Follow the Rubles

The Roman city of Verona, situated 100km west of Venice, has very few connections to Russia. In 1822 it hosted the tsarist delegation during the last congress of the Holy Alliance, and today the most prominent link to Eurasia is the so-called “Russian cake”, a pastry and almonds dessert of uncertain etymology.

However, the city also hosts one of many Italo-Russian organizations which have sprung up in the last decade. Since the elections in March 2018, newspapers have focused on the political ties between right-wing parties and Moscow, and most emphasized the ideological affinities between Russia’s reactionary policies and the galaxy of Italian right-wing parties, spanning from the governing Lega to fringe and neofascist movements.

The Conoscere Eurasia (Know Eurasia) association hardly preaches to this radical choir. The non-profit organization is guided by respectable members of the business community, and is chaired by Antonio Fallico, head of the Russian division at the Intesa San Paolo bank and honorary consul of Russia in Verona. Still, the organization has become one of the core actors in a network of lobbyists, NGOs and news agencies pushing for friendlier relations with Russia, often with the support of Russian state agencies.

The involvement of professor Fallico is no surprise. Born in Sicily in 1945, since 1974 he lives in Moscow, where he represented different Italian banks before becoming president of Intesa Russia in 2003. His ties to the muscovite business and political élite are old news in Italy: in 2009, a year after being decorated by president Putin with the Order of Friendship, newspaper Il Fatto Quotidiano speculated that Fallico was the mediator between then-PM Silvio Berlusconi and Vladimir Putin. The claim was later also published by Corriere della Sera. Suspects aside, Fallico is very public about his sympathies: in interviews for Italian business newspapers, as well as Russian state media TASS and Sputnik, he regularly attacks the sanctions imposed by the EU on Russia after the Ukrainian crisis. He even went so far as suggesting that Italy should vote against the continuation of the sanction regimes at the Council of the EU:

The time has come to choose the route [leading to] politics of dialogue and develop processes of integration, instead of [the path] of countries that feel exceptional prerogative to impose their own rules on others”.

Banca Intesa has of course vested interests in friendlier business relations due to its involvement in projects affected by economic restrictions: for example, it invested €400M in the Yamal gas plant project in arctic Siberia, whose majority shareholder Novatek is subject to sanctions since 2014. But the bank’s area of activities goes beyond resources exploitation. In 2017, Intesa announced that

[We have] been entitled to work with Russian strategic corporations of defense-industrial and security sectors, as well as with companies directly or indirectly controlled by these corporations […] along with some other Russian banks, belonging to foreign financial institutions.

Back in Italy, most of the events organized by Conoscere Eurasia — business seminars as well as cultural initiatives — often show Intesa as an official partner. But what’s fascinating about Fallico’s association is that it represents a perfect institutional model of how Russia’s attempt to exercise soft power beyond the “near abroad”.

In theory, Russia has a dense network of agencies promoting its soft power abroad. These include Rossrotrudnichestvo, an agency tasked with coordinating cultural and humanitarian efforts abroad, the Ruskiy Mir Foundation promoting the Russian language, and NGOs close to the Ministry of Economic Development such as Roscongress. In practice however, institutional efforts have been underwhelming. Half of Rossrotrudnichestvo’s modest budget is lost due to red tape every year, while Ruskiy Mir is nowhere near to the endemic presence of other foreign cultural centers (for sake of comparison, in Italy there are 6 Ruskiy Mir seats, against 27 Goethe-Instituts, its German counterpart). This doesn’t mean that these efforts have failed in transforming Russia in a more attractive partner. People linked to these institutions have often successfully injected themselves in pre-existing divides, exploiting their positions.

Irina Osipova, daughter of Rosstrudnichestvo’s Rome head Oleg Osipov, is an enthusiastic sympathizer of far-right parties, even running for a seat in Rome’s city council and organizing trips to Russia and pro-Putin demonstrations involving neofascist groups.

A similar approach exists from the business perspective: while Roscongress offers endorsements and invitations to official events, most Russian efforts in the realm of business diplomacy seem to be coordinated by a handful of private actors. In the same vein, Conoscere Eurasia hosts a Ruskiy Mir center in Verona, whose (state) funds are sometimes used for cultural events. That Russian institutions adopt a supporting rather than leading role in these activities is a sign that Moscow has matured a nuanced and smart approach to exercising soft power. Konstantin Kosachev, the diplomat who was appointed to relaunch Rossrotrudnichestvo in 2012, has long advocated for an unobtrusive exercise of influence by giving more leeway to local officials, drawing a parallel to Russia’s rejection of universal values in foreign policy:

The Russian model is not fixed on universal human values, yet it does not exclude them from its guidelines — simply they do not make its image and cannot be used as a specific export product because they are res omnium communis. That is why it does not intend to reconfigure partnership to suit its own needs: in practices of other states it would result in the “de-sovereignization” of partners, the entry of powerful foreign business amidst eulogies for open borders and free market, and the dissolution of religious and traditional foundations.

Observing the thriving ecosystem of pro-Russian organizations in Italy two conclusions are inescapable: Kosachev’s doctrine has been embraced, and it has been largely successful. The network built around Fallico and his association has spread further and more discreetly than what would be possible for a government effort. This has happened mainly through the activities of one of Conoscere Eurasia’s Italian partners. ISPRO is a company specialized in business intelligence and lobbying, registered as an interest group at the Italian parliament. Its media arm Ispromedia has ties to Russia Today and RIA Novosti and operates a news agency (eursiatx.it) monitoring Eurasian markets. Ispromedia also founded an association for the establishment of an Italian-Eurasian chamber of commerce, “which aims to assist and encourage economic cooperation between Italy and the Eurasian Economic Union”. This ambition has political implications, as the lack of recognition by the EU of the Eurasian Economic Union is a critical point of contention in bilateral relations. The precondition posed by Brussels to recognize the EEU is the full adoption and resolution of the Minsk peace process, which is widely considered unimplementable in the near future. Pushing for the overcoming of this condition could thus be considered an exercise of political pressure akin to the suggestion of Fallico, who holds managerial positions in Italy’s largest bank, to drop the sanctions on Russia, as well as a departure of current European positions on Ukraine.

While “Italia-Eurasia” is operated by Ispromedia (the two entities even share the same HQ in Rome), the legal seat is hosted by Link Campus University, a structure of higher education which has been recently put under public scrutiny. The university is young, as it was officially recognized only in 2011, but is already familiar to the Italian political elite. Link Campus has developed strong bonds especially inside the security establishment: the current Italian defense minister Trenta and vice minister for foreign affairs Dal Re taught there, while undersecretary for defense Tofalo is a former student. However, representatives of every party and even leading members of the general staff regularly attend events and conferences there. Another (in)famous former member of Link Campus’ staff is Joseph Misfud, a professor who apparently offered dirt on the Clinton campaign to Trump’s foreign policy adviser Papadopoulos. The proximity to Russian universities was one of the early headaches of the current government: minister Trenta was supposed to teach at a graduate course at Moscow State University, together with controversial figures such as Ivan Timofeev (suspected by the FBI of involvement in the “Russiagate scandal”) and Sputnik contributor Olga Zinovieva. While accusations against the university have yet to lead somewhere substantial, activities backed by Link Campus can shape the country’s foreign agenda thanks to its tightly-knit network of prominent alumni.

Italy has always been perceived as one of the friendlier EU member states by Russia. This has been true regardless of the political situation, opposition by interest groups has been strong. Despite the threat by the current ruling parties to dismantle the sanctions regime, the Conte government has refrained from rocking the boat too hard — for now. As Moscow decentralizes its soft power strategy, however, the pressure from the business community has increasingly grown insistent and targeted, augmented by Russian political and news infrastructure. The current government already has an atypical relation with Moscow: in July, minister of the interior Salvini went into meetings with members of the Russian security council accompanied by the president of the small Lombardy-Russia association. If the current efforts will convince Rome that vetoing further sanctions will raise substantial political capital, it could lead Conte to cave — especially given the strained relation with the European partners. Italy is the front line of a hardly fought political battle, and the Kremlin is winning.