VZCZCXRO8610
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV
DE RUEHMO #1273/01 1400530
ZNY SSSSS ZZH
P 200530Z MAY 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 3335
INFO RUCNCIS/CIS COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

S E C R E T SECTION 01 OF 02 MOSCOW 001273 
NOFORN 
SIPDIS 

DEPT FOR INR/I 

EO 12958 DECL: 05/19/2019 
TAGS PREL, PGOV, ENRG, EPET, IT, RS 
SUBJECT: ITALIAN-RUSSIAN RELATIONS (C-RE8-02675) 

REF: A. 08 STATE 134386  
¶B. MOSCOW 572

Classified By: DCM Eric Rubin for reasons 1.4 (b) and (d).

Summary
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¶1. (S/NF) Economic ties, especially long-term gas contracts, are a pillar of Russia-Italy relations and affect Italy’s policies toward Russia. Italian gas company ENI and Russian Gazprom have supply commitments in place until 2035, as well as a joint-construction agreement for the South Stream pipeline. ENI’s company representative is often called Italy’s second ambassador to Russia. The personal relationship between Prime Ministers Vladimir Putin and Silvio Berlusconi is the other key element of Russia-Italy relations, with Putin’s family spending long visits at the Berlusconi family mansion in Sardinia at Berlusconi’s expense. Italian diplomats enjoy excellent access to Russian officials. Should Italy stop seeking to moderate European states’ Russian policies, the GOR would likely need to alter its political calculus. End Summary.

Economics affects politics
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¶2. (C) Russia obtains significant economic benefits from Italy, gaining access to its equipment and technology, its stable market for gas and oil, and its highly desired consumer goods. In return, Russia provides Italy good offices for access to Central Asian supplies of gas and consumer markets. Italian companies have also looked to invest in Russia’s aviation sector and electricity generation, although the economic crisis put many of these efforts on hold.

¶3. (C) However, the economic interdependency does not come without other costs. Italian Embassy First Secretary Lorenzo Fanara told us that the countries’ economic ties were strong enough to affect Italy’s political stance toward Russia. He said Italian leaders, politicians, and businessmen would always be “careful” in dealing with Russia, as Italy exported to Russia over 10 billion Euros worth of goods annually, most of it produced by small and medium-sized companies. “Russia is simply too important of an economic partner for us,” Fanara explained. While the GOI understood the shortcomings of the Russian government (read: adherence to democratic values and freedoms), it could not afford to be too harsh in its criticism.

Deep ties on gas
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¶4. (C) The crown jewels of Italy’s business interests with Russia are ENI’s gas contracts with Gazprom through 2035 and its 50-50 partnership with Gazprom in the South Stream pipeline project. The mo~97@Q5OQg