More and more EU members are beginning to realize how harmful anti-Russia sanctions are to their own economies
This article originally appeared at Deutsche Wirtschafts Nachrichten. Translated for RI by Kristina Aleshnikova
Italian exports to Russia decreased by $1.2 bn between 2013 and 2014. Prime Minister Matteo Renzi wants to stop this trend and sidestep Russian sanctions. Because the country is in an economic crisis and Renzi is fighting for his political survival.
Italy is Russia’s 2nd largest business partner in the EU and its 4th largest world-wide. Therefore Italy is one of those countries which is suffering most from the sanctions against Russia. According to the Economist the automobile manufacturer Fiat and a further 500 Italian companies are active in the Russian market. Italy imports 15% of its oil needs and 30% of its gas needs from Russia. Further, Russians are enthusiastic buyers of Italian luxury goods and the number of Russian tourists in Italy has almost doubled from 2008 to 2013.
Italian exports have dropped from $10 bn in 2013 to $8.8 bn in 2014 as a result of the economic consequences of sanctions against Russia. The Italian leather goods manufacturer Piquadro, who own more than 10 stores in Russia, reports a drop in revenue for 2014 of 40% in comparison to the previous year. The fashion company Roberto Cavalli is expecting exports to Russia to decline this year by 20% compared to last year.
All this is bad news for the Italian Prime Minister Matteo Renzi as his country is already in a deep economic crisis, which also holds political risks. The Lega Nord, which strongly criticised the Russian sanctions, is gaining support. If Renzi wants to survive politically, he cannot afford to embark on a collision course with Russia.
During his visit to Moscow in early March Renzi diverged noticeably from the West’s hard line against Russia. The Italian Prime Minister invited Kremlin leader Putin to open Russia Day at the Expo in Milan on June 10th. Putin said that Russia would like to work more closely with Italy in the, “energy sector, mechanical engineering and nuclear industries”