Italy’s Eurosceptic government has extended an olive branch to Russia that will likely put it again at odds with their partners in the European Union after Italian Prime Minister Giuseppe Conte dangled the prospect of an Italian veto on any new EU sanctions against Moscow.
Conte described Russia as Italy’s “strategic partner” and spoke of “the magnificent state of our bilateral relations”, shortly after inviting Vladimir Putin to Italy on what would be the autocratic Russian leader’s first state visit to an EU Member State since war broke out in eastern Ukraine where Russian troops and local pro-Moscow Ukrainian separatists have attempted to set up a puppet state that is wholly subservient to the Kremlin.
“I would very much like you to visit Italy in the near future … I wouldn’t like the Italian people to get the impression that you don’t pay proper attention to them,” a beaming Conte said while addressing Putin.
Conte told the group of Russian and foreign journalists that had gathered in the Kremlin for a meeting of prominent Italian businessmen and a video-linked opening ceremony of an electrical plant in the Urals region city of Chelyabinsk that Italy would likely veto EU economic sanctions on Russia when they come up for renewal in December.
Russia has been subjected to European Union sanctions since the 2014 Ukraine crisis, but the new government in Rome, which is considered to be decidedly pro-Russian due to the warm relations that deputy prime ministers Matteo Salvini and Luigi Di Maio cultivated with the Kremlin before forming a government earlier this year. The two, along with Conte, have long urged a relaxation of the penalties on the grounds that they have hit Italian that trade with Moscow, one of Italy’s largest export markets for luxury goods and food items.
Salvini opposes Italy’s membership in NATO, has visited Moscow on numerous occasions over the last several years since the Ukraine war began and has been photographed wearing t-shirts with Putin’s face emblazoned on the front while regularly praises the Russian leader. He campaigned on a promise to push the EU hard on lifting the sanctions without Russia having to abide by any preconditions for their removal.
Bilateral trade between Italy and Russia reached €21.1 billion in 2017, despite the sanctions, but that total is less than half the nearly €47.5 billion in 2013, the year before the EU’s sanctions took effect. At the same time, more than 500 Italian companies have opted to break with their European partners and have recently invested €4.3 billion into energy, transport, high tech, and food industry projects in Russia.
“We are ready to support the Italian companies that intend to develop cooperation with Russian partners,” Conte said. “It’s our duty to strengthen industrial cooperation with Russia.”
Under the current sanctions, European businesses are barred from doing business with Russia’s banking, financial, and energy sectors. Led by Germany and France, the majority of European politicians in Brussels are eager to renew the sanctions until Russia complies with the 2015 Minsk Agreement that was intended to halt the fighting in eastern Ukraine, while Moscow withdrew its troops and weapons back across the Russian-Ukrainian border.
The conflict remains ongoing, killing 10,500 people in the four and half years since it began.
Conte endorsed the full implementation of the Minsk ceasefire agreement but appeared to break with the rest of his EU colleagues on the key point that the sanctions would only be lifted if Russia ended its military operations in Ukraine.
“For Italy, sanctions are never an end, they are an instrument that must be overcome as soon as possible…“Italy would like to persuade other European countries that the only way forward is through dialogue,” said Conte during a joint press conference with Putin, adding, “We must overcome this stage. It has lasted too long … Italy is very ambitious. She would like to convince all other partners that dialogue is the best way to reach a solution”.
The high-level meeting between the two leaders comes at a time when Italy is locked in a bitter battle with the European Union over its draft budget proposal for 2019, which the European Commission has rejected as it violates the EU’s strict deficit rules.
Conte is thought to have travelled to Moscow in an attempt to shore up financial support for what the Italian government expects could be a protracted fight with Brussels over the fiscal policies of Italy’s anti-EU coalition government led by Salvini’s right-wing Lega (League) and Di Maio’s left-wing 5-Star Alliance.
The global financial markets have been less-than-enthusiastic in their reaction to the Italian government’s plan for massive deficit spending over the next year. Investors fear that Italy, the third largest economy in the EU, will be unable to sustain the country’s mountain of debt – which is the second highest in Europe – under the rejected draft proposal.
Despite the speculation about the timing of his visit, Conte denied that he was in Russia with the intention of asking Putin to buy Italian bonds as a way to reassure the markets and to guarantee that his government has the means to pursue their policy goals.
“I did not come here to ask Putin to buy Italian securities through the sovereign fund. If a sovereign fund or the central bank were to make such a decision, they would do so because it is convenient, and a good deal,” said Conte.