Diplomatic relations Between Italy and Panama continue to be bedeviled  by the Finmeccanica contract, which in Panama is still the subject of allegations of massive pay-offs to high ranking government officials.

In February, Italian Prime Minister Matteo Renzi said he would work with President Juan Carlos Varela to solve the case. But since then, there has-been very little movement diplomatically, and Panama has sought in court to void the deal with the company, which is partially owned by the Italian government.

Italian Undersecretary of Foreign Affairs Mario Giro recently said the matter is not the responsibility of the government, but of the contractor.

The contract was signed directly With Finmeccanica without a public tender. It was part of a memorandum of understanding signed by former President Ricardo Martinelli and former Italian Prime Minister Silvio Berlusconi.

Former Minister of Security Jose Raul Mulino has repeatedly said that he was ordered to negotiate with the Italian conglomerate. The contract has-been marred by allegations of corruption and poor performance.

Giro Said that he has been in constant contact with Panama Ambassador to Italy Fernando Berguido and Finmeccanica, and has Followed the criminal cases surrounding the Contracts in Italy. But that is the extent of the government's Involvement.

"At this time we cannot do anything more than encourage dialogue," said Giro.