agreement to be signed on September
29. (COMMENT: In terms of U.S. interests, we think the
Industrial Coopertion agreement is more important than the
R&D agreement. We also think that while Scajola would like
to sign both, staff claims notwithstanding, he too is more
interested in the Industrial Cooperation agreement.)

ROME 00001048 002.2 OF 003

INDUSTRIAL COOPERATION AGREEMENT
-------------------------------

5. (C/NF) Since his appointment in Spring 2008, Scajola has
been leading the charge in Italy for a return to nuclear
power. USG efforts to promote and protect the interests of
U.S. firms in this multi-billion dollar project suffered a
major blow in February 2009 when Italy announced an
Italo-French agreement that would allow French firms to build
the first four of Italy's new nuclear reactors. At their May
2009 bilateral meeting in Rome, Scajola seemed to pre-empt
Secretary Chu's expected call for a level playing field by
offering to negotiate a like agreement with the U.S.
Secretary Chu agreed to work out such a deal, and DoE staff
have been working with the Italian Embassy in Washington on
text with the aim of signing it on September 29.

6. (C/NF) We have recently seen indications that Scajola has
another reason for supporting the involvement of U.S. firms
in Italy's re-nuclearization. The Franco-Italian agreement
had the effect of denying opportunities to Italian firms that
hoped to help build the new plants. One of these firms,
Ansaldo Nucleare, has close ties to Westinghouse, one of the
U.S. firms most interested in obtaining Italian contracts.
Ansaldo Nucleare and Westinghouse are expected to formally
announce a consortium agreement in Washington on September
29. Ansaldo Nucleare is based in Scajola's home region of
Liguria. So if Westinghouse gets a piece of the action,
Ansaldo -- Scajola's hometown company -- benefits.
(COMMENT: We need all the help we can get in our advocacy
efforts for U.S. firms. If Scajola also has a local interest
in seeing U.S. firms obtain contracts, that is an advantage
we should seize and maximize to U.S. benefit.) Scajola's
visit represents a critical opportunity to get this
Industrial Cooperation agreement signed. A failure to secure
this agreement is likely to make it significantly more
difficult for U.S. firms to win contracts in Italy's
substantial nuclear power project.

EUROPEAN ENERGY SECURITY
- - - - - - - - - - - -

7. (C/NF) Prime Minister Silvio Berlusconi's close personal
ties with Vladimir Putin and the very strong corporate ties
between Italian energy parastatal ENI and Russia's Gazprom
often put Italy squarely at odds with U.S. and EU energy
security efforts. Italy's energy policy too often reflects
Russian, rather than European, priorities. For example, the
Italian government is deeply ambivalent about the EU's
Nabucco Caspian pipeline, and ENI is poised to help GAZPROM
construct Black Sea and Baltic Sea pipelines that will only
deepen EU's dependence on Russia. ENI, 30 percent owned by
the Italian Government, often appears to dictate GOI energy
policy and uses its influence, through the GOI, to block EU
energy market liberalization plans. Italy is taking some
steps in the right direction: In addition to the nuclear
power effort, one of the Caspian ""Southern Corridor""
projects, the proposed Turkey-Greece-Italy (TGI) pipeline
will be built by an Italian company. Liquid Natural Gas
projects promise further diversification. It would be
helpful if during his time in Washington, Minister Scajola
were to hear in clear terms our long-standing concerns about
European energy security. He should be reminded that we hope
Italy will support European efforts to diversify energy
sources, types and routes, particularly through the ""Southern
Corridor"" projects -- including Nabucco -- intended to bring
alternative Caspian gas to the EU. COMMENT: Scajola is more
concerned about and active on energy security issues than any
other senior member of the GOI, so we would be preaching to
the choir here. This would, however, give Scajola useful
ammunition to bring home: a strong message to PM Berlusconi
in particular that Washington is concerned about Italy's
energy security actions.

MEGAPORTS
---------

ROME 00001048 003.2 OF 003

8. (C/NF) Post has been working for several years to convince
the Italian government to support the launching in Italy of
DoE's Megaports program, an effort that would put radiation
detectors in key shipping ports. Because of the strong
influence of organized crime in Italian ports, it is
especially important that this program be implemented in
Italy. Unfortunately, Italian officials continue to drag
their feet. To break this impasse, it is critical at this
point for Secretary Chu to solicit Scajola's advice and
support in getting Megaports launched in Italy.

POSSIBLE ISSUES FOR USTR
------------------------

9. (SBU) On 8 September the Italian Ministry of Foreign
Affairs gave us a preview of other issues that Scajola may
raise in Washington. The Italians are seeking a meeting with
USTR Kirk, but we understand that meeting has not been
confirmed as of yet. If the Italian delegation does have an
opportunity to raise economic/commercial concerns, we are
told that they would include: ""Buy American"" issues,
anti-dumping actions affecting Italian pasta, U.S. customs
treatment of Italian gold jewelry, Italian concerns regarding
certain Cuba-related certifications affecting trade in
nickel, and Italy's interest in participating in railroad
infrastructure projects in the United States.

PLANNING CONCERNS
-----------------

10. (C/NF) Post has picked up on what appear to be some
organizational problems with regard to this visit at the
Italian Embassy in Washington. This may be the result of
summer-time staffing gaps there. Scajola's fear-based
management style may also be a factor. Given the number of
key U.S. interests that will be affected by the visit, We ask
that Washington agencies, especially State, DoE, and USTR,
work closely with the Italian Embassy in an effort to smooth
the way for this visit. Scajola has a reputation for being
proud, demanding, and protocol conscious.

COMMENT
-------

11. (C/NF) Scajola's visit provides us with significant
opportunities to make progress on a wide variety of U.S.
interests. We could bolster the position of U.S. firms
seeking opportunities in the multi-billion dollar Italian
nuclear project, make progress on Italy's problematic energy
security policies, and perhaps even get Megaports going in
Italy.
THORNE

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