HomeEuropePutin serenades Italy Inc. amid Ukraine crisis

Putin serenades Italy Inc. amid Ukraine crisis

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Russian President Vladimir Putin is holding a video call with the big beasts of Italian business on Wednesday, but strong corporate ties between Russia and Italy don’t mean that Rome will oppose sanctions against Moscow as it did after the invasion of Crimea in 2014.

The lucrative commercial ties between Italy and Russia were a decisive factor in the Ukraine crisis of 2014-2015, when Rome was at the forefront of diplomatic efforts to prevent tough EU sanctions on Russia. Federica Mogherini acted as the dove-in-chief on Russia both as Italian foreign minister and later as EU foreign policy chief. Diplomats from Poland, Britain, Sweden and the Baltic nations fulminated against a “Club Med” of Italian-led southern European countries that opposed a hard line on Putin.

Given that history of Italian opposition to sanctions, it’s logical that Putin sees an advantage to devoting time to Italian executives amid the most serious military stand-off in Europe in years, with some 100,000 Russian troops massed on the Ukrainian border.

The online video call at 11 a.m. will feature 25 leading industrial groups including tire-making giant Pirelli and energy powerhouse Enel. The event was planned before the escalation in Ukraine, organizers and participants stressed, but geopolitical tensions and possible economic sanctions against Russia are sure to feature prominently given Italy’s exposure to Russia.

The difference with 2014 — and the challenge for Putin — is that Italian Prime Minister Mario Draghi is a different proposition from Matteo Renzi, who led Italy in the aftermath of the Russian invasion of Crimea. Even though Draghi was unusually outspoken last month in playing down the risks of a Russian invasion of Ukraine, he still prioritizes the alliance with Washington and Rome’s place in NATO over good relations with the Kremlin.

Putin knows that Italy’s investments in Russia are critical. Pirelli has two factories in Russia, while energy giant Eni has also invested heavily in Russia, maintaining close ties to Russian gas giant Gazprom, which is its partner in the Blue Stream gas pipeline linking Russia to Turkey. Italy’s biggest banks, Intesa Sanpaolo and UniCredit, also have a deep presence. A Brussels-based lobbyist noted: “Our companies are very exposed.”

Even from the days of the Cold War, Italy has had unusually tight links with Russia. In the 1960s Fiat produced cars in the Russian town of Tolyatti, named after Italian communist leader Palmiro Togliatti. Eni has also been operating there since the 1960s, while a Pirelli factory received the Soviet Union’s Order of Lenin award in the same decade. “Among European countries, Italy is probably the closest to Russia for economic and cultural ties,” noted Aldo Ferrari, a Russia expert at think tank ISPI and professor at Ca’ Foscari University in Venice.

Russophilia reached its acme under the leadership of Silvio Berlusconi — a close friend of Putin — and continued more recently with anti-establishment parties: the League and, to a lesser extent, the 5Star Movement.

Ferrari did not think, however, that this carried the same diplomatic weight in 2022.

“The Italian card doesn’t exist [for Putin],” he said. “Italy is not Germany and it doesn’t have the willingness or the power to modify the general direction” of Europe’s diplomatic action on Russia.

Ferrari stressed that Draghi’s transatlantic allegiances mattered more than Putin, noting it was no coincidence that Draghi’s very first speech as prime minister insisted on Italy belonging to the Atlantic alliance.

Although Draghi has called for a policy of engagement with Russia, he has given no signal that he will break from the consensus over a coordinated international response against Putin in the event of an invasion of Ukraine. An Italian government statement on Monday after a videoconference that included U.S. President Joe Biden stressed “the serious consequences that a further deterioration of the situation could entail.”

Last year, Italian Foreign Minister Luigi Di Maio also spoke out in favor of sanctions on Russia over the arrest of opposition leader Alexei Navalny.

The companies involved in the meeting with Putin played down the political dimension of the online chat. “I understand that it’s kind of a difficult moment, but there is nothing political about it,” said someone from a company that will participate, noting that “Italy is not the only country that does it.”

Wednesday’s meeting will be attended by members of the Italian-Russian chamber of commerce and members of the Italian-Russian business committee, a group chaired by Pirelli’s Chief Executive Marco Tronchetti Provera.



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