Italy has a reason to be extra concerned about the Russian war in Ukraine, and that reason is called gas. Rome imports 45 percent of its gas from Russia, but that percentage is not everything. Gas imports weigh more heavily in the Italian energy mix than in other European countries. That makes Italy more dependent on gas from Russia than, for example, Germany, even though it imports 55 percent of Russian gas. According to research by the Institute of International Political Studies (ISPI), no major European Member State is as vulnerable as Italy. Unlike France, which also relies heavily on nuclear energy, Italy has not had its own nuclear power stations for years. “And Spain has moved on with renewable energy,” said Eleonora Tafuro Ambrosetti, Russia researcher at ISPI.
That energy transition also threatens to be slowed down in Italy if the country keeps the seven coal-fired power stations that would close by 2025 open longer. Prime Minister Mario Draghi called that Friday as a temporary solution to deal with the consequences of the Russian war in Ukraine. The Italian government is also considering other options, such as buying more gas from its other suppliers, such as the US, Azerbaijan or Algeria.
The Italian prime minister acknowledged that he fears the consequences of sanctions against Russia for his own economy. Even before the Russian invasion of Ukraine, energy prices rose sharply this winter in Italy, where, according to financial news agency Bloomberg, the government has already allocated about 16 billion euros to soften price increases for Italian companies and households. Just recently, truck drivers in Italy put up a roadblock against high fuel prices, and Russia hadn’t even invaded Ukraine yet.
Pasta and bread
Italy is not only concerned about gas supplies and rising energy prices. The country also imports a lot of grain from Ukraine. As a result, not only pasta and bread are in danger of becoming more expensive, but other foodstuffs may also cost a lot more due to the higher fuel prices.
After two years of pandemic, Italy, the eurozone’s third largest economy, is only just clambering out of the corona recession. That is also why rising energy prices are a cause for concern, says Italian researcher Giovanna De Maio, of George Washington University, on the phone. “The fear is that the price increases threaten to flatten the cautious economic recovery in Italy.” Italy may have been doing better recently, but the situation remains precarious. National debt is still dangling around 150 percentand Italy remains vulnerable to inflation.
As for Russia, the business ties extend well beyond gas
Moreover, since the beginning of the crisis over Ukraine, Italy has found itself in a strange kind of split. Russian gas supplies are extremely important to Italy. At the same time, the country will rely very heavily on Europe in the coming years, as one of the main beneficiaries of the European recovery fund after the pandemic. Because the Italian economy was hit so extremely hard, Rome decided to withdraw all available grants and loans from that recovery fund. In total, this will amount to 205 billion euros in the coming years.
As for Russia, the business ties extend well beyond gas. Many private Italian companies also have large business interests in Russia, says Russia researcher Eleonora Tafuro: “Tire specialist Pirelli has two factories there, and many SMEs from the northern regions of Veneto and Lombardy export machines to Russia.”
Food, furniture and fashion are also important Italian export products, but that export was already hit after the Russian annexation of Crimea in 2014. In the case of food this was due to Russian counter-sanctions, for fashion and furniture it had more to do with lower demand, due to the shrinking purchasing power of the Russian middle class.
Sympathy from left and right
Historically, too, there is an emotional bond between Russia and Italy. Until 1991, Italy had the largest communist party in the West. Some of the Italians on the left continued to see Russia as the heir to the former Soviet Union, and as an alternative to the hegemony of the United States. But Russia has also recently been able to count on sympathy from the right in Italy, such as the radical right-wing populist Matteo Salvini, the leader of the Lega party, who is in Draghi’s government. In the past, Salvini certainly did not hide his admiration for Vladimir Putin. But “whoever fires missiles is wrong,” Salvini says now.
But despite pro-Russian sympathies in parties like Lega and, if less pronounced, in the anti-establishment movement Five Stars, Italy has never isolated itself on Russia in the past. Also with the Lega in government, Italy always voted in favor of extending sanctions against Russia after the annexation of Crimea, Tafuro emphasizes: “An Italian politician once told me: the narrative changes with who is in the government, but government policy does not change.”
Certainly in this extreme situation, in which Putin has militarily invaded another sovereign country, there is no question that Italy is positioning itself closely on the lines of the EU and NATO. Although Italy, like Germany, among others, was first on the brakes to use the Swift weapon against Russia, Rome eventually agreed. Italy also emphasized that it had tried to obtain “no exception” in the Western sanctions. Presumably that was in response to an unsubstantiated rumor spread by the British newspaper The Telegraphthat Italy had tried to keep its luxury goods out of sanctions.
A version of this article also appeared in NRC on the morning of March 1, 2022