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Economic Cooperation between Italy and the Russian Federation: History,
Success Stories and Challenges
Chapter · December 2019
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Economic Cooperation between Italy and
the Russian Federation
History, Success Stories and Challenges
Marco Siddi
Senior Research Fellow
Finnish Institute of International Affairs
Marco.Siddi@fiia.fi
1
Table of Contents
Introduction ................................................................................................................................ 3
Russian-Italian economic and industrial relations: historical milestones ........................................ 7
Italy-Russia trade and industrial cooperation: recent and current trends .................................... 14
The digital economy and prospects for cooperation in the digital era............................................. 18
Case studies of Russian-Italian industrial relations ...................................................................... 23
The energy sector.............................................................................................................................. 23
The transport sector: from cars to aeronautics ................................................................................ 29
The financial sector: the case of Banca Intesa .................................................................................. 36
Machinery and appliances: cooperation across sectors .................................................................. 39
The traditional ‘Made in Italy’: food, fashion and furniture ............................................................. 40
Conclusions and recommendations ............................................................................................ 43
Further reading .......................................................................................................................... 48
List of tables and figures
Table 1. Russia’s imports by country of origin, 2017 .............................................................................. 6
Figure 1. Russia’s exports by country of destination, 2017 (% of total exports) .................................... 6
Figure 2. Map showing the Brotherhood and TAG pipelines................................................................ 13
Table 2. Trade between Italy and Russia, 2011-2018 (billion Euros) ................................................... 15
Figure 3. Trade between Italy and Russia, 2011-2018 (billion Euros) .................................................. 15
Figure 4. The Blue Stream pipeline ..................................................................................................... 24
Figure 5. Italian gas imports by country of origin (million tons of oil equivalent) ............................... 26
Table 3. Strengths, weaknesses, opportunities and risks of industrial cooperation with Russia ........ 47
2
Introduction
Italy has developed a close relationship with Russia for most of its history, despite periods of
crisis and even open conflict during the Second World War. Current relations, which are
particularly significant in the economic arena, rest on a long history of cultural and diplomatic
exchanges. Italian architects played an important role in designing the Moscow Kremlin in the
15th and 16th centuries and many of Saint Petersburg’s new buildings in the 18 th century. On
the other hand, Russia’s diplomatic presence on Italian territory precedes even the
foundation of Italian state; the first Russian consulate was opened in the Republic of Venice
in 1711.1 During the twentieth century, Italy was an ally of the Tsarist Empire in the First World
War. However, it was also one of the first Western European states to recognise the Union of
Soviet Socialist Republics (USSR) in 1924, despite the deep ideological cleavage between
Italy’s contemporary Fascist regime and the new Soviet state. After the Second World War,
Italy was one of the founders of the North Atlantic Treaty Organisation (NATO) and the
European Economic Community (EEC), thereby clearly aligning with the capitalist, Western
bloc. Nevertheless, it was during the Cold War that the foundations for Italy’s economic
partnership with Russia were laid. As part of its external economic and energy policy, Italy
sought to establish closer links with the Soviet bloc, progressively expanding these links since
the 1960s.
The state-owned oil and gas company Ente Nazionale Idrocarburi (ENI) was one of the main
pioneers of Italy’s quest for economic partnership with the Soviet Union. It signed its first
contract for the purchase of Soviet oil in the late 1950s; this was followed by a large gas supply
agreement in the late 1960s. ENI’s entry in the Soviet market was accompanied by that of the
largest Italian carmaker, FIAT. In the early 1960s, FIAT had been trying to acquire a role in the
markets of the Council for Mutual Economic Assistance (CMEA); it achieved an important
milestone in 1966, when it signed an agreement to build a car factor (the Volga Automobile
Factory, or VAZ) in Tolyatti, Samara Oblast. Other renowned Italian companies became active
in the USSR around the same period: for instance, Olivetti (producing calculators and
typewriters), Pirelli (specialised in rubber and derivative processes) and Snia (active in the
1
Giovanna De Maio and Nicolò Sartori, ‘Le Relazioni tra Italia e Russia’, Osservatorio di Politica Internazionale,
Approfondimento 144, November 2018, p. 5. https://www.iai.it/sites/default/files/pi_a_0144.pdf.
3
textile and chemical sectors). The involvement of several large Italian companies in the Soviet
Union was part of a mixed economic and political strategy. The economic component
stemmed from the desire to acquire a foothold and seek profits in the Soviet market before
Western competitors did the same. The Italian state provided both political and economic
support (i.e. through the facilitation of loans) because it saw the deals as economically
beneficial and as opportunities for Italy to gain a role in the policy of East-West détente.
After the collapse of the Soviet Union, Italy attempted to preserve and further develop its
economic links with the post-Soviet space, and with the Russian Federation in particular. In
1994, Italy and Russia signed a treaty on friendship and cooperation.2 Moreover, Russia and
the European Union – where Italy has remained one of the crucial economic and political
actors – signed a Partnership and Cooperation Agreement (PCA), which focused inter alia on
facilitating economic cooperation; it entered into force in 1997.3 In 2003, the EU and Russia
reinforced their cooperation by agreeing on four ‘common spaces’, which covered: economic
issues and the environment; issues of freedom, security and justice; external security; and
research and education.4 In the 2000s, as the rise in the oil price boosted Russia’s economic
growth, Italian companies increased their presence in the Russian market, while Russian
energy exports and tourist flows to Italy boomed. The expansion of commercial interaction in
the 2000s built on long-standing cooperation, most notably in the energy sector, but it also
developed in other fields – such as food, textiles and manufactured products typical of the
Made in Italy brand.
Italian-Russian trade grew almost uninterruptedly until 2014. This was due primarily to the
complementarity of the Italian and the Russian economies and the reciprocal willingness to
deepen economic ties. While Italy exports mostly manufactured goods and lacks domestic
energy sources, Russia is one of the world’s largest energy exporters and an importer of
manufactured products. The positive political climate between Moscow and Rome
2
Trattato dl amicizia e cooperazione tra la Repubblica Italiana e la Federazione Russa, Rivista di Studi Politici
Internazionali, Vol. 63, No. 4 (252) (October-December 1996), pp. 563-570.
https://www.jstor.org/stable/42737731
3
AGREEMENT ON PARTNERSHIP AND COOPERATION establishing a partnership between the European
Communities and their Member States, of one part, and the Russian Federation, of the other part, Official
Journal of the European Communities, L 327/3, 28 November 1997. https://eur-lex.europa.eu/legalcontent/EN/TXT/HTML/?uri=CELEX:21997A1128(01)&from=EN
4
‘EU-Russia: the four Common Spaces’, europa.eu/rapid/press-release_MEMO-05-103_en.htm.
4
contributed to the intensification of bilateral trade. Former Prime Minister Silvio Berlusconi
(in office in 1994-5, 2001-2006 and 2008-2011) was a strong advocate of deeper ties with
Russia, as well as a personal friend of Russian President Vladimir Putin. While taking a less
personalised approach to the bilateral relationship, the other Italian leaders of the 2000s and
2010s largely maintained the same stance vis-à-vis Moscow, promoting both economic
cooperation and political dialogue.5 At this time, Italian-Russian relations were facilitated by
the positive climate in the broader EU-Russia relationship. In 2010, the EU and Russia
concluded a Partnership for Modernisation, which focused primarily on economic
partnership.6 Moreover, in 2012 Russia joined the World Trade Organisation.
The economic and political climate for Italian-Russian relations became more difficult after
Russia’s annexation of Crimea and its support of separatism in Eastern Ukraine in 2014. As a
way to counter Russia’s political and military stance, the European Union imposed sanctions
on Moscow, most significantly measures targeting the banking system and important sectors
of the Russian economy. Russia reciprocated with counter-sanctions that target primarily the
EU’s agricultural and food exports. Simultaneously, and even more important for its economic
impact, the drastic decline in the oil price in 2014-2016 had a negative impact on the Russian
economy, resulting in a substantial decrease in trade with both Italy and the EU. Nevertheless,
Russia now appears to have stabilised its economy and, thanks mainly to a rebound in the oil
price, its external trade began to grow again in 2017. Despite the ongoing political crisis and
the sanctions, Italy is still Russia’s sixth largest trade partner and an important partner in the
strategic field of energy. It is also the second largest importer of Russian gas in the European
Union after Germany. While the way of conducting economic relations with Russia has partly
changed after the Ukraine crisis, many Italian business actors continue to see the country as
a promising and lucrative market. On the other hand, Russia continues to perceive Italy as
one of its main trade partners and interlocutors in the European Union.
The next sections explore the foundations of Russian-Italian economic cooperation, beginning
in the Cold War period. The analysis then focuses on recent years, with an overview of
bilateral trade, the challenges posed by the current political crisis and the opportunities
5
Marco Siddi, “Italy’s ‘Middle Power’ Approach to Russia”, The International Spectator, 15 October 2018, pp. 12, 4. https://www.tandfonline.com/doi/full/10.1080/03932729.2018.1519765.
6
Partnership for Modernisation, EU-Russia Summit, 31 May-1 June 2010, europa.eu/rapid/press-release_PRES10-154_en.pdf.
5
offered by the digital economy, where Italian-Russian cooperation is currently
underdeveloped. Subsequently, the most economically significant sectoral case studies of
Italy-Russia cooperation are investigated, including energy, cars and aeronautics, machinery
production and the traditional ‘Made in Italy’ (food, fashion and furniture). Finally,
conclusions and recommendations are provided.
Table 1. Russia’s imports by country of origin, 2017
Country
Value (billion USD)
Share in total imports (%)
China
48.3
21.2
Germany
22.7
10
United States
12.5
5.5
Belarus
10.6
4.7
Italy
9.8
4.3
France
9.1
4
Japan
7.7
3.4
Rep. of Korea
6.9
3
Ukraine
4.9
2.2
Poland
4.6
2
Source: International Trade Centre, UN COMTRADE statistics
Figure 1. Russia’s exports by country of destination, 2017 (% of total exports)
Source: Observatory of Economic Complexity, MIT Media Lab
6
Russian-Italian economic and industrial relations: historical milestones
Industrial cooperation between Rome and Moscow became significant in the 1960s.7 This
cooperation was the result of a joint plan of several Italian companies, including majors such
as FIAT and ENI, to strengthen trade relations with the Soviet Union. The plan was rooted in
a particular vision of the role of big business in Italy’s modernisation and external relations.
Contemporary personalities leading large Italian companies, such as FIAT’s chairman Vittorio
Valletta and ENI’s chairman Enrico Mattei, believed that entrepreneurs should have a political
role, particularly when such role was functional to the economic interests of their companies.
Intensifying ties with the Soviet Union made economic sense for the Italian energy and car
industry in the 1960s and 1970s. For instance, FIAT aimed at replicating the success that it
had just achieved in the mass motorisation of the Italian market by applying it to the Soviet
market. The search for new, large and under-motorised markets such as the Soviet one also
addressed concerns about future sales, as those in the Italian market began to slow down.
Moreover, the intensification of economic relations with the USSR allowed Italian
entrepreneurs such as Mattei and Valletta to fulfil their aspiration for a role in shaping Italy’s
international relations, most particularly in the quest for peace and cooperation across blocs
in the Cold War. The FIAT management compared its actions to a parallel diplomacy that could
provide opportunities of cooperation which traditional diplomacy could not. Italian
governments largely endorsed this strategy, which coincided with their own attempts to
strengthen dialogue and cooperation with the Eastern bloc (and Third World countries) while
preserving Italy’s Euro-Atlantic alignment. Mattei and Valletta became personally involved in
negotiations that allowed their companies to make deals with the Soviet Union, and deserve
much credit for their positive outcome.
Furthermore, Italian entrepreneurs active in the Soviet Union also played an important role
in facilitating the negotiations. Most notably, Piero Savoretti, head of Novasider (a company
focusing on the machine tool sector), became the representative of leading Italian firms in
the Soviet Union. Savoretti had contacts in the top Soviet bureaucracy and organized
7
For a detailed discussion, see V. Fava, ‘Between Business Interests and Ideological Marketing: The USSR and
the Cold War in Fiat Corporate Strategy, 1957–1972’, Journal of Cold War Studies 20(4), Fall 2018, pp. 26–64,
doi:10.1162/jcws_a_00822.
7
numerous visits by Italian industrial delegations to the USSR from the mid-1950s to the 1970s.
In 1958, the Soviet government chose Novasider as an agent of the Soviet foreign trade
company Stankoimport to sell Soviet machinery in the Italian market. Shortly afterwards,
Savoretti moved on to negotiate the supply of entire plants in the chemical, textile and
construction sectors from Italy to the USSR. In this context, Savoretti also began to act as
FIAT’s agent in the USSR, a function that he maintained from the 1960s to the early 1980s.8
Accompanying the growing business contacts, an Italian-Soviet multiyear bilateral agreement
was negotiated in the late 1950s and ratified in 1962. In 1961, ENI signed the first important
contract with a Soviet company, Techmashimport, for the supply of equipment for a plant
producing methane and ammonia. ENI also signed another agreement with Soyuzneftexport
for the purchase of 800 metric tons of oil. ENI’s deals paved the way for further initiatives by
other Italian companies such as Pirelli, SNIA, Olivetti and – also in the energy sector –
Snamprogetti, Ansaldo and Innocenti. The success of Italian companies in the USSR in the
1960s largely owed to the fact that they managed to coordinate in negotiations with the
Soviet government, which led to the de facto linking of several deals even in sectors that were
unrelated to each other. This reflected the belief – held by several key Italian entrepreneurs
active in the Soviet market – that large and small Italian companies should present themselves
as an ‘alliance of Italian business’ that could meet the demands of the Soviet market. Hence,
various companies with no ownership ties and often operating in different sectors acted as a
business group, with the support of banks and the Italian government, jointly negotiating with
the Soviet leadership to reduce transaction costs and gain a competitive advantage. This
approach was essential for their success. By the late 1960s, some large-scale deals were
concluded, which elevated Italy to the role of a top Western actor in economic relations with
the Soviet Union.
One of the most significant and symbolic deals in terms of investment and timing was made
in the car sector. In 1966, the Italian carmaker FIAT signed an agreement with the Soviet
government to build a factory at Tolyatti, in the Samara region, which would produce an
adapted model of the FIAT 124 car. As this was the earliest successful attempt of a Western
car manufacturer to acquire a prominent role in the Soviet market, it deserves specific
8
Fava 2018, pp. 36-37, 47-48.
8
attention. The plant, named Volga Automobile Factory (VAZ) started production in 1970. It
was a highly automated facility, able to produce 660,000 cars per annum. In the previous two
decades, FIAT had played the decisive role in Italy’s mass motorisation by specialising in smallcar production and achieving an almost total monopoly in the Italian car market. The
economic logic driving the deal with the Soviet Union was the company’s intention to
replicate its success in the under-motorised markets of the USSR and the Eastern bloc. In the
early 1960s, the car industry was undergoing substantial changes; FIAT’s position was
threatened by both the more aggressive stance of US carmakers in Europe and intra-European
competition. FIAT saw a threat in the growing presence of large US companies such as General
Motors and Ford in Western Europe, and attempted to assert its position in the Soviet market
before American companies were allowed to enter it. FIAT’s vertically integrated structure
(where the central management controlled the entire productive system) and mass
production strategy was particularly attractive to the Soviet leadership, which sought
partners able to provide licences, equipment and technical assistance for a turnkey plant in a
greenfield location. Hence, both FIAT’s managerial structure and economic goals, as well as
the fact that they matched Soviet interests, are key factors to explain the company’s success
in achieving and implementing the deal.9
The FIAT-USSR agreement was possible thanks to the financing of Italian bank IMI (Istituto
Mobiliare Italiano) and the strong commitment of FIAT chairman Vittorio Valletta. The
construction of the VAZ factory was important for FIAT’s relaunch as a global player in the
automotive industry, but it also became the instrument of an ideological campaign.
Contemporary actors presented it primarily as a peacebuilding opportunity with the USSR,
rather than as a chance to make profits.10 The idea that private entrepreneurs could act as
‘bridge builders’ and alleviate tensions between East and West was gaining ground, and has
since become an important aspect of European policy towards Russia (particularly in
European states with a larger industrial base, such as Germany, Italy and France).11
During the Cold War, this approach met with political opposition from the lobby groups that
were hostile to cooperation with the USSR – for instance, in the US government. However,
9
Fava 2018, pp. 31, 39.
Fava 2018, pp. 28-29.
11
On the German case, see Sven Jüngerkes, Diplomaten der Wirtschaft: die Geschichte des Ost-Ausschusses der
deutschen Wirtschaft, Fibre Verlag, Osnabrück 2012.
10
9
as FIAT operations in the Soviet Union concerned non-strategic goods, and Washington
trusted both the FIAT management and Italy’s political leadership, this opposition did not
prevent the VAZ deal. As the re-export of some US machinery from Italy to the USSR was
involved in the deal, FIAT could also count on the support of some US-based business actors.
The concerns of the US government about the possible negative repercussions of its
opposition to the VAZ deal for US-Italy relations also played a role.12
In fact, the main obstacles met by FIAT in the implementation of the VAZ deal were of a
technical nature, rather than political. Italian technicians overestimated the efficiency of the
contemporary Soviet five-year plan, which focused on creating a large number of new
industrial complexes and on the automation of production processes. This led to problems
and delays in the building of the VAZ factory. Disputes between the Italian and the Soviet
partners occurred regarding the choice of technology and products suitable for Soviet roads,
weather and construction conditions. The Soviets pushed for modifications of the original
FIAT 124 model. Moreover, FIAT lamented delays in the early construction phase and in the
delivery of machinery and parts that fell under Soviet responsibility, the lack of skilled workers
and organisational deficiencies. On the other hand, the wave of mass strikes that began in
industrial centres in Northern Italy in 1969 delayed FIAT deliveries from Italy, which led the
Soviet side to threaten the imposition of penalties. Despite incurring additional costs and
tasks than originally expected, FIAT was however able to implement the deal and present it
as a success, together with its Soviet partners.13
FIAT’s business in the USSR was not limited to the VAZ plant. In the early 1960s, before the
VAZ contract was signed, FIAT had signed agreements to provide the Soviet Union with marine
engines, gas turbines and technical consultancy for the organisation of storage units.
According some analyses, the VAZ deal was in fact more useful to strengthen FIAT’s machine
tool production than its automobile division. While the FIAT-Soviet partnership in car
manufacturing ended with the VAZ plant, the export of machinery produced by companies
controlled or owned by FIAT continued later. The 1970s witnessed new Soviet-Italian
12
L. Siegelbaum, Cars for Comrades: The Life of the Soviet Automobile, Ithaca (NY), Cornell University Press,
2008, Chapter 3; Fava 2018, pp. 40-7.
13
Fava 2018, pp. 60-3.
10
agreements involving machine tools manufacturer Comau and truck manufacturer IVECO,
both controlled by FIAT.14
Therefore, while FIAT’s success in the Soviet car sector was limited to the construction of the
VAZ plant, this endeavour also paved the way for more enduring success in other related
sectors, most notably FIAT’s secondary production of machinery. Moreover, thanks to the
positive political climate generated by the VAZ deal, FIAT and the Italian government could
claim to have achieved the goal of contributing to East-West détente. At the end of the 1970s,
the positive momentum that Italian industry had enjoyed in the previous decades ended, due
to both domestic crisis and the competition of German, U.S. and Japanese producers. In the
next decades, and particularly after the fall of the Soviet Union, competitors acquired a more
important role in the Russian car market. Nevertheless, Italy remained an important exporter
of machinery to Russia.
Italian-Soviet cooperation continued to be important in the energy sector. The oil import
deals between ENI and the Soviet Union of the early 1960s had been agreed under the
leadership of Enrico Mattei, the founder of ENI and a key political figure in Italy’s post-war
politics and contemporary oil business. Mattei had been actively and successfully seeking a
role for ENI in the oil sector in the Middle East and the Soviet bloc, proposing more attractive
business models to partner states and thus challenging the monopoly of US and other
Western companies.15 In 1960, Mattei signed a large oil supply contract with
Soyuznefteexport, the Soviet oil and gas import-export firm.16 The contract became the
largest one in the history of economic relations between the two countries, and helped dispel
the Western view that Moscow was not a reliable economic partner to deal with on a mutually
beneficial basis.
While Mattei died in 1962, his policy of seeking cooperation with the Soviet Union continued
to shape ENI’s business strategy. In 1969, this led to a contract for the supply of 6 billon cubic
14
Fava 2018, pp. 56-8.
For example, in negotiations on oil production in Iran, Mattei proposed to the Iranian counterparts the equal
sharing of profits generated by oil extraction; Valerio Castronovo, ‘Gianni Agnelli and Enrico Mattei’, in The
Oxford Handbook of Italian Politics, E. Jones and G. Pasquino (eds.), Oxford: Oxford University Press (2015), p.
360.
16
The Soviet Union was to supply Italy with 12 million tons of crude oil within four years, in exchange for 240
thousand tons of large-diameter pipes and equipment for oil pipelines, as well as 50 thousand tons of synthetic
rubber. See ‘40 Years Together. History of Cooperation between Gazprom and Eni’, Gazprom, 10 December
2009, http://www.gazprom.com/about/history/events/italy40/.
15
11
metres of Soviet gas to Italy per year, for the duration of 20 years. The Soviet Union also
received a substantial loan for the procurement of gas pipelines from Italian companies. A
vast pipeline network was under construction in the Soviet Union, and additional pipelines
were laid for the transportation of gas to Italy via Czechoslovakia and Austria. ENI was the
main stakeholder of the Trans Austria Gas (TAG) Pipeline, built in the 1970s and expanded in
the 1980s to carry Soviet gas across Austria to Northern Italy. This pipeline still transports
approximately 30 bcm/year, namely all Italian imports of Russian gas (which have made up
approximately 40% of Italian gas imports in recent years).17 The 1969 gas contract was
followed by further agreements: a second contract in 1975 to additionally supply 1 billion
cubic meters of natural gas per annum, and a third contract in 1986 providing for a twofold
increase in Russian gas supplies up to 8 billion cubic meters.18 In the 1970s and 1980s, ENI
also provided 19 compressor stations for the transportation of Soviet gas from the Siberian
field of Urengoy to Europe via the Brotherhood pipeline (or Urengoy–Pomary–Uzhgorod
pipeline). Hence, the 1969 agreement was another crucial milestone in the history of ItalianSoviet industrial and energy relations. It initiated a long-term partnership between ENI, the
Soviet gas industry and later Russia’s Gazprom, which still continues today.19 ENI’s deals with
the Soviet energy industry, like those of FIAT in the car sector, reinforced the company’s
autonomy and enlarged its sphere of interest. Moreover, FIAT’s and ENI’s strategy
strengthened Italy’s position in the international arena while the country was joining the circle
of industrially advanced countries.20
17
ENI owned the TAG pipeline until 2011, when it had to sell it in order to comply with EU antitrust legislation.
Currently, the new majority owner of the pipeline is the Italian company SNAM, while Austrian company Gas
Connect Austria GmbH is the only other consortium partner; https://www.taggmbh.at/en/the-company/taggmbh/.
18
‘40 Years Together. History of Cooperation between Gazprom and Eni’, Gazprom, 10 December 2009,
http://www.gazprom.com/about/history/events/italy40/.
19
‘Partnership with Gazprom and Rosneft’, ENI, https://www.eni.com/en_RU/eni-russia/partnersprojects/partners-projects.shtml.
20
Castronovo, ‘Gianni Agnelli and Enrico Mattei’, p. 364.
12
Figure 2. Map showing the Brotherhood and TAG pipelines
Source: Wikimedia Commons
13
Italy-Russia trade and industrial cooperation: recent and current
trends
Trade and industrial cooperation between Russia and Italy increased considerably in the
2000s and early 2010s, with only a short-lived contraction in 2009, after the global financial
crisis. A peak was reached in 2013, when bilateral trade reached nearly €31 billion in value
(out which €10.8 billion of Italian exports and €20.2 billion of Russian exports). As oil and gas
constituted the bulk of Russian exports, the value of trade was strongly influenced by the
variations in the oil price, rather than just by volumes of trade. Since 2014, bilateral trade has
experienced a drastic contraction for three consecutive years, until 2017 (-13,5% in 2014 and
around -19% in 2015 and 2016). This was due primarily to the drop in the oil price and its
effects on the Russian economy. European sanctions and Russian countersanctions further
contributed to the contraction.21 In 2016, the total value of Italian-Russian trade was € 17.3
billion (with Italian exports at €6.7 billion and Russian exports at € 10.6 billion). Losses were
particularly significant for Italian agricultural and food exports, which were hit by Russian
countersanctions and lost an estimated €3 billion annually in 2013-2017.22 Further losses
were caused by the climate of uncertainty created by the sanctions regime, which
discouraged firms from investing, and by the decision of the European Bank for
Reconstruction and Development (EBRD) to stop investments in Russia (previously, Russia
was the first country in terms of EBRD investments, with a peak of nearly € 3 billion invested
in 2011).23
The rebound in the oil price in 2017, European economic recovery and the ensuing higher
demand of Russian energy, as well as Russia’s economic recovery, led to an increase in the
value of trade to €20.3 billion in 2017 and €23.7 billion in 2018.24 In 2018, the value of Italian
21
On the effects of sanctions on the Russian economy, see Iikka Korhonen, Heli Simola and Laura Solanko,
‘Sanctions, counter-sanctions and Russia − Effects on economy, trade and finance’, BOFIT Policy Brief
2018 No. 4, https://helda.helsinki.fi/bof/bitstream/handle/123456789/15510/bpb0418.pdf?sequence=1.
22
Coldiretti, ‘Russia, con le sanzioni l’Italia perde 3 mld all’anno’, 3 April 2018,
https://www.coldiretti.it/economia/russia-le-sanzioni-litalia-perde-3-mld-allanno.
23
Camilla Pagani, ‘Italia-Russia, quattro anni dopo: il business resiste se si rinnova’, Istituto per gli Studi di
Politica Internazionale, 24 July 2018, https://www.ispionline.it/it/pubblicazione/italia-russia-quattro-annidopo-il-business-resiste-se-si-rinnova-21032; European Bank for Reconstruction and Development, ‘Russia’,
https://www.ebrd.com/downloads/research/factsheets/russia.pdf.
24
Info Mercati Esteri, Scambi Commerciali (Russia), 2016-2018
http://www.infomercatiesteri.it/scambi_commerciali.php?id_paesi=88.
14
exports to Russia was €7.6 billion, whereas that of Russian exports to Italy was €16.1 billion.
Italy is Russia’s sixth largest trade partner worldwide and the second largest in the EU after
Germany.
Table 2. Trade between Italy and Russia, 2011-2018 (billion Euros)
Export Italy
Export Russia
Total
2011
9.3
16.9
26.2
2012
10
18.3
28.3
2013
10.8
20.2
31.0
2014
9.5
17.3
26.8
2015
7.1
14.4
21.5
2016
6.7
10.6
17.3
2017
8.0
12.3
20.3
2018
7.6
16.1
23.7
Sources: Info Mercati Esteri and Istat
Figure 3. Trade between Italy and Russia, 2011-2018 (billion Euros)
35,0
30,0
25,0
20,0
15,0
10,0
5,0
0,0
2011
2012
2013
Export Italy
2014
2015
Export Russia
2016
2017
2018
Total trade
Sources: Info Mercati Esteri and Istat
Looking at Italian exports to Russia, machinery and appliances are still the most important
category of products: in 2018, their value was over € 2 billion. Clothes and leather products –
typical goods of the Made in Italy brand, which is strongly appreciated in the Russian market
– came second, with a combined value of nearly € 1.4 billion. Chemical products came third
15
(€ 588 million), followed by electrical and other house appliances (€ 493 million), furniture (€
363 million), food (€ 343 million) metal products (€ 336 million) and pharmaceuticals (€ 274
million). Most categories of Italian exports increased in the period 2016-2018, following the
recovery of the oil price and of the Russian economy, which made a broader segment of the
Russian market more prone to buying some brand and luxury products. This is particularly true
of Made in Italy textiles and leather products, which are appreciated by the Russian middle
class and can hardly by replaced by domestic production. It is noteworthy that Italian exports
increased even in categories that are partly sanctioned, such as food.25
Nevertheless, the value of Italian exports is still far from the pre-sanction and pre-crisis level,
and in fact, it appears to have peaked in 2017. Even if the Russian economy continues to
recover, it is doubtful that Italian exports will reach again pre-crisis levels in many categories.
This is due to the policy of import substitution that the Russian Federation has adopted
following the Western policy of sanctions. Traditional Western partners such as Italy are now
invited to invest and produce their goods in Russia, rather than export goods produced in
Italy. The goal is that of partly replacing Made in Italy products with Made in Russia with Italy
goods. Moreover, Russia sees Italy as a partner for the transfer of technologies that can
contribute to the modernisation of the Russian economy.26 In order to facilitate this new
approach, Special Economic Zones were created in various areas of the Russian Federation,
where new businesses can benefit from financial and administrative incentives. 27
Currently, only 20% of the approximately 500 Italian companies that have stable presence in
Russia have production facilities on Russian territory.28 Despite the continuation of sanctions,
the Italian diplomatic representations in Russia and the Italian Institute of Foreign Trade are
trying to facilitate Italian investments in Russia. For instance, they have compiled a database
for Italian companies with projects that the Russian government has identified as priorities,
and are located in Russia’s most business-friendly regions. Italian diplomacy and trade
25
Moreover, some of the Italian food products sanctioned by Russian countersanctions appear to have reached
the Russian market through “changes of origin” in intermediary countries that are not affected by sanctions,
such as Serbia and Belarus; cf. Silvia Semenzato, ‘Made with Italy: il futuro è produrre in Russia?’, Istituto per gli
Studi di Politica Internazionale, 7 May 2018, https://www.ispionline.it/it/pubblicazione/made-italy-il-futuro-eprodurre-russia-20437.
26
Interview with Russian Ambassador to Italy Sergey Razov, Tribuna Economica 3/2019, 25 March 2019, p. 5.
27
Giovanna De Maio and Nicolò Sartori, ‘Le Relazioni tra Italia e Russia’, Osservatorio di Politica Internazionale,
Approfondimento 144, November 2014, p. 11. https://www.iai.it/sites/default/files/pi_a_0144.pdf.
28
Semenzato, ibid.
16
agencies are also encouraging the decentralisation of investments from the largest Russian
cities to the regions. The five most attractive regions for investments in 2018 included the
Tyumen and Tula regions and the Republic of Tatarstan, besides the cities of Moscow and
Saint Petersburg.29
While we are still far from seeing the production of typical Italian brand and luxury goods in
Russia, the new fiscal and legal frameworks have created new challenges and opportunities
for Italian companies that are interested in investing in Russia. Large Italian companies
producing machinery or various types of appliances may find it attractive to open new plants
in Russia, as technology in these sectors tends to be standardised and transportation costs
are relatively high (hence, it is sensible to have production plants closer to the markets of
destination). A further incentive is provided by the creation of the Eurasian Economic Union,
which has reduced trade barriers and allowed easier access to a larger number of customers
in member states (besides Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan).30 Moreover,
Russia is considered a country where doing business is relatively easy. In 2018, the World
Bank rated Russia as the 31st best country (out of 190) in its Ease of Doing Business ranking.31
On the other hand, small and medium-sized Italian companies may find it more difficult to
start production on Russian territory due to their limited resources. Moreover, it is unclear
whether typical Made in Italy products (clothes, furniture, leather products and other
accessories) will retain the same attractiveness in the Russian market if the brand is replaced
by one that indicates production in Russia.32
29
Interview with Italian ambassador to Russia Pasquale Terracciano, Tribuna Economica 3/2019, 25 March 2019,
p. 6. In the top-20, there was also the Far Eastern region of Khabarovsk in the Far East, ranked the 18th most
attractive region.
30
On the Eurasian Economic Union, see for instance Sean Roberts and Arkady Moshes, ‘The Eurasian Economic
Union: a case of reproductive integration?’, Post-Soviet Affairs, Vol. 32, No. 6, 2016; Rilka Dragneva and Kataryna
Wolczuk, ‘The Eurasian Economic Union: Deals, Rules and the Exercise of Power’, Chatham House, May 2017,
https://www.chathamhouse.org/sites/default/files/publications/research/2017-05-02-eurasian-economicunion-dragneva-wolczuk.pdf.
31
World Bank, ‘Ease of doing business index’,
https://data.worldbank.org/indicator/ic.bus.ease.xq?view=map&year_high_desc=false.
32
Semenzato, ibid.
17
The digital economy and prospects for cooperation in the digital era
As, both the European Union and Italy are focusing on the digitisation of their economies and
society, an important question is whether Italian-Russian cooperation will expand beyond the
traditional realms and extend to the digital economy. A related question is whether and how
digitisation will affect already existing cooperation. In order to provide insights and estimates
concerning these issues, it is necessary to briefly explore the ongoing implementation of the
digital agenda in Italy and Russia and the factors affecting potential cooperation.
Italy’s Digital Agenda is part of the European Digital Agenda, a policy initiative of the European
Union that aims at creating a single European digital market and fostering smart, sustainable
and inclusive growth. Every member state of the European Union has committed to
implementing European goals and promoting digital innovation and technological
infrastructure on its territory. The objectives of Italy’s Digital Agenda focus on growth and
employment. The Agenda is seen as an instrument for Italy to address the country’s slow
economic growth and catch up with the most advanced European partners in the field of
digitisation. Practically, the focus is on innovating information and communication
technologies, granting universal access to fast broadband internet, improving online services
and access to data, increasing interoperability across data banks and services, promoting
electronic payments, boosting internet security and Italians’ digital literacy.
In order to implement the Agenda, an agency was created in 2012 (Agenzia per l’Italia
Digitale) and a strategic document was adopted for the years 2014-2020.33 The Agenda
devotes particular attention to the Italian public administration, with a twofold objective:
simplifying public services and, most significantly, using the public sector as an instrument to
promote the digital transformation of the Italian economy more broadly. In addition, an
Industry 4.0 plan was adopted in cooperation with the General Confederation of Italian
Industry (Confindustria) in order to facilitate the digitisation of Italian companies, particularly
through tax deductions and easier access to credit for investments in innovation, technology
33
Presidenza del Consiglio dei Ministri, Strategia per la Crescita Digitale 2014-2020, 3 March 2015,
https://www.agid.gov.it/sites/default/files/repository_files/documentazione/strategia_crescita_digitale_ver_
def_21062016.pdf.
18
and research and development.34 Italy also has a National Ultra Broadband Strategy that is
currently under implementation. So far, the implementation has been carried out by Italian
companies, with Open Fiber receiving the first two tenders.
Progress in the implementation of Italy’s Digital Agenda is assessed through the Digital
Economy and Society Index (DESI), an instrument created by the European Commission. The
index focuses on various indicators that are grouped into five areas: connectivity (measuring
the development of and access to broadband), human capital (internet use and digital skills),
the use of internet services (i.e. communication and online transactions), the integration of
digital technology (business digitisation and e-commerce) and digital public services. The
aggregate assessment of these indicators shows that Italy still lags behind the EU’s average
and ranks 25th out of 28 member states. The main challenge is the low level of digital skills,
which has a negative impact on the take-up of broadband, internet users, the take-up of
online services, online sales of small and medium enterprises and eGovernment users. On the
other hand, Italy is making quick progress in its fast broadband coverage and is a pioneer in
5G mobile technology. Digital public services and the integration of digital technology are the
main drivers of digital progress in Italy.35
Russia is also devoting increasing attention to digitisation and the digital economy.36 In 2017,
the Russian government approved the Digital Economy of the Russian Federation programme
until 2024, which will be funded with over 1.8 trillion roubles (over 26 billion dollars). The
programme foresees a threefold increase in spending for the development of the digital
economy, as well as the creation of a sustainable and safe information and
telecommunications infrastructure for the high-speed transmission, processing and storage
of big data. Russian state and local government bodies should acquire primarily domestically
sourced software.37 Russia is also developing 5G networks in many of its major cities.
34
Agenda Digitale Italiana: obiettivi e ambiti di intervento, Osservatori.net, 31 August 2018,
https://blog.osservatori.net/it_it/agenda-digitale-italiana-obiettivi.
35
Digital
Economy
and
Society
Index
(DESI)
2018
Country
Report
Italy,
http://ec.europa.eu/information_society/newsroom/image/document/2018-20/it-desi_2018-countryprofile_eng_B4406C8B-C962-EEA8-CCB24C81736A4C77_52226.pdf.
36
For a comprehensive assessment of the status quo and policy challenges, see World Bank, Competing in the
Digital
Age:
Policy
Implications
for
the
Russian
Federation,
September
2018,
https://www.worldbank.org/en/country/russia/publication/competing-in-digital-age.
37
Analytical Centre for the Government of the Russian Federation, 18 October 2018,
http://ac.gov.ru/en/events/018558.html.
19
Currently, Russia’s digital economy is concentrated in Moscow (40% of the total) and other
major cities.38 The digital sector is one of the few sectors in Russia that has experienced
constant growth despite economic crises. This is also reflected in the dramatic increase of
(broadband) internet users since 2009 and of the e-commerce sector. Russia’s companies in
the digital sector include dynamic international players such as Kaspersky Lab (specialising in
cyber security) and ABBYY (focusing on optical character recognition and other software
applications). Russia’s international cooperation for the development of new digital
technologies is expected to take place primarily with China. The Belt and Road Initiative has
stimulated the development of blockchain technologies between Russia and China. Due to its
position between China and Europe, Russia is set to develop large transhipment infrastructure
over the next decade.39 Further cooperation in the digital sector will take place with member
states of the Eurasian Economic Union, with the goal of creating a Eurasian digital space.
The growing securitisation of the digital sector and technology is arguably the main constraint
for potential cooperation between Italy and countries outside the EU and NATO such as
Russia. This became clear during discussions concerning the involvement of Chinese company
Huawei in the implementation of 5G technology in Italy and other Western countries (Huawei
is a leading actor in this process in Italy). The United States were especially vocal in
highlighting the presumed security threat that stemmed from Huawei’s involvement in
national 5G networks. In early 2019, US envoys toured Europe and threatened
countermeasures against any nations allowing Chinese equipment to be used in future 5G
telecom networks.40 The Italian government has not bowed to pressure thus far, but the
growing securitisation of the digital sector casts doubts on future international cooperation.
The fact that the Italian digital agenda follows a top-down approach and is driven by and
closely monitored by the state, which is particularly sensitive to security considerations (and
pressure by Western allies), makes cooperation with Russia in this sector less likely. Recent
concerns about malicious cyber activity targeting Western public institutions and electoral
38
For an overview of the digital sector in Russia, see A. Leenders, The Digital Economy in Russia, Russian
International Affairs Council, 20 August 2018, https://russiancouncil.ru/en/blogs/leenders/the-digital-economyin-russia-part-2/.
39
Russia Briefing, 3 January 2019, https://www.russia-briefing.com/news/russia-spending-billions-nationaldigital-economic-development-programmes.html/.
40
John Follain, ‘Trump's Huawei Threats Dismissed in Italian Pivot Toward China’, Bloomberg, 19 February 2019,
https://www.bloomberg.com/news/articles/2019-02-19/trump-s-huawei-threats-dismissed-in-italian-pivottoward-china.
20
processes, some of which allegedly originated from Russia, further complicates cooperation
prospects.41 Another constraint is the fact that both Italy and Russia lag behind in the
development of the digital economy compared to large players such as the United States and
China (and even the United Kingdom, Canada, Israel or Japan), which boast the largest
companies and number of start-ups in the field.42
On the other hand, as economic cooperation between Italy and Russia already takes place in
sectors that are increasingly digitised, growing interaction is to be expected in the digital
economy too. Foreign companies active and selling in Russia have better chances of being
successful if they invest in Russian online platforms. For instance, the search engine Yandex
is the most popular in the country thanks to services devised specifically for the Russian
market. Investments and publicity on Yandex are necessary for companies that want to
appear in the first search engine result pages. Similarly, Russian social networks Vkontakte
and Odnoklassniki (both owned or majority-owned by Mail.ru) are second only to Youtube for
number of users in Russia.
Furthermore, Russia is planning the digitisation of sectors where cooperation with Italy is
well-developed, such as manufacturing and subsoil resource management. Hence, digital
cooperation between Italy and Russia could develop as part of ongoing cooperation in energy
and manufacturing. The importance of digitisation in these sectors is reflected by the relevant
discussions that are currently taking place in prominent international economic forums
hosted by Russia, most notably the Saint Petersburg International Economic Forum. 43 These
discussions also suggest that Russia is open to digital cooperation with foreign actors. Large
Russian companies that are active in numerous aspects of the digital economy have recently
launched bold international cooperation initiatives. The recent deal between Yandex and
South Korea’s Hyundai Motor Group to develop self-driving car technologies constitutes a
prime example.44
41
On security threats and Italy’s cyber security initiatives, see F. Spidalieri, ‘Italy: Building a Cyber Resilient
Society’, ISPI, 23 October 2017, https://www.ispionline.it/en/publication/italy-building-cyber-resilient-society18229.
42
Rapporto sul Digitale 2018, Centro Economia Digitale, http://www.centroeconomiadigitale.com/wpcontent/uploads/2018/11/CED-Rapporto-sul-DIGITALE-2018.pdf, pp. 76-7.
43
See for instance planned panel debates at the 2019 St. Petersburg International Economic Forum,
https://www.forumspb.com/en/programme/68921/ and https://www.forumspb.com/en/programme/68923/
44
H. Foy and Song Jung-a, ‘Hyundai and Yandex sign deal to develop self-driving car tech’, Financial Times, 20
March 2019, https://www.ft.com/content/e2ace12a-49ee-11e9-bbc9-6917dce3dc62.
21
Italian companies do not yet appear among the most attractive cooperation partners for
Russia in the digital economy. However, the picture may change in the next years. The
partnership between the Italian energy company ENI and the Skolkovo Innovation Centre,
sealed in 2013, or ENEL’s launch of an innovation hub in Skolkovo in 2017 are examples of
how consolidated Italy-Russia cooperation could acquire ramifications in the technological
and digital fields.45 The Skolkovo Innovation Centre in Moscow is the largest example of
Russia’s effort to promote the digital economy and attract foreign partners. Every year, the
Centre organises the Startup Village, an open-air conference for technology entrepreneurs
and investors. The increasing interest of Italian businesses for digital cooperation with Russia
was reflected in the participation of Italian companies and start-ups at the 2018 Startup
Village. Italy had its own pavilion and one of the largest foreign representations, with more
than 30 start-ups that were brought over by the Italian Trade Agency in Moscow. 46
45
ENI press release, 26 November 2013, https://www.eni.com/docs/en_IT/enicom/media/pressrelease/2013/11/PR_ing_Skolkovo.pdf; Enel opens a new Innovation Hub in Moscow, 27 October 2017,
https://sk.ru/news/b/press/archive/2017/10/27/enel-opens-a-new-innovation-hub-in-moscow.aspx.
46
Skolkovo News, 1 June 2018, https://sk.ru/news/b/articles/archive/2018/06/01/_1820_the-potential-inrussia-is-very-big_1920_-international-startups-out-in-force-at-startup-village.aspx.
22
Case studies of Russian-Italian industrial relations
The energy sector
The energy sector has been an area of strategic cooperation between Italian and Russian
companies for decades, and the one where pioneering Italian-Soviet industrial cooperation
began on a significant scale during the Cold War. Today, the partnership in this field is guided
primarily by Italian companies ENI and ENEL and their Russian counterparts Gazprom, Rosneft
and (to a lesser extent) Lukoil. ENI has continued to focus on hydrocarbons, gas and oil in
particular, whereas ENEL has become one of the leading players in the Russian electricity
sector. Moreover, SNAM (Società Nazionale Metanodotti) has played an important role in the
construction of pipeline systems – together with SAIPEM (a subsidiary of ENI), which has
specialised in offshore pipelines.
As described in previous sections, this success story of Italian-Russian industrial cooperation
began as a result of the complementarity of the two countries’ economies and interests. Italy
has long been an importer of energy and has had an interest in diversifying its import partners,
whereas Russia saw Italy as both an important energy customer and a provider of essential
technology. Italian companies first pursued a policy of diversification of imports, with the
political support of the government, which included larger purchases of oil and gas from
Russia. Subsequently, they also sought a role in the Russian upstream sector and domestic
energy market. Over the decades, Russia has become one of the most reliable energy
suppliers to Italy, as well as the largest gas provider.
ENI spearheaded Italy’s energy partnership with the Soviet Union. After the end of the Cold
War, both ENI and the Soviet energy sector underwent considerable restructuring. ENI started
a privatisation process, which reduced state control of the company to approximately 30% of
its shares today. The Soviet Gas Industry Ministry was transformed into a new company,
Gazprom. ENI and Gazprom expanded Cold War-time cooperation: in 1996, Russian gas
supplies to Italy were extended and supplemented by further volumes. In 2006, another longterm supply agreement was signed, providing for Russian gas supplies to Italy until 2035. ENI
became the largest single customer of Gazprom. Supplying over 28 billion cubic meters of gas
per year, Gazprom satisfies about one-third of Italy’s gas demand.
23
After ENI and Gazprom signed a multi-project agreement in 1998, their relationship shifted
from a purely technical and commercial basis to one of a business and industrial character.
The first joint ventures were established to operate in both the upstream and downstream
sectors. One of these, NeftoAgip, opened the first service station co-owned by a Western
company in Moscow.47 Most significantly, in 2000 ENI and Gazprom founded the Blue Stream
Pipeline Company (each with a 50% stake) in order to build and operate the Blue Stream
pipeline, shipping Russian gas to Turkey. The pipeline was built with the key contribution of
Saipem, ENI’s subsidiary, which laid the offshore part of the project (reaching a depth of 2,150
metres underwater in the Black Sea). It has a total length of over 1,200 kilometres and a
capacity of 16 bcm/year, allowing direct supplies of Russian gas to Turkey (the largest
importer of Gazprom gas after Germany) without transit in third countries.48
Figure 4. The Blue Stream pipeline
Source: http://www.gazprom.com/projects/blue-stream/
47
48
ENI in Russia, https://www.eni.com/en_RU/eni-russia/business-areas/business-areas.shtml.
Blue Stream, http://www.gazprom.com/projects/blue-stream/.
24
Another milestone in the relationship between Gazprom and ENI was the signing of a Strategic
Partnership Agreement in 2006. The agreement provided for the implementation of joint
projects in Russia, Italy and third parties across the value chain, from upstream to
downstream, as well as for cooperation in the technology sector. As part of the agreement,
in April 2007 ENI acquired gas production assets at an auction through the Enineftegaz
consortium (where it held a 60% stake and ENEL controlled the remaining 40%), which was
subsequently renamed Severenergia. In 2009, Gazprom acquired a majority stake in
Severnergia. In addition, also in 2007, ENI acquired a 20 per cent stake in Gazprom Neft, an
oil production company and a member of the Gazprom Group.49
Following the completion of Blue Stream, ENI and Gazprom became partners in an even larger
project, officially launched in 2007, the South Stream pipeline. In the South Stream
consortium, Gazprom owned 50% and ENI 20% of the shares, whereas Électricité de France
and the German Wintershall owned 15% each. The pipeline was intended to transport up to
63 bcm/year to Italy and Austria via the Black Sea and the Balkans. By 2014,
intergovernmental agreements and contracts to lay the offshore sections had been signed.
However, in late 2013 the European Commission stated that the intergovernmental
agreements were in breach of European legislation and had to be renegotiated.50 The onset
of the Ukraine crisis, Russia’s annexation of Crimea and the ensuing sanctions stalled the
project. In December 2014, Russian President Vladimir Putin announced the cancellation of
South Stream and stated that Gazprom would build TurkStream in its stead. However, as ENI
had not been consulted, the cancellation strained the longstanding partnership with
Gazprom. Saipem, which was meant to lay an offshore part of the pipeline, suffered
considerable economic losses.51
However, the partnership has survived the debacle of South Stream. While Saipem and
Gazprom settled their dispute over South Stream amicably in April 2019, their cooperation
has continued in new projects, which are also related to the creation of a Southern route for
49
See Gazprom.com, http://www.gazprom.com/about/history/events/italy40/. However, Eni resold its 20 per
cent stake to Gazprom in 2009.
50
Euractiv. com, 6 December 2013, https://www.euractiv.com/section/central-europe/news/eu-countries-askfor-help-to-escape-from-south-stream-mess/.
51
Bloomberg, 6 March 2015, https://www.bloomberg.com/news/articles/2015-03-06/gazprom-said-to-paysaipem-for-vessels-at-dropped-black-sea-link.
25
Russian gas exports to Europe.52 Moreover, Saipem has been involved in the construction of
the Nord Stream pipeline (in 2011-12), carrying gas from Russia to Germany via the Baltic Sea,
and was awarded a contract to build a section of the Nord Stream-2 pipeline (the construction
of which is ongoing).53 In December 2018, Saipem was awarded a contract to build some of
the infrastructure of the Arctic LNG-2 project, which is led by the Russian energy company
Novatek and aims to export liquefied natural gas (LNG) to Asia and Europe in particular.54
Figure 5. Italian gas imports by country of origin (million tons of oil equivalent)
25
20
15
10
5
0
2013
2014
Russia
2015
Algeria
Qatar
2016
Libya
2017
Netherlands
Source: ResourceTrade.Earth
Today, ENI’s activities in Russia cover all areas: from the exploration and production of
hydrocarbons to the power, refining and marketing sectors. In 2017 the supply of natural gas
of the Russian Federation to ENI were 28.09 billion cubic meters. ENI continues to hold a 50%
interest in the Blue Stream underwater pipeline. It also operates in Russia in the retail market
52
Natural Gas World, 28 February 2019 https://www.naturalgasworld.com/italys-saipem-eyes-better-timesas-it-reveals-2018-loss-68350; Reuters, 31 July 2018 https://uk.reuters.com/article/uk-saipemgazprom/saipem-says-contract-to-transport-gas-to-serbia-was-awarded-by-gazprom-idUKKBN1KL2GF.
53
See http://www.saipem.com/sites/SAIPEM_en_IT/scheda/Nord%20Stream.page and Reuters, 19 September
2017, https://www.reuters.com/article/us-saipem-ceo/saipem-ceo-sees-work-on-nord-stream-ii-going-aheadif-conditions-right-idUSKCN1BU1EM.
54
Saipem, 19 December 2018, http://www.saipem.com/sites/SAIPEM_en_IT/con-sidedx/Press%20releases/2018/Arctic%20LNG.page.
26
(oil and non-oil) and in the wholesale market (lubricants) through its subsidiary ENI Nefto.55
On 21 March 2017, ENI and Gazprom signed a new memorandum of understanding. The
document reflects the parties’ interest in developing the southern corridor for gas supplies
from Russia to European countries, including Italy56, and the modernisation of the Russia–
Italy gas supply agreements. The memorandum also provides for the consideration of
partnership options in the LNG sector.57
In addition to the partnership with Gazprom, in 2012 ENI started cooperation with the Russian
state-owned company Rosneft, one of the largest global oil producers. The companies have
signed a strategic partnership memorandum based on which joint ventures will be created
for the development of fields in the Barents Sea and the Black Sea. ENI will hold a 33% stake
in the joint ventures and finance the necessary geological exploration work to confirm the
commercial value of the fields. Technology exchange is another key element of the strategic
partnership between Rosneft and Eni. The Italian company pledged to contribute significantly
to the joint projects by using its extensive experience acquired in Norway and other similar
contexts. Moreover, in May 2017 ENI and Rosneft signed a cooperation agreement
concerning inter alia refining, trading, logistics and marketing both in Russia and abroad.58
The joint development of the Zohr gas field off the Egyptian coast – the largest gas discovery
ever made in Egypt and in the Mediterranean Sea – epitomises the two companies’
cooperation abroad. ENI holds a 50% stake in the project, while Rosneft acquired a 30% stake
in October 2017 (BP and Mubadala Petroleum hold 10% each). Both ENI and Rosneft see the
Eastern Mediterranean and the Middle East as one of their strategic directions of
development.59 ENI’s long-standing presence in the region, as well as Russia’s growing
55
Eni’s activities in Russia, https://www.eni.com/enipedia/en_IT/international-presence/asia-oceania/enisactivities-in-russia.page.
56
The ENI-Gazprom memorandum was followed by a cooperation agreement between Gazprom, the ItalianFrench company Edison and Greek DEPA (inked in June 2017) for the construction of the Poseidon pipeline
between Greece and Italy, which is part of the envisaged southern route for Russian gas supplies to Europe; see
http://www.gazprom.com/press/news/2017/june/article335060/.
57
ENI.com, ‘Partnership with Gazprom and Rosneft’, https://www.eni.com/en_RU/eni-russia/partnersprojects/partners-projects.shtml.
58
ENI in Russia, https://www.eni.com/en_RU/eni-russia/partners-projects/rosneft/rosneft.shtml.
59
ENI.com, ‘Zohr Ramp-up: ENI reaches 2 bcfd production target’, 8 September 2018,
https://www.eni.com/en_IT/media/2018/09/zohr-ramp-up-eni-reaches-2-bcfd-production-target; see also
Rosneft’s website, https://www.rosneft.com/press/news/item/192153/.
27
economic and political influence there following its military intervention in Syria, also have
the effect of sustaining ENI’s and Rosneft’s cooperation in a volatile area.
Italian natural gas infrastructure company SNAM also plays an important role in ItalianRussian industrial cooperation in the energy sector. SNAM was originally a subsidiary of ENI,
but it became an independent company in 2012. It has long played an important role in
building the pipeline infrastructure that allows Russian-Italian gas trade. In the late 1990s, it
expanded gas transportation capacity between Russia and Italy. In 2014, it acquired 84% of
the TAG pipeline, which ships Russian gas to Italy via Austria. In 2017, SNAM signed a
memorandum of understanding with Ukrainian companies Naftogaz, Ukrtransgaz and the
Slovak Eustream for collaboration in the operation and enhancement of the Ukrainian gas
transmission system, which is currently critical for the transit of Italy’s imports of gas from
Russia.60 Moreover, in 2018 SNAM (together with ENI) started discussions with Gazprom for
the construction of a pipeline that would connect the TurkStream project to the Italian market
via the Balkans, as an alternative route to Ukrainian transit.61
In the 2000s, Italian-Russian industrial cooperation in the energy sector extended to power
generation thanks to the involvement of Italian multinational company ENEL (of which the
Italian state is the main shareholder, with 23.6% of its capital) in the Russian market. ENEL
started its operations in Russia in 2004 and, by the late 2000s, it acquired a 56.4% stake in
OGK-5, which was the renamed ENEL OGK-5 and, in 2014, ENEL Russia. ENEL Russia runs four
thermal power plants located in the Tver region, the Ural district and the North Caucasus, for
a net installed capacity of 8.9 GW. In June 2017, ENEL Russia was awarded projects to build
two wind farms in the Rostov and Murmansk regions, by 2020 and 2021 respectively, for a
total installed capacity of 291 MW. In June 2019, ENEL received a third award to build another
wind farm in the Stavropol region. In October 2017, ENEL opened an Innovation Hub at
Moscow’s Skolkovo Innovation Centre, which aims at extending ENEL’s global start-up
partnerships through the contribution of Russian companies over innovation and
sustainability projects.62
60
See SNAM website http://www.snam.it/en/about-us/history/index.html.
Interfax, 20 March 2018, http://interfaxenergy.com/gasdaily/article/30070/eni-and-snam-mulling-southstream-lite-investment.
62
See ENEL Russia website https://www.enelrussia.ru/en.html.
61
28
Furthermore, in a joint venture with ESN, ENEL owns 49.5% of Rusenergosbyt, one of Russia’s
largest energy suppliers and the sole operator powering the Russian Railways system across
the country. In May 2018, ENEL signed an agreement with Russian Railways for the
development of an innovative energy storage system to be installed across Russia’s railway
network, a first-of-its-kind battery technology used in the railway sector anywhere. In October
2018, on the occasion of the visit of Italy’s Prime Minister Giuseppe Conte to Russia, ENEL
signed another agreement on strategic cooperation with Russian Railways, which allows the
two companies to plan actions and investments over a long-term basis. Significantly, ENEL
also pledged to increase significantly energy efficiency in all segments of the transportation
business by using renewable energy sources and by implementing automation and digitalised
systems.63
The transport sector: from cars to aeronautics
As we have seen, Italian-Soviet cooperation in the car sector began in the 1960s, with the
construction of the large plant at Tolyatti and the production of several car models based on
FIAT equivalent models. Between 1970 and the early 1980s, production of seven such models
was launched at the VAZ plant (VAZ-2101 to VAZ-2017), which were all based on the FIAT 124
line and its contemporary evolutions. They epitomised the period of gradual mass
motorisation in the Soviet Union. Some of these models were produced until the early 2010s.
Tolyatti became the headquarters of the AvtoVAZ group, and its plant remains the largest car
manufacturer in Russia and Eastern Europe. However, after its initial key role, FIAT lost its
prominent position in the Russian car market. Following the collapse of the Soviet Union,
AvtoVAZ was privatised and FIAT’s competitors played a more important role. Beginning in
2008, the Renault–Nissan–Mitsubishi Alliance progressively bought a majority of stakes, and
now the French Renault Group owns a 67.61% stake of AvtoVAZ, making the latter a Renault
subsidiary (the minority stake is held by Russia’s state-owned conglomerate Rostec).
63
‘ENEL CEO signs agreement with Russian Railways on strategic cooperation’, 24 October 2018,
https://www.enel.com/media/press/d/2018/10/ENEL-ceo-signs-agreement-with-russian-railways-onstrategic-cooperation.
29
Yet, in the mid-2000s, FIAT attempted to reacquire a stronger position in the Russian market.
This attempt was part of FIAT’s export to strengthen its role in emerging markets, where the
company lagged behind many Western and Asian competitors. Prospects for an investment
in the Russian market appeared bright: before the 2008 financial crisis, Russia seem set to
overtake Germany as Europe’s biggest car market. In 2006, FIAT signed a licensing agreement
with the Russian company Sollers to assemble and distribute FIAT cars and commercial
vehicles in Russia. Some models (FIAT Albea and Doblò) were assembled at the Naberezhnye
Chelny plant in Tatarstan, while the UAZ Patriot plant in Nizhny Novgorod produced engines
for the FIAT Ducato. Moreover, a new factory was established in Elabuga to produce the FIAT
Linea and Ducato models.64
Despite the contraction in car sales following the 2008 crisis, in 2010 FIAT and Sollers
established a 50-50 joint venture, under which they envisaged to invest € 2.4 billion and to
produce half a million cars and sports vehicles by 2016, mostly for the Russian market. FIAT’s
investment was one of the largest the car manufacturer had undertaken outside Italy and
involved considerable risks, as the company only had a weak presence in the Russian market
(in January 2011, it was ranked as the 27th car brand in Russia). However, FIAT argued that
the joint venture was part of a strategy to increase its international presence following its
acquisition of Chrysler. Moreover, other foreign carmakers were expected to form assembly
ventures in Russia in order to evade high car import duties. While many Russia carmakers
were struggling with the consequences of the financial crisis, Sollers, FIAT’s partner, was
expanding its production thanks to a loan from VEB, a state bank. The joint venture was
supported by the Kremlin, and Putin was present at the signing ceremony.65
However, a year later, in February 2011, Sollers decided to end the partnership with FIAT and
to produce instead cars and commercial vehicles for Ford. Nevertheless, for some time FIAT
upheld its plans to install production capacity in Russia in order to manufacture up to 300,000
vehicles of the FIAT and Chrysler brand. This decision was made while the Russian government
introduced incentives for carmakers that produced locally, and the Russian market was
64
See Automotive News Europe, 1 October 2007,
https://europe.autonews.com/article/20071001/ANE/70928044/fiat-to-open-new-plant-in-russia and Sputnik,
8 February 2006, https://sputniknews.com/russia/2006020843424872/.
65
Financial Times, 12 February 2010, https://www.ft.com/content/be93b756-1748-11df-94f6-00144feab49a.
30
experiencing a strong recovery after a slump in 2009.66 In 2012, FIAT also signed a letter of
intent with Sberbank for a joint venture to produce 120,000 Jeep-branded cars yearly and
build a new car plant in Saint Petersburg.67 However, the recovery ceased again in 2013 and
was followed by a decline in car sales that became more serious in 2015-6, as a consequence
of the broader economic crisis in Russia. Sales of the FIAT Chrysler Automobiles group (FCA,
of which FIAT is now part) decreased too, and in 2017 FCA decided to cease FIAT sales in
Russia; by then, the FIAT 500 was the only remaining FIAT model produced in Russia, and sales
had dropped to only 2,159 units in 2016. Nonetheless, the group maintained its presence in
the Russian market by opting for a focus on the Jeep (Chrysler) brand. The removal of FIAT
models from FCA’s Russian lineup was functional to this refocus. The Russian car market
experienced recovery in 2017 and 2018, leading to FCA’s hopes that Russian buyers will start
purchasing Jeep SUVs. However, the largest shares of both the Russian market and the
current recovery remain under the control of competitors such as Lada, Kia, Hyundai, Renault,
Toyota and Volkswagen, with FCA relegated to a minor role (with only a 0,2% share of the
Russian vehicle industry).68
IVECO’s sale of armoured vehicles was another notable effort of the Italian car industry in the
Russian market. IVECO has been active in Russia since 1991, first with a representative office
and then with a subsidiary since 2007. Its main focus has been the sale of commercial vehicles
and buses. Moreover, in 2010 the Russian Ministry of Defence became interested in the
IVECO-produced light multirole armoured vehicle, known as Lince (Lynx). In 2011, the Ministry
contracted 358 such vehicles (renamed ‘Rys’ in Russia), in a co-production effort that initially
envisaged up to 1,775 vehicles. The deal was part of a broader strategy supported by former
Russian defence minister Anatoly Serdyukov to modernise the Russian army and reduce
procurement costs by opening the market to foreign competition. Having completed the
assembling of the first batch of 358 vehicles in 2014, however, Moscow suspended purchases.
A number of factors may have contributed to this outcome, such as the European sanctions
that started in 2014, which could have affected new orders (even though the contract was
66
Financial Times, 26 February 2011, https://www.ft.com/content/8792ce18-410e-11e0-bf62-00144feabdc0.
Moscow Times, 12 April 2012, https://www.themoscowtimes.com/2012/02/26/fiat-sberbank-make-jeepsa12879.
68
See Carsitaly https://www.carsitaly.net/fiat-car-sales_russia.htm and The Newswheel, 19 July 2017,
https://thenewswheel.com/fca-says-nyet-to-future-fiat-sales-in-russia/. Russia’s Minister of Industry and Trade,
Denis Manturov, argued that FCA’s limited role in the Russian market may be due to ineffective sales tactics.
67
31
signed before the imposition of EU sanctions), or competition of the Russia-produced Tiger
vehicles, that some saw as more suited to the needs of Russian geography and weather.
However, the vehicle has seen operational deployment during the Russian military campaign
in Syria, which suggests that the army considers it suitable for its operations there.69
While FIAT’s and IVECO’s involvement in Russia has been revised towards more modest goals
in recent years, Pirelli – a company that works in the closely related field of tyre production –
has strengthened its presence. In November 2008, Pirelli signed an agreement with Rostec to
establish a joint venture manufacturing car tyres. In 2011, it purchased assets in two plants in
Kirov and Voronezh for a total value of €222 million. In 2013, Pirelli raised its stake in the joint
venture with Rostec and the GHP group to 65% (leaving 25%+1 to Rostec and 10% to GHP).
Despite the decline in car sales in Russia, in October 2018 Pirelli planned to invest €100 million
in the expansion of the Voronezh tyre factory and double production volume, aiming to
export a substantial part of the output. Pirelli’s plants in Russia manufactures tyres for
companies such as Volkswagen, Skoda, KIA, Renault and Avtovaz.70
The activities of Italian companies in the Russian transport sector expanded to the field of
aeronautics in the post-Soviet period, including military jet trainers. An early attempt was the
plan to develop the jet trainer Yak/AEM-130 in the 1990s. In 1992 Alenia Aermacchi (a
company of the Italian Leonardo-Finmeccanica conglomerate) signed an agreement with
Russian Yakovlev to provide technical and financial support for the trainer that Yakovlev was
developing for the Russian air force. Alenia acquired a 50% stake in the development
programme. Alenia also obtained the right to modify and market the airplane in the West.
The Yak/AEM-130 first flew in 1996, and Russia pledged to buy 200 planes. However, in 2000
the lack of Russian financial support and differences in priorities led to the end of the
partnership, and the two companies continued to develop the plane separately. Yakovlev was
69
‘Russia completes assembly of Iveco armoured vehicles’, 27 January 2014,
https://www.janes.com/article/45635/russia-completes-assembly-of-iveco-armoured-vehicles; Defense Daily
News, 13 November 2014, https://www.defenseindustrydaily.com/russia-to-buy-western-lince-mraps-06675/;
Rbth, 25 January 2016, https://www.rbth.com/defence/2016/01/25/russia-continues-to-buy-iveco-lmvarmored-cars-from-italy_562027.
70
Rostec, 8 August 2013, https://rostec.ru/en/news/2628/; ‘Rostec and Pirelli Tyre Russia will invest €100
million in the expansion’, 29 October 2018, http://rusautonews.com/2018/10/29/rostec-and-pirelli-tyre-russiawill-invest-e100-million-in-the-expansion/; ‘Rostec and Pirelli keep upgrading the Kirov Tyre Plant’, 24 February
2019, http://rusautonews.com/2019/02/24/rostec-and-pirelli-keep-upgrading-the-kirov-tyre-plant/.
32
entitled to sell its Yak-130 to countries in the former Soviet Union, India and Algeria, whereas
Alenia would market its M-346 in Nato countries.71
As Russia’s economy boomed in the 2000s, the Leonardo-Finmeccanica conglomerate
renewed its interest in cooperation with Russian companies. In 2008, it signed a partnership
agreement for the establishment of a number of joint ventures to produce carbon fiber
components with Russian Technologies State Corporation (or Rostec, which had been created
in 2007).72 In 2010, Finmeccanica signed a $2 billion deal with Russian Railways to develop
signaling, telecommunications, automation and safety technology for the Russian rail system
via its subsidiary Ansaldo. The joint venture, where Ansaldo controlled 49% of the stakes,
focused on further developing the ITARUS-ATC safety and signaling system, so that Russian
trains entering Finland would meet European standards.73 Furthermore, in 2010 a fast train
connection between Russia and Finland was launched by the Russian and Finnish Railways
using Italian Pendolino trains.
One of the most significant instances of cooperation between Finmeccanica and Russian
partners took place in aeronautics. In the mid-2000s, the Russian aircraft manufacturer
Sukhoi (a member of Russia’s United Aircraft Corporation, UAC) designed and developed a
regional jet, known as Sukhoi Superjet 100 (SSJ100). The company received financial support
from the Russian government, and integrated numerous Western-developed systems in the
aircraft (i.e. avionics from Thales, flight controls from Liebherr, hydraulic systems from Parker
Hannifin). Sukhoi’s goal was that of marketing the plane also in the West, in addition to Russia.
To achieve this goal, in 2007 Sukhoi established the SuperJet International (SJI) joint venture
with Alenia Aeronautica (of the Leonardo-Finmeccanica group). The joint venture, where
Alenia held 51% and Sukhoi Civil Aircraft Company (SCAC) 49% of the stakes, was to support
customization, crew training, global after-sales services and deliveries of the Sukhoi Superjet
71
Flight International, 7 August 1996, https://www.flightglobal.com/news/articles/aermacchi-proves-yak130aem-performance-12205/, 21 October 1998 https://www.flightglobal.com/news/articles/italy-studies-theyakaem-130-as-russia-falters-44061/
and
1
August
2000,
https://www.flightglobal.com/news/articles/aermacchi-assembles-m-346-trainer-team-to-replace-ru-69047/.
72
AvioNews, 11 July 2008, https://www.avionews.com/en/item/1096297-finmeccanica-and-russiantechnologies-sign-a-partnership-agreement-in-the-sector-of-composite-materials.html.
73
Moscow Times, 28 November 2010, https://www.themoscowtimes.com/2010/11/28/russian-railways-signs2bln-italian-venture-a3291.
33
100 in Europe, America, Oceania, Africa, and Japan. Moreover, in 2009 Alenia invested $183
million in the project and acquired a 25% stake of SCAC. 74
The first SSJ100s entered service with Aeroflot and the Armenian airline Armavia in 2011.
Later, other Russia-based airlines purchased the plane. In 2013, Mexican airline Interjet
purchased and began operating several SSJ100s, as the first buyer in the Western hemisphere.
In 2016, it was followed by the first Western European operator, Irish carrier Cityjet, which
bought 22 aircraft. However, the plane’s sales and operation in the West later met with
difficulties due to the lack of service facilities in many Western airports, which made it
problematic to address technical issues. Because of these problems, which reduced
profitability, Leonardo-Finmeccanica decided to leave the SCAC joint venture, and reduced its
stake in SJI to 10%. However, the Italian company remained in charge of the plane’s
certification in the EU, interior production and sales support. In 2018, sales of the plane
increased to over 100, largely thanks to an Aeroflot order. In early 2019, a new order was
made by Thai Kom Airlines for six planes.75 Overall, the SSJ100 appears to have had a history
of mixed success and difficulties so far. While the plane has not had a breakthrough in
Western markets, sales in the domestic and other regional markets have continued and
increased recently.
In the field of passenger jet airliners, Leonardo has recently become involved in a significant
and ongoing Chinese-Russian effort to develop the COMAC CR929 long-range airliner. The
CR929 programme was launched by the Chinese COMAC together with the Russian Company
UAC in 2017. In October 2018, Leonardo signed a memorandum of understanding with
Kangde Investment Group of China. According to the MoU, Leonardo will leverage
competences and intellectual property developed in Italy for the CR929 project, and
eventually form a joint venture named Kangde Marco Polo Aerostructures Jiangsu Co. Ltd.76
The plane will be developed by the China-Russia Commercial Aircraft International
Corporation Limited, where the Russian and Chinese partners hold a 50% stake each. The
74
United Aircraft Corporation, Superjet 100, https://www.uacrussia.ru/en/aircraft/lineup/civil/superjet100/#history.
75
Superjet International, https://www.superjetinternational.com/media-center/news/; Airwaysmag.com, 1
May 2017, https://airwaysmag.com/manufacturer/86468/.
76
Leonardo, 26 October 2016, https://www.leonardocompany.com/en/-/comac-cr929.
34
developers aim to produce a plane that will be 10-15 percent cheaper to run than planes from
Boeing and Airbus, and thus challenge their duopoly in civilian aircraft.77
A further and so far successful Italian-Russian deal in the aeronautics sector concerns the
production of Leonardo’s helicopters in Russia. In 2012, Russian Helicopters and
AgustaWestland (subsidiaries of Rostec and Leonardo-Finmeccanica respectively) made a
deal and started assembling AW139 helicopters in Russia. The AW139 is an intermediate
helicopter that is used in law enforcement, corporate transport, search and rescue,
emergency medical service and maritime operations. In 2014, Rosneft, Rostec and LeonardoFinmeccanica signed a trilateral agreement for strategic partnership. As part of the deal,
Russian Helicopters and Agusta Westland established a joint venture based at the HeliVert
plant in the Moscow Region, which will also build the new AW189 helicopter. Rosneft pledged
to buy up to 160 helicopters from HeliVert, which it will use for the development of its
offshore projects in the Arctic.78 HeliVert was initially a 50-50 joint venture between Agusta
and Russian Helicopters; in 2016 Rosneft joined the consortium and shares were redistributed
so that the Italian company (now called Leonardo Helicopters) owes 40%, while Russian
Helicopters and Rosneft hold 30% each.79
Leonardo’s
industrial
cooperation
with
Russian
counterparts
has
extended
to
telecommunications and logistics too. In 2016, as part of the joint venture Thales Alenia Space
(where Leonardo holds 33% of the shares), the company signed a deal with the Russian
Satellite Communication Company to build two satellites together with Russian partner IssReshetnev. The deal marked the continuation of a lengthy collaboration between ISSReshetnev and Thales Alenia Space. The companies have used the combination of a Russian
spacecraft bus and European payload for more than a dozen spacecraft.80 Moreover,
Leonardo has developed strategic cooperation with Russian Post, which in 2016 led to an
agreement to build a logistics hub at Tolmachevo International Airport in Novosibirsk.81
77
Reuters, 22 May 2017, https://www.reuters.com/article/us-china-comac-russia-idUSKBN18I0KZ.
Rosneft, 31 December 2014, https://www.rosneft.com/press/releases/item/173911/.
79
Leonardo, 17 June 2016, https://www.leonardocompany.com/en/-/accordo-russia-agreement-aw189.
80
Milano Finanza, 21 June 2016, https://www.milanofinanza.it/news/la-russia-manda-in-orbita-leonardo201606201230196608; SpaceNews, 29 December 2016, https://spacenews.com/rscc-pays-russian-europeanmanufacturing-team-to-build-next-two-satellites/.
81
Leonardo, 23 June 2016, https://www.leonardocompany.com/en/-/russian-post-novosibirsk.
78
35
The financial sector: the case of Banca Intesa
Financial cooperation is an important prerequisite to expanding economic cooperation.
Several Italian banks are active in Russia and support both Italian and Russian businesses
operating in the country – for instance, UniCredit, Monte dei Paschi di Siena and Intesa
Sanpaolo.82 Banca Intesa has played an especially important role in the financing of ItalianRussian economic cooperation, both in the past and the present. Banca Intesa is a subsidiary
of the Italian Banking Group Intesa Sanpaolo, which is the fourth largest banking group in the
Eurozone (with a market capitalization of €34 billion as of December 2018) and a leader in
Italy in all business areas. The history of Intesa Sanpaolo dates back to the sixteenth century.
The Intesa Sanpaolo group came into being a result of several mergers, the last of which was
the one between Banca Intesa S.p.A. and Sanpaolo IMI in 2007. The bank has foreign
subsidiaries in twelve countries in Central and Eastern Europe, the Middle East and Northern
Africa, including Banca Intesa in Russia.83
Banks under the Intesa Sanpaolo Group began cooperation with the Soviet Union as early as
the 1920s. In 1922, the Banca Commercial Italiana/Comit (which is now part of the Group)
became the official bank of a Soviet diplomatic delegation to Italy. The cooperation of the
bank with the Soviet Union continued in the following decades and became particularly
intense in the 1960s and 1970s. In 1973, the bank was authorised to open a permanent
representative office in Moscow, the first of a foreign bank in the Soviet Union. The bank’s
growing presence in the USSR was linked to the rise in economic and industrial cooperation
between Italy and the USSR. The bank became the ‘financial arm’ of the alliance of Italian
enterprises that attempted to acquire a leading role among foreign investors in the Soviet
market (see above, pp. 8-11). Banca Commerciale Italiana supported the involvement of
Italian companies in large Soviet industrial projects, most notably the VAZ plant in Tolyatti
and a tube-rolling plant in Volzhsk. The bank also took part in the financing of the TAG
pipeline, the first pipeline connecting Italy and the Soviet Union in 1974 (see p. 12). In 1989,
Banca Commerciale Italiana participated in the establishment of the International Moscow
Bank, the first commercial bank of Soviet and Western shareholders. At this stage, the bank
was one of the top five foreign banks in terms of its project loan portfolio in the USSR. Hence,
82
83
Info Mercati Esteri, Accesso al Credito, http://www.infomercatiesteri.it/accesso_credito.php?id_paesi=88.
Banca Intesa, Annual Report 2018, p. 126.
36
during the late Cold War, Banca Commerciale Italiana became specialised in the Soviet
market, acquiring expertise and establishing a tradition that now constitutes the foundations
of its successor’s (Banca Intesa) operations in Russia.84
In the post-Soviet period, the Intesa Sanpaolo group strengthened its presence in the Russian
market by developing its operations in two directions, the financing of small and medium
enterprises and of large infrastructural projects. The acquisition of the KMB bank in 2005, a
Russian bank that focused on small and medium enterprises, was a key step, making Intesa
Sanpaolo one of the main foreign investors in the Russian banking sector. Following the
acquisition, the Group’s activities in Russia were merged under the control of Banca Intesa
(the first Russian bank to be wholly owned by an Italian bank), which continues to focus on
financing Russian and Italian firms working in the Russian market. Thanks to its cooperation
with the Russian Agency for Export Credit (EXIAR), Banca Intesa is able to provide competitive
conditions for servicing its clients’ foreign economic activities and offer a broad range of credit
products. The bank devotes particular attention to Italian firms that are interested in investing
in Russia, helping them to find adequate business partners and organising events to this end.
A special department offers banking and consulting services on all issues related to Italian
projects in Russia. By the same token, the bank provides services to Russian firms interested
in finding and expanding business contacts in Italy. Therefore, Banca Intesa plays an essential
role in the furthering of Italian-Russian economic relations.85
In the 2000s, Banca Intesa financed the construction of large infrastructural projects, most
notably the Blue Stream pipeline connecting Russia and Turkey (see p. 24) and the Nord
Stream pipeline, which ships Russian gas to Germany via the Baltic Sea.86 The introduction of
Western financial sanctions in 2014, and of US secondary sanctions in 2017, constitutes a new
challenge for Banca Intesa in Russia. Nevertheless, the bank has continued its operations, and
has even co-financed the largest privatisation scheme of recent years in Russia. In 2016, Banca
Intesa provided a €5.2 billion loan to Glencore and the Qatar Investment Authority (QIA) for
the privatisation of a 19.5% stake of Russian state company Rosneft, one the world’s largest
oil companies. The bank initially encountered problems in syndicating the loan to Western
84
Banca Intesa, Annual Report 2018, p. 127.
Banca Intesa, Annual Report 2018, pp. 141-2.
86
Intesa Sanpaolo Activities in Russia, https://www.bancaintesa.ru/en/about/intesa/1/.
85
37
banks due to US secondary sanctions.87 However, the issue was solved when the Chinese
conglomerate CEFC agreed to buy a 14.16% stake in Rosneft from Glencore and QIA, which
provided additional financing for the deal.88
As of 2018, Banca Intesa in Russia had assets amounting to 60 billion roubles, with an increase
of 5 billion roubles from the previous year and a total loan portfolio reaching 40 billion
roubles. The bank has continued to consolidate its position in the Russian market by
expanding its presence in all its key regions (with 32 branches in 22 regions at present, from
Kaliningrad to Vladivostok); in 2018, it registered a 25% increase in the number of private
customers. Also in 2018, Banca Intesa participated in numerous large transactions of
syndicated financing in Russia, involving the Russian Copper Company Group, Sibanthracite
Group, Uralkali and the Chelyabinsk Pipe Plant Group among others. Moreover, it has
participated in the state support programme of small and medium enterprise lending. The
bank has issued documentary instruments to the largest domestic and foreign providers of
goods and services in Russia, and has established partnerships with top banks worldwide.89
Next to its financial activities, Banca Intesa has cooperated with Italian diplomatic
representations and with cultural associations in order to foster Italian-Russian economic,
political and cultural relations. To this end, the bank finances the Associazione Conoscere
Eurasia (‘Knowing Eurasia Association’), an autonomous cultural association based in Verona,
Italy. The Chairman of the Board of Directors at Banca Intesa, Antonio Fallico, was also the
founder of the association. Conoscere Eurasia plays a role in the organisation of the Saint
Petersburg International Economic Forum (SPIEF). Since 2016, it has organised the Italian
pavilion at the Forum and managed both institutional and corporate contacts together with
the Italian embassy in Moscow. Moreover, together with SPIEF and the city of Verona, the
association organises the Eurasian Economic Forum in Verona, which has become a
consolidated business forum for companies based in Italy, Russia and other Eurasian countries
(the annual forum took place for the 11th time in October 2018). In addition, Conoscere
Eurasia has organised business forums in other Italian cities and regions and contributed to
the knowledge of Russian culture in Italy and Italian culture in Russia, in cooperation with
87
Reuters, 25 August 2017, https://www.reuters.com/article/us-intesa-loan-sanctions-idUSKCN1B5172.
Reuters, 27 April 2018, https://www.reuters.com/article/us-intesasanpaolo-rosneft-glencore-cefc/intesasanpaolo-not-concerned-about-glencore-loan-for-rosneft-idUSKBN1HY2IW.
89
Banca Intesa, Annual Report 2018, p. 129, 132, 136-140, 144.
88
38
museums and cultural organisations. Furthermore, Banca Intesa has cooperated with the
Italian embassy in Russia to create an internet portal to promote Russian tourism in Italy. The
bank also publishes a biweekly issue in the main Italian economic daily, Il Sole 24 Ore, with
information on economic developments and business opportunities in Russia. 90 Therefore,
Banca Intesa has successfully combined the pursuit of its business interests with an agenda
that is functional to enhancing Italy-Russia relations more broadly.
Machinery and appliances: cooperation across sectors
‘Machinery and appliances’ is the largest single category of Italian exports to Russia in terms
of value, and thus deserves a brief discussion. According to official Italian statistics, the value
of Italian exports in this category was over €2 billion in 2018. This included machinery that
was used in numerous and diverse sectors, from heavy industry to household appliances. As
seen in the discussion of historical Italian-Russian industrial cooperation, Italian exports of
machinery and machine tools developed in support of Italian investments in the Soviet car
and energy industry. Machinery exports to post-Soviet Russia swiftly expanded to other fields.
Due to the relative weakness of the Russian light industry and the size of the Russian market,
Italian companies have found lucrative opportunities. Today, Italian producers of household
appliances Ariston and Candy have plants in Russia (Ariston in the Saint Petersburg region,
and Candy in Kirov), which started production locally in the mid-2000s. Indesit has two
factories in Lipetsk (where it employs around 4,000 people) producing refrigerators and
washing machines, as well as a large logistics centre.91
In the manufacturing sector, Danieli is another notable example of Italian-Russian industrial
cooperation. The company produces machinery and appliances for the steel industry, and has
a long-standing presence in the Russian market. In 2019, the large Russian metallurgy
company Metalloinvest awarded Danieli a contract to supply a new heat treatment complex
to process hot-rolled bars for mechanical engineering applications, for a total value that has
been estimated at over €200 million.92 In the same sector, the Konar-Cimolai plant in
90
Banca Intesa, Annual Report 2018, p. 75.
Info Mercati Esteri, http://www.infomercatiesteri.it/public/schedesintesi/s_88_russia.pdf.
92
Danieli, 11 June 2018 https://www.danieli.com/en/news-media/news-events/danieli-heat-treatmentcomplex-oemk-russia_37_294.htm; Milano Finanza, 11 February 2019
https://www.milanofinanza.it/news/per-danieli-un-nuovo-contratto-in-russia-201902111248266698.
91
39
Chelyabinsk is considered as a recent ‘best case’ of Italian-Russian industrial cooperation. The
plant was opened in 2014 and specializes in producing steel structures for bridges, stadiums,
skyscrapers, objects of the oil and gas industry and power transmission lines.93
Russia has remained a leading market for Italy’s machine tool sector; in 2017, it was the eighth
largest national market for Italy’s sectoral exports, with a 17% growth compared to 2016. 94
Italian machinery is in demand also in the food processing, plastic, rubber and wood industry.
A growth in demand is expected for agricultural and medical equipment due to the Russian
government’s focus on improving these sectors. Some Italian producers have recently opened
plants in Russia’s new Special Economic Zones (SEZ). This is the case of Fondital, which has
started production of boilers and radiators in Lipetsk in late 2018. Good investment
conditions, the availability of qualified workforce and the strategic location of the SEZ (close
to key transport infrastructure) led the company to launch production in Russia.95
Italian machinery and the related technology are hard to replace domestically, therefore they
will likely remain important components of Italian-Russian economic interaction. Russia’s
import substitution plans and special fiscal regimes will probably induce more Italian
producers to localise production in Russia. Here, competition is more likely to come from
other foreign companies, particularly German ones in the high tech sector and Chinese and
Turkish ones in other sectors.
The traditional ‘Made in Italy’: food, fashion and furniture
Russia is an important market for traditional ‘Made in Italy’ consumer products: apparel and
shoes (including leather products), food and furniture. Italian design is extremely popular
among Russian customers.96 Products of the clothing industry make up an important
component of Italian exports to Russia: in 2018, their value was of nearly € 1 billion. This made
Italy the second largest sectoral exporter to Russia, coming only after China. Russia is also the
93
‘Russia and Italy: Doing Business Together’, Deloitte CIS Research Centre, 2017, p. 12.
ETMM, 28 May 2018, https://www.etmm-online.com/russia-a-leading-market-for-italys-machine-toolsector-a-719500/.
95
Sputnik Italia, 20 March 2019, https://it.sputniknews.com/opinioni/201903207439324-A-Lipetsk-nuovarealt-industriale-dallItalia-apre-la-ditta-Fondital/.
96
Yulia Sinchuk, ‘The furore of Italian fashion in Russia’, in G. Motta and A. Biagini (eds.), Fashion through History:
Costumes, Symbols, Communication. Newcastle: Cambridge Scholars Publishing, 2017, 221.
94
40
most important market for the Italian clothing industry outside the European Union.
Marketing of Italian fashion products and accessories is excellent in Russia, with brand shops
and numerous sales points in shopping malls in Moscow and Saint Petersburg. Recently,
additional shops were opened in other cities, such as Ekaterinburg, Novosibirsk and Omsk,
thereby facilitating the reach of ‘Made in Italy’ fashion to the vast Russian market. Russia’s
accession to the WTO is expected to benefit sales of imported goods of the clothing and
leather industry. Customs duties in this sector were particularly high, reaching almost 20%. 97
Brands such as Prada, Gucci, Dolce & Gabbana have established a significant presence in the
Russian market. Italian companies became pioneers of fashion in the post-Soviet period.
Around the year 2000, Italian fashion brands started to be adapted to the Russian market, in
cooperation with Russian business actors. As of today, three major companies are involved in
this process: TSUM, Bosco and Crocus Group. TSUM was founded by a Russian entrepreneur
in 1994 as Mercury Trading; it now represents many brands including Gucci, Dolce & Gabbana,
Prada, Valentino, Cavalli and Versace. Bosco has 100 single-brand stores of clothes and
accessories, where 90% of the brands are Italian. In 2002 Crocus Group opened a large mall
in Moscow, which hosts many Italian boutiques including Armani, Versace and Missoni. In
2012, the volume of the Russian fashion market had an estimated value of €40 billion, with
the luxury segment dominated by imports from Europe. In 2014-5, the economic crisis in
Russia led to a decrease in sales, but the trend became positive again after 2016. 98
Furniture is another sector where Italian design is highly appreciated in the Russian market.
In 2018, the value of Italian exports to Russia in this area was around €360 million. While the
relevant Russian industry is growing, domestic demand is still satisfied mostly through
imports of finished or semi-finished products. In this sector, Italy is the second largest
exporter to Russia after China. The increase of Italian furniture exports in recent years is
mostly linked to the housing sector and, secondarily, to demand from shops, restaurants and
public procurement. The greater demand for Italian products has been accompanied by a
growing presence of Italian architects and interior designers in Russia.99
97
Info Mercati Esteri Russia, 2017, p. 6.
Sinchuk, ‘The furore of Italian fashion in Russia’, pp. 221-226.
99
Info Mercati Esteri Russia, 2017, p. 5.
98
41
Finally, the food and beverages sector is a key component of the ‘Made in Italy’ brand. After
2014, Italian exports in this area have been negatively affected by Russia’s counter-sanctions,
which concern primarily meat, fruit, vegetables and dairy products. After a considerable drop
until 2016, Italian exports increased again from €377 million in 2016 to €475 million in 2018
(out of which €132 million from the sale of beverages). Italy is the seventh largest supplier of
food products and the most important wine exporter to Russia.100 However, the import
substitution policy adopted by the Russian government in recent years requires Italian
companies to move production to Russia in order to have a better chance to preserve their
shares of the Russian market. This is particularly true of companies producing (counter-)
sanctioned goods, such as dairy products.
Some large Italian producers have already opened facilities in Russia. For instance, Parmalat
(selling milk, dairy products, juices and other drinks) has been active in Russia since 1991, and
now has production facilities in Ekaterinburg and Belgorod.101 The Cremonini group has
operated in the meat sector in Russia for thirty years and is one of the most relevant and
fastest growing Italian companies in the Russian market.102 Pasta producer Barilla has opened
a plant in the Moscow region and is currently planning to open another mill near Moscow.103
In the chocolate and confectionary sub-sector, Ferrero opened a large production facility in
the Vladimir region.104 The success of Italian food exporters in the Russian market will largely
depend on their ability to move from exports to localised production. Due to the current
policy of sanctions, the affected ‘Made in Italy’ products should be replaced by ‘Made with
Italy in Russia’ goods, so as to face the competition of new (domestic and foreign) producers
that are adapting to the changed context.
100
Info Mercati Esteri Russia, 2017, p. 6.
‘Russia and Italy: Doing Business Together’, Deloitte CIS Research Centre, 2017, p. 9.
102
Cremonini SPA, https://investinrussia.com/investors/22.
103
La Stampa, 24 October 2018, https://www.lastampa.it/2018/10/24/esteri/putin-riceve-conte-litaliapartner-economico-importante-della-russia-wZ7LvVSGdAoTrFjD0O7KbM/pagina.html.
104
Ferrero, https://www.ferrerocsr.com/focus-on/ferrero-russia/the-vladimir-plant/?lang=EN.
101
42
Conclusions and recommendations
Economic relations and industrial cooperation between Italy and Russia have a long history,
and developed significantly since the 1960s. The energy sector was the first area where
extensive cooperation took place, and remains the most important field of interaction today.
Key national majors are involved in this sector, such as Gazprom, Rosneft, Novatek (on the
Russian side), ENI, ENEL and SNAM (on the Italian side). Industrial cooperation has developed
in the transport sector too, ranging from cars to aeronautics. Important Italian companies
such as FIAT, IVECO and various members of the Finmeccanica-Leonardo conglomerate have
been active in Russia, often with projects of strategic importance for the country’s economic
plans and industrial policies. Italian companies have also been important providers of
machinery and technology to Russia, both through exports and (increasingly) local production
on Russian territory. Italy also maintains a solid presence in the financial sector in Russia,
despite the recent Western financial sanctions. The Intesa Sanpaolo Group has financed the
largest industrial and infrastructural projects with the involvement of Italian companies since
the Cold War. Today, it finances and supports Italian companies that are active in Russia
through its Russian subsidiary Banca Intesa.
Italian companies and entrepreneurs tend to consider Russia as a promising market, despite
the complex bureaucracy and rule of law issues that may sometimes complicate business in
the country. On the other hand, despite the ongoing political crisis, the Russian government
continues to see Italy as an economic partner (it is the second largest buyer of Russian gas in
the EU) and as a source of Western technology. Russians strongly appreciates typical ‘Made
in Italy’ products and design, ranging from the clothing industry to furniture and food. The
growing flows of Russian tourists to Italy have sustained these market preferences by
introducing millions of Russians directly to Italian lifestyle and consumer goods.105
The main challenges to economic relations between Italy and Russia stem from the policy of
sanctions and countersanctions that began after Russia’s annexation of Crimea, as well as the
excessive dependence of the Russian economy on the revenues from energy exports. The
European sanctions limit industrial cooperation in some strategic sectors, such as Arctic, deep
105
For data and an analysis of Russian tourism in Italy, see Info Mercati Esteri Russia, 2017, pp. 39-40.
43
water and shale oil technology, or dual use goods. Moreover, the United States’ threat of
imposing extraterritorial sanctions on companies involved in strategic energy projects with
Russian counterparts increases uncertainty and risks. Western restrictive measures are
compounded by Russian countermeasures, which target some food and agricultural products
in particular. In sectors not affected by sanctions, market trends in Russia continue to be
influenced by revenues from energy exports, which determine the country’s general
economic performance. In 2014-6, a lower oil price and the ensuing devaluation of the rouble
weakened the purchasing power of the Russian middle class, and hence demand of foreign
goods in many sectors.
After 2016, Russia’s economy recovered, as did trade with Italy and most other countries.
Moreover, despite current political divergences, Russia’s economic performance continues to
be affected by that of the European Union, which is by far Moscow’s largest trade partner. If
the EU’s economy performs well, European demand for Russian energy tends to increase, and
so do Russian revenues. The diversification of the Russian economy through an ‘Eastern
pivot’, notably closer ties with China and Far Eastern market, is still an ongoing endeavour. In
this regard, Russia’s current efforts to strengthen its economy and infrastructure in the Far
East provides new opportunities for foreign companies there, also thanks to the proximity of
large markets such as China, Japan and South Korea.
Despite the sanctions and international tensions, the current political and economic context
has also opened up new possibilities for industrial cooperation with Russia. The Russian
government’s policy to support import substitution and localise production creates stronger
incentives for foreign companies to build an industrial base and start producing in Russia.
There are several reasons why this can make economic sense for foreign actors. The low cost
of energy and the local availability of skilled labour are two important factors. Hence, local
production of energy-intensive goods, or of goods that are subject to high customs duties and
transportation costs (if imported), may be more profitable. The advantageous fiscal regimes
in Russia’s new Special Economic Zones provide another incentive. Through the SEZs, the
government is both encouraging domestic production and the creation of new industrial
areas in the Russian regions. These efforts at de-centralising the economy (away from the
largest urban centres, such as Moscow and Saint Petersburg) are accompanied by
infrastructural projects to improve interconnections of the SEZs with the Russian and
44
international markets. Another advantage of localising production in Russia is easier access
to the markets of other Eurasian Economic Union members (Belarus, Kazakhstan, Armenia
and Kyrgyzstan).
For Italian companies, the best prospects stem from preserving their strategic presence in
long-standing fields of cooperation, such as the energy sector, while simultaneously ensuring
that their activities do not breach the restrictions introduced by EU sanctions. Russia will
continue to require Western technology and investments for the implementation of energy
projects. In the energy sector, efforts should no longer concentrate solely on fossil fuels.
Particularly in the light of the EU’s climate goals and the Paris climate agreement, companies
should invest more in the renewable energy sector, which has huge potential in Russia. ENEL’s
recent contracts for the construction of wind farms in the Rostov and Murmansk regions
demonstrates this, and could pave the way for a new, more environment-friendly type of
Italian-Russian energy cooperation.
As previously argued, foreign companies that want to retain or boost their shares in the
Russian market should strengthen their production capacity in Russia, rather than simply rely
on exports. This is particularly urgent in (counter-) sanctioned sectors, such as the food
industry, where import substitution may erode market shares. Furthermore, good prospects
exist in the development of the pharmaceutical industry, which the Russian government has
identified as a priority. A relevant cluster has been created in the Saint Petersburg region,
which is closely linked to local research institutes and know-how. The health care sector is
also likely to expand in the future due to the overall ageing of the Russian population.
The shipbuilding industry may also offer interesting opportunities for industrial cooperation
in Russia. The Russian government has planned considerable spending for the modernisation
of both its military and civilian shipping. While the military sector is bound to be highly
controversial for countries that have adopted sanctions against Russia, the civilian sector
appears more promising. Foreign involvement in this sector could take place through
cooperation with the state-owned United Shipbuilding Corporation (or OSK), which is by far
the main actor and owns the largest shipyards. Also in this sector – as in other
underdeveloped fields of the Russia economy, such as the agri-food, manufacturing and
45
mechanical industry – Russian actors are likely to be interested in foreign technology and
machinery.106
Despite the sanctions and the current political crisis between Russia and the West, it is likely
that Italian economic involvement in Russia will remain significant. Significantly, in 2020 Italy
will be ‘country partner’ at the Innoprom International Industrial Fair in Ekaterinburg, thereby
becoming the first EU member state to enjoy this status (Innoprom is the main industrial,
trade and export platform in Russia). As shown, bilateral cooperation has a long history and
survived ideological differences and deep political crises, particularly during the Cold War.
Both Italian diplomacy and external economic projection have a tradition of pursuing
cooperation outside Italy’s main economic and security alliances, while at the same time
remaining firmly anchored to those alliances. As the world becomes more multipolar and the
relative economic weight of the West decreases, we can expect Italy to keep this posture, and
even develop additional links with the main non-Western economic and security actors, such
as Russia and China. While Italy cultivates its alliance with the United States, Italian politicians
generally believe that the country has the sovereign right to engage with other actors and
pursue its interests on a global scale. The partnership with the United States has endured for
over seventy years because US leaders have so far understood and generally accepted the
Italian posture.
The transition to a digital economy can also offer new avenues for Italian-Russian
cooperation. So far, cooperation in this area has been limited, also due to Italy’s and Russia’s
delays in developing their digital economy. It is expected that digital cooperation will develop
as an offshoot of traditional sectors of Italy-Russia interaction, such as energy, which are
increasingly digitised. ENEL’s launch of an innovation hub at the Skolkovo Innovation Centre
is a relevant example. Moreover, digital cooperation could develop in new areas. The
participation of more than 30 Italian start-ups in the 2018 Startup Village of the Skolkovo
Centre – one of the largest foreign representations – was a positive signal in this respect.
106
Cf. Info Mercati Esteri Russia, 2017, pp. 3-4.
46
Table 3. Strengths, weaknesses, opportunities and risks of Italy’s industrial cooperation
with Russia
Strengths




Weaknesses
Complementarity of the Russian and
Italian economies
Long-term partnerships in the energy
sector, aeronautics, car industry
Strong Russian demand for ‘Made in
Italy’ products
Consolidated presence of Italian
financial institutes in Russia that
encourage and support bilateral
economic relations



Opportunities







Bureaucratic hurdles
Corruption
Dependence of the Russian economy
on hydrocarbon exports
Risks
Low cost of energy in Russia
Large hydrocarbon resources and
potential for renewable energy
production
Reduced taxation in Russia’s Special
Economic Zones
Public investments in sectors such as
the pharmaceutical and shipbuilding
industry
Replacing ‘Made in Italy’ products
with ‘Made in Russia with Italy’
goods
Russian demand for Western
technology and machinery
Potential cooperation in the digital
economy
47


Western sectoral and financial
sanction, and possibility of additional
sanctions
Volatility of the rouble in the recent
past
Further Reading
Alcaro, Riccardo, Germany’s Ostpolitik. An Italian perspective, IAI Working Paper no. 17/22.
Rome: IAI, April 2017. http://www.iai.it/en/pubblicazioni/germanys-ostpolitik-italianperspective
Alcaro, Riccardo, ‘Italy’, in M. David, J. Gower and H. Haukkala (eds.), National Perspectives
on Russia: European Foreign Policy in the Making? Abingdon: Routledge, 2013.
Ambasciata
d’Italia
in
Russia,
Info
Mercati
Esteri
http://www.infomercatiesteri.it/public/rapporti/r_88_russia.pdf
Russia,
2017.
Arbatova, Nadezhda, Italy: Russia’s voice in Europe? Paris: Institut Français des Relations
Internationales, 2011.
Deloitte CIS Research Centre, Russia and Italy: Doing Business Together, 2017.
https://www2.deloitte.com/content/dam/Deloitte/ru/Documents/research-center/russiaand-italy-doing-business-together.pdf
De Maio, Giovanna and Nicolò Sartori, Le Relazioni tra Italia e Russia, Osservatorio di Politica
Internazionale,
Approfondimento
144,
November
2018.
https://www.iai.it/sites/default/files/pi_a_0144.pdf
Fava, Valentina, ‘Between Business Interests and Ideological Marketing: The USSR and the
Cold War in Fiat Corporate Strategy, 1957–1972’, Journal of Cold War Studies 20(4), Fall 2018,
pp. 26–64, doi:10.1162/jcws_a_00822.
Giusti, Serena, ‘Le relazioni Italia-Russia: una partnership strategica, in G. Bonvicini and A.
Colombo (eds.), La politica estera dell’Italia. Bologna: Il Mulino, 2009.
Prontera, Andrea, ‘Forms of state and the politics of producer-consumer cooperation: Italy,
Russia and the great reconfiguration in East-West energy relations’. Paper presented at the
Aleksanteri Institute, Helsinki, 2018.
Siddi, Marco, ‘Italy-Russia relations: energy, politics and other business’, in Z. Ludvig, East
European Studies 4. Eurasian Challenges: Partnerships with Russia and other issues of the
post-Soviet area. Budapest: Institute of World Economics of the Hungarian Academy of
Sciences, 2012.
Siddi, Marco, ‘Italy’, in EU member states and Russia: national and European debates in an
evolving international environment, FIIA Report 53. Helsinki: Finnish Institute of International
Affairs, 2018.
Siddi, Marco, ‘Italy’s ‘Middle Power’ Approach to Russia’, The International Spectator, 15
October 2018, https://www.tandfonline.com/doi/full/10.1080/03932729.2018.1519765.
48
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