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Economic ties between Russia and Italy are growing stronger as bilateral trade reached an unprecedented 21 billion euros last year
Economic ties between Russia and Italy are growing stronger as bilateral trade reached an unprecedented 21 billion euros last year, the Italian premier said in an interview ahead of the Russian leader's visit. President Vladimir Putin will begin a two-day visit to Italy Tuesday against the backdrop of intensive economic ties with the country, Russia's second trade partner in the European Union (EU). "Trade hit a record of 21 billion euros, and Italian exports to Russia increased [25.7%] to make it Italy's top non-EU trading partner," said Romano Prodi, whose center-left Cabinet had to resign briefly last month over a disagreement with parliament on the country's military presence in Afghanistan. But the vote of confidence allowed the Prodi government to return to power. Putin and Prodi last met in late January in Russia's Black Sea resort of Sochi to discuss energy cooperation, bilateral trade and mutual investment. Business ties between the two nations have recently consolidated, particularly in such sectors as energy, the automotive industry, aircraft building and banking. Bilateral energy cooperation projects include a consortium of Russian utility company ESN and Italy's ENEL power supplier, which jointly manage Russia's North-West thermal power plant. ENEL plans to join the privatization of Russia's electric power sector, Prodi said. "ENEL, which is present on the Russian market as part of the Rusenergosbyt partnership and the North-Western thermo-power plant, has just formulated a proposal to take part in the privatization of the Russian electric power sector," Prodi said. He said ENEL would sign a memorandum on cooperation with the Russian Nuclear Power Agency (Rosatom), including in third countries, during Putin's visit. Another Russian energy company, Gazprom [RTS: GAZP], and Italy's ENI signed a strategic partnership agreement last November "which enables the Russian company to sell gas on the Italian market and the Italian company to join the development of Russian mineral deposits," Prodi said. ENI is a member of the Caspian Pipeline Consortium, which also includes such Russian, Kazakh and global companies as Chevron, LUKoil, ExxonMobil, BP, Rosneft, Shell, BG and Gazmunaigaz. The pipeline pumps oil from western Kazakhstan to the Russian port of Novorossiisk, on the Black Sea. Russia, which supplies more than a quarter of the EU's oil and gas, has been proactively trying to promote itself as a reliable energy partner since energy disputes with transit nations, Belarus and Ukraine, led to suspension in Russian crude supplies to EU nations in 2006 and 2007. In the automotive industry, Prodi also spoke of resumed cooperation between Italian automaker FIAT and Russia's Severstal [RTS: CHMF] steelmaker in Russia. High-tech cooperation between the two countries involves a crucial deal between Alenia Aeronautica, part of Italy's electronics-making company Finmeccanica, and Russia's Sukhoi fighter jet maker on the production of Superjet-100, designed to replace Russia's ageing Tu-154 and Tu-134 models. The aircraft are expected to enter service after 2012. Another promising area of economic partnership is the banking sector, the Italian premier said, adding that consolidation of Italian groups would help increase the presence of leading financial and credit institutions Intesa-San Paolo and Unicredit on the Russian market. The past two years have seen the launch of several joint Russian-Italian investment projects. Russia's Severstal acquired a controlling stake in Italian metals giant Lucchini in the spring of 2005. In the summer of that year, Russia's Evraz Group bought 75% in the Italian sheet metal producer Palini e Bartoli. In February 2006, AFK Sistema signed an agreement on the purchase of shares in Finmeccanica. Global politics Apart from trade and the economy, the two nations cooperate within international organizations and have similar views on the situation in Iraq, Iran and Afghanistan. Italy became a non-permanent member of the UN Security Council at the beginning of the year, which provides additional opportunities for political cooperation with Russia, one of the five permanent members on the council. Italy is also a NATO member, while Russia is a proactive participant in such regional security organizations as the Collective Security Treaty Organization and the Shanghai Cooperation Organization. As for regional conflicts, Italy has maintained a military presence in Afghanistan as part of the NATO-led peacekeeping operation. Prodi and his government had to resign briefly last month after parliament refused to support their plans to keep the 2,000-strong contingent in the Central Asian country. Russia's relations with Afghanistan have involved weapons supplies worth $200 million in 2002-05. Afghanistan has also expressed its willingness to cooperate with the Russia-dominated Collective Security Treaty Organization and the Shanghai Cooperation Organization. Another sensitive international issue is Iran's controversial nuclear program. Italy, Iran's main trading partner in Europe, has applied sanctions introduced by the UN Security Council in December over the Islamic Republic's failure to give up its disputed nuclear program. Russia, also a key economic partner of Iran, has consistently supported the country's right to nuclear power under the Nuclear Non-Proliferation Treaty (NPT), and has resisted any harsh sanctions. Iran's neighbor, Iraq, has been a serious international concern after the U.S.-led invasion. Italy's previous government of Silvio Berlusconi sent troops to the war-torn country, but the Prodi government withdrew the 3,200-strong contingent in late 2006. Moscow has been pushing for a comprehensive settlement in Iraq only on the basis of a broad consensus in Iraqi society, which has been devastated by sectarian clashes. In conclusion, the Italian premier praised common foreign policy goals between him and President Putin, and pledged to promote Russia's partnership with the European Union. "The Russian president and I share the aspiration to establish solid ties between Rome and Moscow, and between Russia and Europe," Prodi said. During his visit, Putin will meet with Pope Benedict XVI March 13. The meeting is expected to help promote long-awaited contacts between the Catholic and Orthodox Churches, which have been strained over the Russian Orthodox Church accusing the Vatican of proselytism.
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