Italy and Russia to Expand Bilateral Cooperation

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Oct. 27 – In spite of its own economic problems, Italy has managed to become Russia’s second largest trade partner in Europe after Germany. Trade turnover between the two states reached US$37.3 billion in 2010, according to the Russian Customs Service, representing a respectable recovery after trade turnover dropped to US$25 billion in 2009 after the Global Financial Crisis.

The two countries’ economic cooperation began when the Italian carmaker Fiat helped to set up Russia’s first car manufacturer AvtoVAZ, which produced Ladas based on a Fiat design.

Shortly after the beginning of cooperation, the town where AvtoVAZ is located was renamed in honor of the Italian communist Palmiro Togliatti after his death in 1964. Today, AvtoVAZ is still producing Lada cars in Togliatti, located 798 kilometers to the east from Moscow.

“Italy traditionally has a strong presence in Russia, historically since the 1960s,” Leonardo Bencini, counselor of the Italian Embassy in Moscow said at an event within the frame of the Year of Italy in Russia. “We have always been present in Russia in many sectors since then.”

Fiat’s success in the then-Soviet Union explains why the Italian Chamber of Commerce is one of the oldest of its type in Russia at 47 years old this year.

Another area where Italian technology is being welcomed by Russia is in the energy field with Enel and Eni, two energy giants that have big investments in Russia. Italy and Russia signed a memorandum on working together on energy efficiency and renewable resources in 2009.

Enel, the second-largest electricity operator in Europe, has a controlling stake in Russian power Generation Company OGK-5, which was one of the first companies to attract private investment.

Earlier this year, the company announced that it would invest US$1.4 billion over the next four years in the Russian market. “The Russian economy is expected to continue to grow, and its market fundamentals look promising,” Enel said in a statement. “That is why Enel will strengthen its strategic role in the country.”

Enel will be involved in domestic nuclear industry development and may become the very first foreign co owner of the country nuclear plant, which is planned to be constructed in Russian European enclave near the city of Kaliningrad.

Last year, President Dmitry Medvedev noted the role Italian companies play in modernizing Russia. “It is particularly important for us that Italian companies take part in high-tech spheres of the Russian economy.”

Apart from the nuclear plant construction, Italians are involved in one of the most high-tech cooperation’s with Russians: a nuclear fusion experiment called “Ignitor,” the research which will “open up a future of nuclear energy,” according to Giovanni Iannuzzi, deputy head of the mission at the Italian Embassy.

The project involves, among others, the Italian National Agency for New Technologies, the Russian Academy of Science and the Kurchatov Institute.

“We can cooperate with Russia. They want to make progress, and we have the know-how,” Bencini said.

“We are expecting as a result a dynamic growth of bilateral cooperation: As for economic cooperation, we not only expect to widen partnerships for major companies already operating in Russia and to foster trade, but we also aim to strengthen cooperation in the strategic sectors related to modernization and new technologies,” Giuliano Urbani, Italian governmental coordinator for Italy-Russia Year said in an interview with Russian press.

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