•   Although Iranian President Mahmoud Ahmadinejad, in a message on May 3, 2008, congratulated Silvio Berlusconi on his re-election as Italian Prime Minister, the Italian government has opted to align itself with European Union and United States diplomatic policy towards Iran, condemning Iran’s nuclear programme and supporting the idea of stronger sanctions should Iran not comply with UN regulations. [1]

•    In May 2008, Italian Foreign Minister Franco Frattini rejected the possibility of a meeting between Prime Minister Silvio Berlusconi and Iranian President Mahmoud Ahmadinejad, who was scheduled to attend a UN conference in Rome. Frattini said Berlusconi had chosen to adhere to the American stance on engaging Iran. [2]

•   In September 2008, Berlusconi expressed concern over Iranian President Ahmadinejad’s remarks about wiping Israel off the map, declaring that the world must pay close attention to Ahmadinejad’s “lunatic” stance towards Israel. [3]

•  On 23 June 2009 in a joint press conference with Prime Minister Benjamin Netanyahu of Israel at the Palazzo Chigi in Rome, Mr. Berlusconi announced that Italian diplomatic relations with Iran would always be in accordance with Israeli and American foreign policy. He stated that he was willing to carry forward Italy’s diplomatic and economic relationship with Iran only on the condition that this met with the approval of the American and Israeli administrations. [4]

•  As the host nation of the 2009 G8 Summit, in February 2009, Italian Foreign Minister, Franco Frattini, invited the Iranian Foreign Minister Manucher Mottaki to the meeting of G8 Foreign Ministers in Trieste, in an attempt to use Italy’s comparatively close relationship with Iran to improve relations between Iran and the West. [5]

 •  However, following the disputed Iranian elections of June 2009 and the subsequent crisis which ensued in Iran, the Iranian government declared it would not attend the summit. Frattini affirmed that the topic of Iran would be a top priority at the G8 Summit in Italy, calling for the immediate cessation of violence and stating that it was a strong possibility that the G8 nations would impose some form of sanctions on Iran following the summit. [6]

• Echoing the American stance on Iran’s nuclear programme, Frattini stated in January 2008 (prior to becoming Italian Foreign Minister) "I support severe [Security Council] sanctions " if Tehran does not halt its uranium enrichment program within a month. Europe "cannot leave Israel alone" in its efforts to thwart Iran's pursuit of a nuclear bomb, and it should have the diplomatic support of the international community in that pursuit, said Frattini. Iran must freeze its nuclear program, including the parts it claims are for civilian use, until it provides complete information on it to the international community, Frattini said. "If they would have agreed about transparency of their nuclear exercise the situation would be different. But without that they are leading us toward adopting a third set of sanctions," he said. [7]

Economic relations

• Despite the diplomatic rhetoric, Rome traditionally has good business relations with Tehran and Italy remains Iran’s largest and most important trading partner in Europe, with bilateral trade totaling well over $7.5 billion a year. [8]

• Commerce between the two countries is largely based on the trade of raw materials, but recently this trade has expanded to the industrial and technological sectors. [9]

• The Italian oil and gas giant Eni SpA is one of the most important Italian companies, benefiting from a presence in Iran for over fifty years. It has been estimated that if economic sanctions imposed by the Italian government were to force Eni SpA to withdraw from Iran, it would cost the company between $2 billion and $3 billion.[10] 

• In March 2008, the Swiss power company Laufenburg (EGL) and the National Iranian Gas Export Company (NIGEC) signed a long-term agreement to bring natural gas from Iran to Europe. At least 80% of the gas is destined for the Italian market. [11] 

• On January 9, 2008, the National Iranian Oil Company NIOC and Italy’s Edison International signed a $107-million (73-million-euro) contract for exploration in Gulf waters. It involves geological and seismic studies as well as drilling of up to two wells in Iran’s Dayer block. The project is set to take four years, open to a one-year extension. [12] Iranian Oil Minister Gholam Hossein Nozari told state television that Iran and the Italian power company Edison were nearing agreement on a deal to pump more than a billion cubic feet of Iranian gas to Europe per day. [13] The 212-km- long pipeline will carry natural gas from the Caspian Sea and Iran to Western Europe when it is completed, at the end of 2009.

• Iranian Khomein Petrochemical Complex and Italian company Basell signed a 20 million euro contract for the transfer of technology. [14]

• SACE, the Italian export credit agency, has €4.1 billion at risk in Iran. This amounts to roughly 15 percent of its exposure [15] worldwide and SACE's highest concentration of risk anywhere. However due to growing fears about the political situation in Iran, SACE has slashed its Iranian portfolio by more than €1 billion since 2004. [16]

• Since December 2006, Giovanni Carosio, the Italian Central Bank's Deputy Director General, has privately warned banks about the growing risks associated with Iran. “Several versions have been issued starting in December 2006 and then afterwards. These are notes kept private for the banks, in reality, but their contents are what I described." [17]

• In June 2007, UN sanctions prompted Italy to take control of the Rome branch of Iran’s state-owned Bank Sepah, which the U.S. Treasury claimed was financing firms that provide Iran with weapons technology and materials. [18]

 Footnotes:

[1] „Ahmadinejad felicitates Berlusconi on re-election,“ IRNA, May 3, 2008, http://www2.irna.ir/en/news/view/menu-236/0805032180153641.htm

[2] "Italy: Berlusconi will not meet with visiting Ahmadinejad," Agence France Presse, May 27, 2008, http://www.ynetnews.com/articles/0,7340,L-3548533,00.html