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Analytical Studies

Country Objectives for the Genoa Summit Meeting 2001
Italy

Contents:
Overview
Political Data
Economic Data
Summit Issues

Italy: an Overview

The country's political landscape is notorious for frequent changes of government, totalling 59 since 1945, and was shaken by the Mani Pulite investigations that exposed corruption at the highest levels of politics and big business in the 1990s.

Elections in May 2001 saw Silvio Berlusconi and his centre-right coalition, Casa delle Libertà, emerge as the winner. He succeeded the leftist L'Ulivo government of Giuliano Amato, after having been Prime Minister for eight-months in 1994. Berlusconi government's 2001 election promises are quite ambitious and should set Italy in the right direction both in terms of political stability and economic growth. Some of the highlights include the reorganisation of the state bureaucracy, constitutional and legal reforms, a ten-year plan for public works, and a development plan for the South. He will also push for a crackdown on illegal migration, an issue that he pressed during his election campaign, by advocating that no immigrant be allowed to enter Italy without having secured a job and a work permit. Among the long-term problems facing Italian domestic politics are the ageing and shrinking population, organised crime, as well as regaining competitiveness in the global economy and a relative strength within the EU.

Italy at the Summit

A matter concerning Italy that will undoubtedly emerge at the Summit, having also been in the media spotlight for the past several months, is the change of the federal government. Although Italy is not the sole G8 country to hold an election since the Okinawa Summit, the election of Silvio Berlusconi and the Casa delle Libertà is thought to have serious implications not only to the conduct of Italian foreign policy and the internal restructuring, but more importantly, to the Summit, considering Italy has this year's Presidency.

The former President of the Council, Giuliano Amato, as a staunch supporter of multilateralism and summitry, developed a number of themes in conjunction with the Ministry of Foreign Affairs and its Minister, Lamberto Dini, to be addressed at the G8 summit. He placed particular emphasis on the ties with the Third World and the correlated issues of poverty, disease, debt, and development, which was demonstrated at a number of meetings held with the developing countries and the Italian contribution both through foreign aid and conflict prevention and peacekeeping. Similarly, the additional issues that Amato identified, also stated in the Libro Bianco 2000 of the Italian Ministry of Foreign Affairs, were consistent with the previous Italian initiatives and included environment and energy, the global economy and finance, conflict prevention, and global governance.

The so-called "new Italian diplomacy" has attempted to bridge the traditional divide between politics and economics, with the aim of fostering an integrated tactic with respect toward particular States or regions, as demonstrated in numerous bi- and multilateral diplomatic agreements. Such was the vision of the previous government. According to Mr. Dini, their successors are to inherit "a large patrimony," "a solid base" to be maintained and reinforced, and it is his strong belief that Italy should demonstrate a united front in its external dealings through a continuity of approach. The nomination of Mr. Renato Ruggiero (formerly the head of the WTO) to the position of the Minster of Foreign Affairs has provided the international community with the needed reassurance, but it has also raised questions of the dichotomy between the commitment of the previous government to the developing world and Mr. Ruggiero's own experience with the global economy and capital. At the same time, the fact that Francesco Olivieri, the diplomatic advisor to both the D'Alema and Amato governments, is continuing his work in the position of a sherpa at the Summit indicates a relative commitment of the new government to continuity.

The G8 Summit in Genova is the first larger international meeting for the Berlusconi government at which the direction of Mr. Berlusconi's foreign policy will become more evident. Nonetheless, despite this and despite the criticism in the European press of Mr. Berlusconi and the speculation as to the themes the new government will choose to address, no surprises are expected at the Summit. It is Mr. Dini's conviction that there is little space for manoeuvre for the new government: the G8 agenda with its numerous themes has been constructed over the past months - and the only element of newness will be the first opportunity for many of the leaders to meet in person.

Thus, Italy will most likely concentrate its efforts on a few precise topics: poverty reduction, the fight against disease, the environment, digital divide, and financial architecture. This selection will be maintained since, according to many analysts, it is the unique one in which concrete results can be obtained. Although the degree of emphasis on the developing world would be expected to vary in view of the new government, Minister Ruggiero stated that this line of foreign policy will not change, as "…we have to remember that the Italian foreign policy is one of peace and solidarity with the developing world." However, it is very likely that the new centre-right government might favour the dialogue on certain more delicate themes, including the cross-Atlantic co-operation.

The final concern of the state presiding over and organising the Summit is the issue of security and the comprehensive agenda; many view this as a test for new Italian government, which will determine its credibility and legitimacy.

Political Data

Head of State: Carlo Azeglio Ciampi, Since 1999

Head of Government - Prime Minister of the Ministers:  Silvio Berlusconi

Vice-President of the Council of Ministers:  Gianfranco Fini

Undersecretaries of State: Gianni Letta & Paolo Bonaiuti

Minister of Foreign Affairs: Renato Ruggiero

Minister of the Interior: Claudio Scajola

Minister of Defense: Antonio Martino

Minister of Economics & Finance: Giulio Tremonti

Minister of Education: Letizia Moratti

Minister of Productive Activities: Antonio Marzano

Minister of the Environment: Altero Matteoli

Minister of Justice: Roberto Castelli

Minister of Agriculture: Giovanni Alemanno

Minister of Work & Health: Roberto Maroni

Minister of Culture: Giuliano Urbani

Minister of Communication: Maurizio Gasparri

Minister of Health: Girolamo Sirchia

Minister of Innovation & Technology: Lucio Stanca

Minister of Institutional Reforms: Umberto Bossi

Minister of Parliamentary Relations: Carlo Giovanardi

Minister of Regional Transactions: Enrico LaLoggia

Minister of Equal Opportunities: Stefania Prestigiacomo

Minister for the Italians in the World: Mirko Tremaglia

Minister of Communitarian Political: Rocco Buttiglione

Minister for the Performance of Governmental Programs: Giuseppe Pisanu

Minister of Public Functions and the Coordination of the Intelligence Agency and Emergency: Franco Frattini

Minister of Infrastructures and the Transports: Peter Lunardi

Goverment

TYPE: Republic with two legislative houses (Senate [326]; Chamber of Deputies [630])

PARLIAMENT: The Parliament has two chambers. The House of Representatives (Chamber of Deputies) has 630 members, elected for to five-year term, 475 members in single-seat constituencies and 155 members by proportional representation. The Senate of the Republic (Senate of the Republic) has 326 members, elected for to five-year term, 232 members in single-seat constituencies, 83 members by proportional representation and 11 senators for life.

Presidential Elections: Held every seven years.
Most recent Presidential Elections: May 13, 1999.
Next Presidential Elections: May 2006
Most recent National Elections: May 13, 2001

Economic Data

GDP: L2,126trn (1999); US$1.17 trn (1999, at market exchange rate); US$1.27trn (1999, at PPP)
Source: The Economist

GDP per capita: US$20,289 (1999, at market exchange rate); US$22,034 (1999, at PPP)
Source: The Economist

GDP Growth: 1.8% (average, 1995-99); 1.4% (1999)
Source: The Economist

Consumer Price Inflation (av; %) : 2.9% (average, 1995-99); 1.6 (1999, average)
Source: The Economist

Unemployment rate (%) : 10.50 (2000)
Source: The Economist

Interest Rate: 3.0 (1999) Three-month rate on treasury bills ;    4.7 (1999) Government bond rate, ten-year
Source: http://www.toronto.italconsulate.org/

Exchange Rate: US$0.928 per Euro (April 24, 2000)
Source: http://www.toronto.italconsulate.org/

Current-account balance (US$ bn): 8.2 (1999)
Source: The Economist

Major trading partners:

Export to: Germany, France, US, UK, EU
Import from: Germany, France, Netherlands, UK, and EU

Major exports:
engineering products, textiles & clothing & leather, transport equipment and chemicals

Major imports:
Engineering products, transport equipment, chemicals and energy products

Summit Issues for Italy

POVERTY REDUCTION

In all statements made by the former President of the Council of Ministers of Italy, Giuliano Amato, there has been a clear indication that the fight against poverty (poverty reduction and debt cancellation) will be the key theme at the 2001 G8 Summit in Genoa. Furthermore, the newly formed Berlusconi government has pledged to continue in the same vein, thereby reaffirming the G8's commitment and Italy's lead on the issue of poverty reduction.

The overall consensus appears to be that while debt cancellation initiatives have done much to aid developing countries, a long-term solution will materialise only if the causes of poverty are addressed and strategies are developed accordingly. The three pillars of this strategy are as follows: a) allowing products from developing countries to enter markets freely as outlined in the "Everything but Arms" initiative developed by the European Union; b) the promotion of Foreign Direct Investment, especially in the area of technology; c) "social" investments in education/professional development, nutrition, health, and sanitation. In order to achieve this goal, the Italian government has stated that strategies for poverty reduction will be discussed among members of the G8, but also with the Secretary General of the UN, possibly two representatives from UN Agencies, and Heads of State and Government representing Africa, Asia, and Latin America.

In terms of debt cancellation, the G8 will continue with the "Enhanced HIPC Initiative" whereby it will be possible for other countries to be added to the existing list of 22 Heavily Indebted Poor Countries. In recent statements to the Italian media, Berlusconi has indicated that "Italy will cancel 100% of all debts for developing countries that will have reached the decision point." The past year has been an illustrious one for Italy in terms of its national and international obligations, as 18 bilateral agreements on debt restructuring have been signed (totalling approximately US 1.57 million), 25 are in the process of negotiation, and 16 multilateral agreements have been signed, (Italy's contribution was close to US 2.7 million), 7 of which with HIPC countries (Benin, Burkina Faso, Mali, Mauritania, Senegal, and Tanzania). A document of the Italian presidency, entitled "Beyond the Debt Relief," demonstrates that Italy is conscious of the need to incorporate a "virtuous" economic development in the plan. There is a large body of evidence that suggests that if Italy can initiate the development of an effective strategy for overcoming poverty and disease in Africa, in particular, then the 2001 G8 Summit in Genoa will have been a successful one.

DISEASE

Another important area that will be focused at the Summit is disease. Italy's stance is to increase awareness of major diseases and to put in place substantial preventative measures, especially for the poorer developing nations. Although the agenda will mainly focus on AIDS and other infectious diseases, Italy would also like to concentrate on known diseases, such as Malaria and TB, that are treatable with the proper medication yet are still rampant in the developing world. Italy stresses education especially for mothers who in most cases transmit their diseases to the unborn child. As well, the focus will be on the increasing availability of medicinal supplies, access to resources, and lowering the cost of curative medicine for Malaria and TB, thereby increasing access to these supplies for the developing world. Italy also wants to ensure better sanitation for these countries as to ensure control overall spread of these infectious diseases. Furthermore, Italy wants to put forth the proposal that concrete prevention programs be put in place to promote a healthy future for these countries. Italy also proposes a trust fund to be established at the Genoa summit, whereby governments can donate funds to help provide relief and promote the overall health of the developing nations, while working in cooperation with the UN and other international relief agencies.

NORTH-SOUTH DIGITAL DIVIDE

A critical component of the strategy to reduce poverty throughout the international community is bridging the digital divide that currently exists between industrialized and developing nations. In order to achieve this goal, the Digital Opportunity Taskforce (DOT Force) was established based on the Okinawa Charter on Global Information Society, which was adopted at the Kyushu-Okinawa Summit in 2000. In its Presidency of the 2001 G8 Summit, the Italian Government has initiated a series of consultations within the framework of the DOT Force in order to identity effective methods with which to increase the power of information and communications technologies (ICT) in developing nations.

The DOT Force has completed its final report Digital Opportunities For All: Meeting the Challenge, which will be presented at the G8 Summit in Genoa. Recently, the Italian government in particular, has stressed that the development of a set of guidelines outlining the benefits of new technology is not sufficient; the DOT Force must work to create concrete projects and commit itself to undertake their installation. As such, the DOT Force has proposed a "Genoa Plan of Action" consisting of the following nine points:

  1. Help establish and support developing country and emerging economy National eStrategies.

  2. Improve connectivity, increase access, and lower costs.

  3. Enhance human capacity development, knowledge creation, and sharing.

  4. Foster enterprise and entrepreneurship for sustainable economic development.

  5. Establish and support universal participation in addressing new international policy and technical issues raised by the Internet and ICT.

  6. Establish and support dedicated initiatives for the ICT inclusion of the Least Developed Countries.

  7. Promote ICT for health care and in support against HIV/AIDS and other infectious and communicable diseases.

  8. National and international effort to support local content and applications creations.

  9. Prioritize ICT in G8 and other development assistance policies and programs and enhance coordination of multilateral initiatives.

THE ENVIROMENT

Environment is becoming an increasingly important issue for the G8 member countries. The new Prime Minister of Italy, Silvio Berlusconi, is following in the steps of his predeccessor, Amato, by taking a hard line on environmental policy. Italy will respect the Kyoto protocol and Berlusconi, along with his environment minister Gianni Mattioli, will distance himself from the US policies and will support the EU's position on ratifying the Kyoto agreement. This will present an interesting debate at the Genoa summit, since the Kyoto protocol is open for discussion. Yet, Berlusconi admits that the US position cannot be ignored and must be looked at and respected. For Italy specifically, according to the Kyoto protocol, the goal is a reduction of 10.6% from the 1998 levels. Italy in the 1990's spent over 7 billion dollars on climate change due to the many natural disasters that have significantly contributed to the climate change of the country over the past 30 years. Presently, Italy plans to devote between .2-2% of its budget to an environmental initiative that specifically deals with climate change.

NEW FINANCIAL ARCHITECTURE

In the words of the former President of the Council Giuliano Amato, financial architecture is one of the classical and recurring themes that are discussed at the G7 Summits. Furthermore, Italy will emphasise debt reduction as it relates to the current international financial regimes and to the needed changes of the financial architecture as a part of its commitment to the fight against poverty. The Ministry of Foreign Affairs has been pursuing a two-pronged strategy when dealing with the global economy: i. Stimulating and sustaining the process of internationalisation and the integration of the emerging markets, and ii. Supporting the formation of institutions to respond to the exigencies of these new developments and of the deep and rapid transformation. Mr. Amato also indicated that questions of the abuse of the financial system (such as tax havens, off-shore centres, and money-laundering) would also undoubtedly arise.

At the same time, however, Europe is skeptical about Italy's own financial system and the economy, in which it is said that the Mafia controls about 20% of all businesses with an annual turnover of about $133bn, the equivalent of 15% of GNP. The EU Commissioner, Mario Monti, is also looking into allegations of antitrust on the part of certain Italian banks; an investigation into the practices of the Italian government was contemplated following a growing suspicion in Bruxelles of a possibility of an Italian bank cartel. The sentiment has been accentuated with the election of Mr. Silvio Berlusconi as the Italian Prime Minister, who has been accorded a "cautious" welcome, while the French Foreign Minister, Hubert Vedrine, even said that Europe would watch the actions of the new government closely.

Questions were raised about potential conflicts of interest, the criminal cases against him, and his choice of allies. One of his campaign promises - to revise and simplify the administrative and tax law and the civil and criminal codes - has been just as contentious. The criminal investigations for financial irregularities in Italy, as well as in Spain, in addition to the crime rates in the country, make the issue of financial crime and remodeling of the financial architecture a sensitive one for the Italian State.

CONFLICT PREVENTION/ THE BALKANS

The anticipated addition to the new Italian government's Summit agenda concerns the questions of conflict prevention - a "high priority" - and the related resolution of the persistent crises in the Balkan Peninsula. Albeit raised on multiple occasions during Mr. Amato's time in office, these issues have been sidelines over the past weeks only to re-emerge in a recent statement by Mr. Vattani, the Secretary-General of the Ministry of Foreign Affairs.

It is now believed that the issue of conflict prevention will indeed be among the ones to characterize the Genoa Summit - largely due to the initiative of Italy, who is holding this year's presidency. Mr. Vattani clearly indicated Italy's commitment to operations directed at maintaining peace, as evidenced in the country's involvement in the UN peacekeeping missions (second largest contingent after the US) and its contribution to the organization's budget (fifth highest). To this end, he also intends to emphasise arms control and the fight against terrorism.

The situation in the Balkans is critical for the Italian government. Minister Ruggiero participated in a meeting of the Central European Initiative (together with the Ministers of 15 Eastern European States) on June 22 in Milan. Italian involvement in the Balkans is far from a recent phenomenon; ever since the start of the crisis, Italy took an active part in attempting to end it and has contributed troops, notably through the UN. This was demonstrated just recently when it dispatched 1000 troops to Macedonia. Bringing the conflict to an end would not only satisfy the government's humanitarian goals, but would also inevitably play an important role in the fight against crime, including human smuggling, illegal immigration, drug trafficking, and other transnational criminal ties that are flourishing in the region. In the current state of lawlessness stretching from Montenegro to Albania and causing much concern at the domestic level in Italy, bilateral and regional agreements aimed at curbing crime and ending the war will not suffice. Thus, it is inevitable that addressing and diffusing the problems in the region will be high up on the Italian Summit agenda.

Prepared by Maria Banda, Marilena Liguori, Lara Mancini and Ana Milkovic, University of Toronto G8 Research Group, June 2001.

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