Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 08ROME1231, ALITALIA STILL FLIES UNDER THE ITALIAN FLAG BUT AT

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ROME1231.
Reference ID Created Released Classification Origin
08ROME1231 2008-10-03 15:58 2011-06-18 11:00 CONFIDENTIAL Embassy Rome
VZCZCXYZ0001
RR RUEHWEB

DE RUEHRO #1231/01 2771558
ZNY CCCCC ZZH
R 031558Z OCT 08
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC 0977
INFO RUEHRL/AMEMBASSY BERLIN 1849
RUEHFR/AMEMBASSY PARIS 2445
RUEHBS/USEU BRUSSELS 4667
C O N F I D E N T I A L ROME 001231

SIPDIS

STATE FOR BYERLY IN EEB/TRA

E.O. 12958: DECL: 10/01/2018
TAGS: EAIR ECON IT PGOV
SUBJECT: ALITALIA STILL FLIES UNDER THE ITALIAN FLAG BUT AT
A HIGH COST TO ITALY

Classified By: Economic Mi...

SUBJECT: ALITALIA STILL FLIES UNDER THE ITALIAN FLAG BUT AT
A HIGH COST TO ITALY

Classified By: Economic Minister Counselor Tom Delare
for reasons 1.4 (b, d)

1. (C) Summary: Prime Minister Berlusconi appears to have
achieved his campaign promise to save Alitalia and keep it
Italian. On September 29 the last of Alitalia's nine unions
signed onto a deal for a consortium of Italian business to
purchase the carrier.  This signals an end to the almost
two-year struggle to save the dying airline, but it remains
to be seen whether the deal will benefit Italian travelers.
The new airline will hold a defacto monopoly on intra-Italy
routes, and the debts and liabilities of Alitalia will now
become part of a ""bad company,"" headed for liquidation but
still owned by the government.  As the business of
reorganizing the company begins, the new Alitalia, now known
as Cai (Compagnia Aerea Italiana), still faces an uphill
battle to return to profitability and to convince ordinary
Italians and opposition politicians that the cost was worth
it. The saga is a reminder of the many problems that bedevil
Italy's business environment. End Summary.

- - - - - - - - - - - - - - - - - - -
""ITALIANITA"" SUCCEEDS, BUT WAS IT GOOD BUSINESS?
- - - - - - - - - - - - - - - - - - -

2.  (U) During the spring 2008 election campaign,
then-candidate Berlusconi weighed in on the Alitalia sale
declaring that the airline should remain ""Italian.""  Unions
immediately saw a chance to get a better deal than that being
offered by Air France-KLM, which was at that point
considering a buyout. The Air France-KLM deal collapsed in
the wake of Berlusconi's pronouncements and union opposition.
 Having scuttled the deal, PM Berlusconi was under obvious
political pressure to somehow save Alitalia.  Among
government officials, only the Minister of the Interior
publicly admitted that losing a flag carrier wouldn't have
been a tragedy, but Berlusconi remained opposed to anything
but an Italian buyer.

3. (U) To provide his Italian solution, Berlusconi used his
personal and political skill to convince a group of wealthy
Italian businessmen to commit to ""rescuing"" the airline and
preserving Italy's flagship carrier. The group of 16
investors formed Cai(Compagnia Aerea Italiana) and determined
to follow a plan of purchase designed by Intesa Sanpaolo, one
of Italy's largest banks (and also a Cai investor).

4.  (U) To make Cai into a profitable company, they'll have
help from recent tailor-made changes to Italian bankruptcy
law that will allow the company to be split into two, with
the liabilities and debts of 1 billion Euros remaining in the
""bad company,"" which will be the responsibility of the GOI.
Cai will keep the profitable portions and will also be
allowed to hold a defacto monopoly on the profitable
Rome-Milan route, as well as other intra-Italy routes.
Alitalia previously competed with Air One on these routes,
but Air One will be folded into Alitalia as part of Cai's
purchase deal.  Competition for Cai could come in the form of
the new high-speed train running between Rome and Milan, set
to start in 2009. It could also come from foreign carriers
operating under the Open Skies agreement.

- - - - - - - - - - - - - - - - - - - - - - - - -
THE INVESTORS OF CAI - CAPITALISTS OR CRONIES?
- - - - - - - - - - - - - - - - - - - - - - - - -

5. (SBU) Cai is made up of 16 Italian investors, among them
top names of Italian business such as Gilberto Benetton, of
the fashion company; Roberto Colaninno, chairman and CEO of
scooter maker Piaggio; and Emilio Riva, whose business is
steel.  The Benetton family is investing in Alitalia through
the toll-road company Atlantia, which its investment firm
controls. The Benettons also hold a controlling interest in
the company that runs Rome's airports.  Another Cai investor
already has business interests at Milan's two airports.
Roberto Colaninno and Rocco Sabelli, two key players at Cai,
come from Piaggio.  Colaninno leads the investor group and
will be Chairman of Cai. Sabelli, his right-hand man, will be
CEO. They are known for a successful turnaround of the
scooter company. Other investors are in businesses ranging
from cruise ships to steel to telecommunications, opening the
possibility for preferential treatment of their companies
from the GOI in return for the Alitalia bailout. Not all of
the investors are personally or politically close to
Berlusconi, but all will likely consider the PM to owe them
favors.  The exact nature of these favors has been, and
likely will continue to be, a subject of lively media
interest.

- - - - - - - - - - - - - - - - - - -
AN INTERNATIONAL PARTNER STILL NEEDED
- - - - - - - - - - - - - - - - - - -

6. (U) The plan to save Alitalia has always envisioned the
participation of an international partner, but that partner
will be a minority stakeholder.  Both Air France-KLM and
Lufthansa are meeting with union officials and speaking with
Cai representatives as they explore the possibility of
purchasing a 10-20% stake.

7. (U) Though the Berlusconi government's primary concern in
negotiations over sale of the airline was that it remain
Italian, the government has now said that the choice of a
minority partner is up to Cai and that it will be a
market-based choice.  Newspapers speculate that a Lufthansa
partnership would favor using Milan as a hub, while Air
France-KLM would favor Rome.  The Lega Nord political party,
Berlusconi's coalition partner, has publicly announced it
favors Lufthansa.

ADDITIONAL STUMBLING BLOCKS

8.  (SBU) Newspaper reports have pointed to obstacles that
could cause Cai to stumble.

The EU will still examine the
deal to ensure a true ""discontinuity"" between the new company
and the old and to confirm transparency in the handover. Cai
also still needs to obtain a license, since the current
license is held by Alitalia.  Marino Barzaghi, administrative
counselor to the president of Italy's civil air authority, in
a phone call with embassy staff dismissed these concerns as
journalistic speculation. He says all issues concerning the
EU are procedural and should not pose any problems.  He said
he does not forsee any disruption of the airline's service
while the changeover occurs.  Ryan Air however has moved to
block the deal. Newspapers reported Oct. 2 that the Irish
budget airline has filed a complaint with the EU, saying that
by allowing debts to remain the responsibility of the
government, the GOI is illegally protecting a failing
company.  Ryan Air representatives have said they'll take the
issue to court if the EU Commission allows the sale.

- - - -
COMMENT
- - - -

9. (C/NOFORN) The Alitalia saga is a sad reminder of how
things work in Italy and of PM Berlusconi's rather weak
adherence to some of the core principles of free-market
capitalism.  Berlusconi had the chance to let this be handled
as a business matter, but he chose to politicize it. Under
the guise of a rather quaint (and distinctly un-EU) desire to
maintain the Italian-ness of the compay, a group of wealthy
Berlusconi cronies was enticed into taking over the healthy
portions of Alitalia, leaving its debts to the Italian
taxpayers. The rules of bankruptcy were changed in the middle
of the game to meet the government's needs. Berlusconi pulled
this one off, but his involvement probably cost the Italian
taxpayers a lot of money. The way in which this deal was done
-- cronies, political interference, preference for Italian
buyers, custom-made laws -- provided the world with a clear
reminder of Italy's investment climate shortcomings. End
Comment.
SPOGLI