After the recent EU summit, Italy stood up against the idea of new Russia sanctions. Yet, at the same time, the country also hopes to play a more active role within NATO.

Italian Prime Minister Matteo Renzi. Photo: TASS

Two events in mid-October epitomized Italy’s foreign policy in Eastern Europe. They show that, while Rome is attempting to gain favor with Western international organizations, it is also taking steps not to offend Russia.

On Oct. 14, the Italian government announced that, over the next months, it would contribute 140 soldiers to a NATO force under Canadian leadership in Latvia. A week later, during a European Council summit, Italian Prime Minister Matteo Renzi took the lead of a group of countries opposing a proposal to sanction Russia for its actions in Syria.

Both moves caused controversy in Italy and abroad, and yet they illustrate two key Italian foreign policy goals: playing an active role within NATO while promoting dialogue with Russia and preventing the further deterioration of relations between Moscow and the West.

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Troops in the Baltics

The decision to send troops to Latvia aroused a heated debate in Italy. This was partly due to how the news reached the Italian public: NATO Secretary General Jens Stoltenberg announced it in an interview with the Italian daily La Stampa. The Italian government confirmed the news a few hours later, specifying that it was complying with a NATO request to provide reassurance to the Baltic States, and that Italy continued to support dialogue with Russia. This did not prevent criticism from the political opposition, which blamed the government for not having debated the issue in parliament earlier and for contributing to the escalation of tensions with Moscow.

It was largely expected that this decision would prove to be controversial domestically. Deploying troops to the Baltic is hardly in Italy’s immediate strategic interests. Italy is facing an increasingly unstable neighborhood to its South, as well as the brunt of the refugee crisis – where solidarity from most Western partners has been lacking. In the past months, Rome tried to involve Moscow in the negotiations concerning Libya, in the hope that Russia would use its leverage (directly or via Egypt) to help end the conflict there.

In this context, confrontation with Russia is a further irritant. Nonetheless, the Italian government accepted participation in the NATO mission in the Baltic States, probably in the hope that this would enhance its profile within the Atlantic alliance.

Italy’s “no” to new Russia sanctions

Yet, Rome’s reluctance to step up confrontation with Moscow emerged clearly at the European Council summit on Oct. 20-21. At the summit, the leaders of Germany, France and the United Kingdom tabled a draft communiqué condemning the attacks of the Syrian and Russian air forces on Aleppo, where over 250,000 civilians are trapped. The draft stated that the EU would consider all options, “including further restrictive measures” against the Syrian regime and its supporters (namely Russia) “should the current atrocities continue.”

Eventually, the reference to new sanctions was dropped from the final communiqué due to the opposition of several countries, reportedly including Italy, Spain, Greece, Austria and Cyprus. Italy came out as the most outspoken member of this group, as Renzi publicly stated that new sanctions would make no sense and would not help solve the crisis.

Why is Italy opposed to new Russian sanctions?

Besides the publicly declared reasons, Italy’s stance is motivated by strategic and economic calculations. Strategically, Italy is not keen on extending the EU-Russia confrontation and the policy of sanctions to Mediterranean issues. Rome sees Moscow as an increasingly important player in the Middle Eat North Africa (MENA) region. In recent years, Russia has intensified its cooperation with several North African states and developed solid relations with key regional actors such as Egypt and Algeria. Most notably, it signed a $3.5 billion arms deal with Egypt in 2014 and strengthened its political relationship with Cairo in the following months.

Russia’s direct intervention in the Syrian civil war and its growing military presence in the Mediterranean reinforced Italian views that Moscow needs to be taken into account when dealing with issues in the region. This was the logic behind the Italian eagerness to have Russian Foreign Minister Sergei Lavrov participate in the international talks on Libya in Rome in December 2015.

The other reason for Italy’s opposition to further sanctions against Russia is economic. Before the Ukraine crisis, trade between Italy and Russia had peaked at over $34 billion in 2013. Over 500 Italian companies operate in Russia; the energy company ENEL and the aerospace, defense and security company Finmeccanica have made large investments in the country. Russia supplies about 30 percent of Italy’s gas and 15 percent of its oil. A long-standing partnership exists between the energy companies ENI and Gazprom, which was to be further developed through the construction of the South Stream pipeline.

With the imposition of EU sanctions on Russia, Russian countersanctions and the economic crisis in Russia, Italy lost one of its growing export markets. Between 2013 and 2015, Italian exports to Russia fell by 34 percent. Moreover, the cancellation of the South Stream project in December 2014 negatively affected the partnership between ENI and Gazprom. For Italy, the significance of these losses has to be gauged against its precarious economic situation: the country has experienced recession or sluggish growth since the 2008 crisis.

During 2016, Italian businesses and part of the national political landscape were increasingly dissatisfied with the extension of sanctions against Russia and hoped they would be scaled back in the course of the year. Political developments – notably the continued standoff in Ukraine and the military escalation in Syria – prevented this. Nevertheless, Italian businesses still hope that relations with Russia will be restored in the near future. In the aftermath of the last European Council, Finmeccanica CEO Mauro Moretti welcomed Renzi’s rejection of new sanctions.

Despite considerable domestic pressure to normalize relations with Russia, it now appears improbable that Italy will break ranks with its European and NATO partners. Most likely, Rome will continue to use its leverage within both the EU and NATO to foster dialogue with Moscow, promote its strategic interests and prevent the further deterioration of West-Russia relations.

The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.