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31. The US–Italy Economic Relations in a Divided World

Author:
Adriana Castagnoli
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
In 2021, bilateral trade returned to the sustained pace it had prior to the Covid pandemic. Direct investment also grew – crucially, not just Italian investment in the United States but the other way round too. While Italy’s economic ties with Russia and China remain potential hotspots, Rome has never questioned its Atlantic orientation. Nevertheless, possible austerity policies following sanctions against Russia could spread social discontent that populist parties can exploit for consensus purposes in the 2023 general election, rekindling anti-Americanism rooted in different segments of Italian society.
Topic:
Foreign Policy, Foreign Direct Investment, Economic Policy, Trade, and Energy
Political Geography:
Russia, China, Italy, and United States of America

32. Russian Energy Exports and the Conflict in Ukraine: What Options for Italy and the EU?

Author:
Margherita Bianchi and Pier Paolo Raimondi
Publication Date:
03-2022
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
Putin’s war on Ukraine has shaken the European Union to its core. Implications will be long lasting in numerous domains, but it is in the security and energy dimensions that concrete changes are already becoming evident as the EU fast tracks its strategy for energy diversification. The Russian invasion has drastically changed the European energy paradigm, with the new political absolute being a fast reduction of Europe’s overdependence on Russian gas. Diversifying energy supplies away from Russia is a means to tighten the economic noose around Putin, seeking to deprive the Kremlin of billions in energy revenue given that Russia continues to export oil, gas and coal to Europe at very high prices.
Topic:
Security, Sanctions, European Union, Gas, Energy, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and Italy

33. Cold winter: How the EU can help Moldova survive Russian pressure and protect its democracy

Author:
Andrew Wilson
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
Russia has long used gas prices and supply to put pressure on Moldova. It did so again when the country elected pro-European president Maia Sandu in 2020 and her parliamentary majority in 2021. Moldova occupies a significant geostrategic position with regard to the war in Ukraine, as a key ally and neighbour to that country’s immediate west. The Moldovan government has made some progress on its reform agenda, all while dealing with the impacts of the war, including looking after refugees and handling increased transit of goods across its territory. If the government can get through this winter, in 2023 it should be able to further diversify its energy options and make stronger progress on reform of the judiciary, defence, and security. The EU should support the Moldovan government in its endeavours. The country remains highly vulnerable to Russian pressure but financial assistance in the short term and support for reform in the long term will help it make progress, including towards eventual EU membership.
Topic:
Reform, European Union, Democracy, Energy, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and Moldova

34. Less Than a Full Deck: Russia’s Economic Influence in the Mediterranean

Author:
Joanna Pritchett
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia’s intervention in Syria in 2015, and then subsequently in Libya, marked its return as a major actor in the Mediterranean. Much has been made of Russia’s use of all elements of statecraft, including diplomatic, ideological, military, and economic instruments, to advance its interests in this region, a vital shipping and transit corridor. A closer look at Russia’s economic tool kit in this region, however, suggests concerns about Russian economic capabilities are likely overstated. Russia’s most important economic tools in the Mediterranean are its energy resources, arms exports, and ability to launder money through corrupt networks. These tools have complemented Russia’s diplomatic and military activities, particularly in areas where economic systems and rule of law have been weaker. Where Russia has been successful, it has increased a country’s dependence on Russian money, oil and gas, and/or arms, giving it a say in a country’s policymaking, particularly on matters of importance to Russia, and a way to undermine U.S. and the North Atlantic Treaty Organization’s (NATO) influence in the region. In particular, Russia’s unique economic tools have helped it manage its otherwise difficult relationship with Turkey, which depends on Russian oil and gas and is a new customer for Russian nuclear power and weapons systems. Turkey is a unique example in the Mediterranean where Russia already had a substantial trade and investment relationship beyond hydrocarbons, and then used these newer, more subversive tools to build its influence. These same tools have allowed Russia to gain more influence in Egypt, Algeria, and to some degree Cyprus over the last decade. These tools have proved of limited utility elsewhere, however, as they have not been backed by the traditional instruments of economic statecraft: trade in non-energy goods and services, foreign direct investment, and development assistance. Russia has trailed the United States and Europe, and in some cases China, in deploying these fundamental economic elements of foreign policy in the Mediterranean region. Based on economic data available, Russia’s bilateral trade with individual Mediterranean countries is low, its investment levels in most Mediterranean countries are insubstantial, and it is not giving large quantities of development assistance to the poorer countries along the Mediterranean’s eastern and southern rims. The lack of these traditional economic ties is surprising, given Russia’s military and diplomatic efforts to increase its influence in the region. Without them, Russia’s economic diplomacy in the region is highly based on symbolism and the relationships lack sustainability over the long term, which undercuts its geopolitical ambitions in the Mediterranean. If Russia’s ambitions in the Mediterranean region are limited to maintaining access, currying favor with key decisionmakers, and remaining a nuisance to NATO, then its current level of economic ties is likely sufficient. If Russia aims to grow its influence and clout with more countries in the region, however, its current economic tool kit does not appear to be large or sophisticated enough to achieve this. Economic statecraft is an important tool in any country’s foreign policy. Trade and investment deals link countries together in vital ways to improve living standards in each country. They also build relationships between people—politicians, business leaders, students, tourists—that promote mutual understanding and respect for each other’s cultures. The United States and the European Union (EU) have generally excelled in building these types of economic ties in the post–World War II era, and economic data show they continue to be the dominant economic powers in the Mediterranean. Continuing this leadership in the economy will likely ensure that Russian influence in the Mediterranean remains a manageable, if persistent, problem for the West.
Topic:
Foreign Policy, Geopolitics, Economy, Trade, Regional Power, and Energy
Political Geography:
Russia, Eurasia, and Mediterranean

35. Ukraine-Russia Relations in the Energy Sector: Status, Recent Development Trends, and Prospects

Author:
Yevhen Shulha
Publication Date:
01-2010
Content Type:
Journal Article
Journal:
National Security and Defence
Institution:
Razumkov Centre
Abstract:
Separation of Ukraine-Russia bilateral relations in the energy sector is rather conventional, since they objectively fit into the relations of both countries with a third party – first of all, countries of Europe (in particular, the EU) as consumers of energy resources transported across the territory of Ukraine. Therefore, both from the viewpoint of the process chain (producer – transit state – consumer) and from the economy viewpoint (seller – provider of transportation services – buyer) those relations should be viewed in a trilateral format.1 More than that, it may be argued that problems stockpiled in that sector of relations between Ukraine and Russia and in Europe in general may be solved solely in such trilateral format.2 On the other hand, since early 2000s Russia has been insistently pursuing a policy translating relations with partners in the energy sector into a bilateral format where it is usually stronger and uses that advantage to defend and promote its interests and/or the interests of its state monopolies and separate financial-industrial groups. That is why there are grounds to view the Ukraine-Russia relations in the energy sector as bilateral, but with account of presence of a third party there, first of all, the EU, as Ukraine declares its integration in it and is now engaged in formulation of common norms and rules of the European energy markets. This section briefly outlines interim results and problems of the Ukraine-Russia relations in the oil, gas and nuclear sectors – more interrelated and interdependent than other domains of the energy sector.
Topic:
International Cooperation, Oil, Bilateral Relations, Nuclear Energy, and Energy
Political Geography:
Russia, Europe, and Ukraine