Italy eyes Russian cash to boost economy

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Russian President Vladimir Putin and Italy's Prime Minister Enrico Letta are expected to unveil a €1 billion joint investment fund on Tuesday. Photo:Alexander Nemenov/AFP
10:34 CET+01:00
Italy will be eyeing Russian cash for its crisis-hit economy as President Vladimir Putin and Prime Minister Enrico Letta hold a meeting on Tuesday where they will unveil a €1 billion joint investment fund.

Italian officials said they will test Russian interest in troubled flag carrier Alitalia, which is looking for a foreign partner, and Ilva, a giant steel plant that has been partly shut down over environmental concerns.

"Some 20 business deals will be signed in three main sectors: finance, energy and industry," an adviser to the Italian prime minister's office said ahead of the bilateral meeting in Trieste in northeast Italy.

Russian officials said that the new fund - financed by the Russian Direct Investment Fund and Italy's Deposits and Loans Fund - "will stimulate mutual investments" and is set to make its first payments next year.

Italy's La Stampa daily said Putin had brought his "petrorubles to seduce Rome", while former premier Romano Prodi - who also met with Putin - said ties between Italy and Russia "have never been so intense".

The Putin-Letta meeting was due to start at 10:30 GMT, to be followed by a press conference at 14:15 GMT.

The talks come on the final leg of Putin's two-day trip to Italy, which has included an audience with Pope Francis and a dinner with scandal-tainted former prime minister and old friend Silvio Berlusconi on Monday.

Activists said they will hold a protest against homophobia in Russia, following a small rally for the jailed Russian punk group Pussy Riot in Rome.

Berlusconi and the Kremlin were also forced to deny rumours that Putin was preparing to offer the media tycoon Russian papers to flee legal troubles that are set to get him expelled from parliament on Wednesday.

Italian media said energy giants Eni and Enel at the talks would also be looking to lower the prices for imports from Russia, as Italians struggle to make ends meet amid the country's longest post-war recession.

Business daily Il Sole 24 Ore said one of the deals due to be signed would boost the stake of Italian oil services company Saipem in the South Stream pipeline project from Russia to Turkey under the Black Sea.

Another agreement - the first of its kind for a European Union country - would give Italian companies preferential customs treatment in Russia, it said.

The report also said Italy and Russia would launch a new e-commerce platform to sell Italian products in Russia and Italian shipbuilder Fincantieri would sign a deal to build ships for the offshore oil industry.

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Trade turnover between Italy and Russia stood at €33.8 billion in 2012 and has increased by 24 percent between January and September compared to the same period last year, Russian officials said.

A Kremlin official said the two leaders would also touch on international issues and "above all the situation in Syria", a day after negotiators announced Syria peace talks would be held in Geneva in January.

There will also be agreements in the cultural sphere, including one to set up a branch of Russia's famous Hermitage Museum in Venice on St Mark's Square.

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