Filippo Malinverno's Blog

The European Sanctions, Italy and the Russian Federation: How Rome Can Help Moscow inside the EU

May 6, 2016

With an unequivocal and peremptory resolution, the European Parliament condemned, in early February 2016, the alleged violations of human rights perpetrated against the Tatars in Crimea after the reconciliation of the peninsula with Moscow. The last initiative made by the European establishment against the Russian Federation reaffirmed, once again, the deteriorated status of bilateral relations between the Kremlin and Brussels, aggravated by the long lasting adoption of sanctions and counter-sanctions. The European message is clear: the dialogue with Russia, for now frozen, will only be reopened in case of return of Crimea to Ukraine, an option that currently seems extremely far from reality.


If the EU’s position towards Moscow remains, for the moment adamant, inside the Union there are countries which do not approve this attitude of unconditional adversity. Italy is, in this regard, at the forefront of what is becoming a real battle: soften and, if possible, abolish the regime of sanctions against Russia to restore a dialogue for too long unproductive. The numerous sharp words used by Matteo Renzi against Brussels in the last period are the first evidence of a new attitude adopted by Rome towards their European cousins. On the domestic front, shouting against Europe and making claims is certainly useful, for the government, to divert attention from the recent disastrous banking scandals and to allow the Prime Minister to regain popular trust. However, since is impossible to make too many requests at the same time, the leading cabinet will need to set priorities in order to obtain concrete results abroad: the government will have to decide, in short, whether to prioritise the immigration issue or the deficit and banking rules. Although this is not a radical opposition to decisions made by the EU, of which Italy is still a founding member and, therefore, will always be prone to support the common front, Italy does not want to accept a priori the anti-Russian political intransigence supported mostly by members of Eastern Europe, Poland and Baltic countries in particular.


Another delicate point is, to Rome, that sort of double game made by Germany in the energetic field. Once cancelled the South Stream project, the Germans have promoted the creation of a Nord Stream 2.0 that, in fact, goes against the principles of anti-Russian sanctions and causes difficulties instead of helping Kiev, not relying on Ukrainian transit gas routes. Even if the debate seems to have decreased, the building of South Stream pipeline would have represented a very important occasion for Italian energy industrial development.


Clearly, Russia is not the only cause of Renzi’s hardness towards the EU: the reasons for beating his fists on the table are several, going from immigration to flexibility on the deficit. However, in concrete terms, since the Kremlin is the first non-European recipient of Brussels’s political initiatives, it is automatically also the object of some of the Italian demands. Furthermore, Russia is, for Italy, a relevant commercial and political partner and the dialogue between Moscow and Rome has probably remained the most fruitful among the Kremlin’s various bilateral relations with European states. The Italian geopolitical and economic interests themselves highlight the importance of this dialogue. Historically speaking, Rome is a fundamental presence especially in the Mediterranean chessboard and in the geographical area including the Middle East and North Africa, often indicated with the English acronym "MENA". Without going to recall the anachronisms of the imperial "Mare Nostrum" doctrine and the commercial influence of Renaissance Maritime Republics, both Italian monarchy and Republic has always looked with great interest to the Mediterranean Sea and its coasts, trying to become a bridge between East and West, between North and South. Firstly waltzes dancer between the Allies and the Central Powers in the 19th century, then a mediator between the Soviet and capitalist worlds, in addition to decisive weight between Anglo-French coalition and Nazi Germany, Italy has made this region its main trunk of economic and political interests, following its natural vocation of peninsula. A sort of European outstretched hand, at the same time, to Africa and to the Middle East.


In a Mediterranean flood by migratory flows, Russia has to be considered an essential partner for the EU and for Italy, especially in Syria, where Russian raids support the offensive of Bashar al-Assad against rebels and against ISIS. A diplomatic resolution of the crisis will pass inevitably through a dialogue with the Russians and the Iranians, as well as the implementation of the ceasefire decided by the great powers in Munich. Rome, facing the clear indecisiveness of its greatest allies, should become first promoter of this dialogue, playing as a mediator between the parties and struggling for a regional stability that is, for Italy, crucial. The same is valid for Libya, where the military intervention of the United Nations will take place only with the unanimous consent of all those entitled to veto. Tripoli, even more than Damascus, is, by geographic proximity, the problem number one for Italy, especially concerning energetic matters: in 2014, according to data of the Italian Ministry of Economic Development, Libya accounted for about 8% of Italy’s oil supplies and about 12% of those of natural gas. Not so much, if we consider that, in 2008, the percentage of oil imported from there touched 30% of the total. However, the stabilization of the Northern African country is a top priority for Rome aiming both to fight the proliferation of illegal trafficking from Africa and to maintain a balanced diversification of energy supplies. The Syrian and Libyan scenarios are also essential to stabilize in order to resolve the crisis of migrants, which affects Italy closely: one more reason to cooperate with Russia and try to settle the rivalry between Moscow and the West. After all, the latest moves by Turkey and Saudi Arabia have raised fears of a further escalation of violence that, if it will occur, would be very hard to control.


Less important from a strategic point of view, but equally important from the political one, are the developments of the Ukrainian crisis and the Crimean issue, which are actually the major obstacles to the normalization of Russian-Western relations. The civil war in Ukraine and the reunification of the peninsula have led many observers to talk about "New Cold War", referring to the old ghosts of the past. If the absence of some characteristic elements of the old Cold War, above all the ideological struggle and the existence of a bipolar world, leave doubts about the existence of this new cold conflict, on the other hand, the deteriorated bilateral relations between Moscow and Washington allow us to look at the current situation as a pseudo-conflicting asset. However, the urgent need of stabilization and pacification in Middle East and Eastern Ukraine (without mentioning the countless other war scenarios), require the necessity to not isolate Russia internationally and, indeed, seek its collaboration within a multipolar scenario that cannot be settled without the cooperation of all the actors. During 2015, Italy has been very active in this regard, demonstrating to Russia to be a reliable partner and a valuable resource for mediation with the Western front. Matteo Renzi was the first European Prime Minister to visit Putin in March 2015, suggesting that Italy does not consider Moscow as a threat to Europe, but rather an indispensable partner to achieve the peace in the Mediterranean. Even if, after almost two years since the outbreak of Crimean crisis, the desire to exclude Russia from the negotiations seems somewhat decreased, hostility and distrust towards the Kremlin persist inside NATO and EU. Italy's task will be, in the next months, to try to take advantage of the excellent relations with both sides in order to build an effective mediation capable to implement the diplomatic efforts in the Middle East, which so far have been too little incisive.


The strong link between Italy and Russia regards also the commercial sector. As well as representing approximately 43% of Italian natural gas and 16% of oil supply[1], Russia is an important destination for the Italian export. According to data of the Russian Customs updated to November 2015, Italy has been, both in 2014 and in 2015, the fourth largest trading partner of Russia after China, Germany and the Netherlands, as well as the fifth country for exports to Russia behind China, Germany, the United States and Belarus[2]. Moreover, analysing business data, it turns out that, despite the sanctions, Italy is the country that has recorded, after China, the lowest percentage reduction in exports to Moscow between 2014 and 2015 (-35.7% compared to -31.7% for China)[3]. The most exported products concerns the agro-industrial sector, especially those that are not subject to the sanctions regime such as wine, pasta and olive oil: if the Italian wine dominates the Russian market (Italy ranks first among foreign suppliers), also pasta and oil are not far behind, being a real pride of the “Made in Italy”. Important results are recorded also in the sale of furniture, agricultural machinery (field in which Italy is a world leader together with Germany and the United States) and clothing, for which Italy is Russia’s second largest supplier after China. Of great value is also the tourism sector: according to Rosstat, Italy occupied the 8th place among the preferred destinations by Russians in 2014, well ahead of France and slightly behind Spain and Germany (recording an increase of 3% over the previous year). The recent tensions with Egypt and Turkey, which until last year were the first two destinations, are an excellent opportunity for the Italian tourist market in terms of arrivals and visits. A lot will depend on the exchange rate between the rouble and the euro: because of rouble’s depreciation, Italy remains a popular destination, but still very expensive. Financial fluctuations will lead many Russians to choose less expensive holidays and cheapest products, but the desire of “Made in Italy” will always remain a constant in Russia, a country where Italy is more than ever a symbol of quality and value added.


What then is the future of Italian-Russian relations? While we cannot give a definite answer to this question, it is still possible to consider a number of elements that will characterize - and still characterize - cooperation between Italy and Russia in the coming years. The first is, of course, the Italian membership in the European Union and NATO, institutions that heavily affect this bilateral relationship. Although Rome can criticize EU policies toward Moscow and does not support the entry of Ukraine into the Atlantic Alliance, its actions will be always in line with the joint decisions taken in Brussels, to which Italy is inevitably tied. The opposition to possible, new anti-Russian policies will not go beyond the verbal pressure towards the European institutions, perhaps stimulated by internal push. The economic damages caused by sanctions to the Italian agro-industrial economy could in fact lead some industrial lobbies to put pressure on the government in order to persuade the EU to ease the measures: on the Russian side, this could be a good opportunity to try to influence the Italian attitude at European level. The commercial sphere will be for sure the main cooperation area between Italy and Russia, being the interchange potentially fruitful for both. Moscow is an indispensable energy partner for Rome, while the development Russian agriculture – and not only that - will, in the coming years, be very dependent from the import of technologies that Italy can provide in large quantities and high quality.


Finally, not to be underestimated is also the cultural sphere. In order to debunk some myths related Soviet legacy - still present in the Italian imaginary - Russia should invest more efforts in cultural cooperation programs, taking advantage of the opinion of Italian citizens on the former USSR, certainly more positive and friendly to that of other European nations. Increasing tourism, student exchanges and bilateral cultural projects would allow Italians to learn more about a country that is too often described with stereotypes of the past, improving the image of the Kremlin throughout the peninsula and making the Italian government more aware of Russia's international exigencies and needs.


Having good relationships with Italy will not certainly help Russia to avoid disputes and tensions with the European Union, but Rome is clearly the less hostile country towards Moscow inside the European panorama. The military intervention in Syria allowed Russia to regain its status of influencing actor in the international scenario and posed the basis for a further cooperation at least with the United States – as demonstrated by the numerous visits in Moscow of Secretary of State John Kerry. Relations with the EU are instead more difficult and nobody expects the end of sanctions soon. It is very likely that, in June, the European Union will vote again a prolongation of these measures for other six months. More than other, is the current situation in Ukraine that risks to create a vicious cycle in Russia-EU relationship. The implementation of Minsk 2 agreements, sponsored by French and Germany, seems very far from being realized, especially due to the reluctance of both Ukrainian government and Donbas authorities, and the conflict appears completely frozen. Paradoxically, the destiny of European sanctions against the Russian Federation highly depends on the behaviour of Ukrainians: if the agreements will be respected, European countries will have a good reason to interrupt the sanctions regime. Due to its undisputable membership in the EU, the role of Italy against sanctions is very linked to the success or failure of Minsk agreements: as long as there will be an evident lack of implementation, the Italian government cannot create a real anti-sanctions coalition inside the Union. In order to help Russia, Italy needs to bring to Brussels the proofs of a concrete improvement in the Ukrainian scenario. However, this can be decided only by Ukrainian actors: it is time for the EU, the USA and Russia to increase their pressure on Kiev and Donbas and work in order to transform the ceasefire into a real peace.


Given the fact that the current conflicting situation is useless for every state involved, a positive restoration of Russian-European dialogue is urgent today more than ever. The Italian benevolent attitude toward Russia could really be the key point or, at least, the starting point to rebuild this dialogue, being Rome the right actor to play as a mediator. A role that the Italian geopolitical and historical legacy itself has conferred to this country from the very first moment.

[1] Italian Ministry of Economic Development, 2015.
[2] Russian Customs, 2015.
[3] Ibid.
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