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 News Analysis: Italy's difficult double act with Russia, G7 is highlighted by Putin visit

ROME, June 12 (Xinhua) -- If only Berlusconi were still Prime Minister. Not many Italians think that, of course. But at least one Russian does - and not just any Russian. President Vladimir Putin misses having his old friend Silvio Berlusconi in charge of Italy.

The reason for this was clear on Wednesday when, during a whirlwind diplomatic tour of il Bel Paese in which Putin met the Prime Minister, the Pope and the President, Berlusconi announced that his Forza Italia party would be proposing a motion in parliament calling for the end of sanctions against Russia.

Berlusconi's Putin-friendly gesture came just 48 hours after the G7 group, led by U.S. President Barack Obama and German Chancellor Angela Merkel, indicated that sanctions could be toughened, over what it sees as continued Russian military aggression in Ukraine.

When Putin arrived in Milan to visit the Expo 2015 World Fair he had to make do with the current Prime Minister Matteo Renzi as his host.

It was all handshakes and smiles at first. Putin hailed Italy as a "great partner of Russia in Europe," adding that "Cultural, trade and political relations between Italy and Russia date back over 500 years." "I'm delighted to welcome you here," was Renzi's reply.

The pleasantries didn't last long, however. Within an hour, Putin was looking Italy's top businessmen - including Claudio Descalzi of Eni, Francesco Starace of Enel and Marco Trochetti Provera of Pirelli - in the eye and declaring that "Italian companies missed out on a billion euros...they could have given their enterprises work, created jobs. That didn't happen because of the sanctions."

Giulio Sapelli, writing in Rome's Il Messaggero newspaper, agreed that sanctions on Russia were "a boomerang for Europe."

The threat of even tougher sanctions against Russia by the G7, of which Italy is a member, plus the desire to maintain lucrative trade ties with Moscow, means that Rome is engaged in a difficult balancing act. Renzi's tone during his meeting with Putin was casual but friendly, but there is no denying Italy is in a bind.

Both leaders agreed that the key to resolving the Ukraine conflict lay in reviving and implementing the crumbling Minsk II peace deal of February this year. But which side - Russia or Ukraine - is responsible for its disintegration was not broached.

An indication of how Rome wants to have its cake and eat it came last week when Italy's foreign minister Paolo Gentiloni said Italy sought to combine "fidelity and loyalty with its allies, plus a special relationship, strong in the economic sense, as well, with Russia."

La Repubblica said Wednesday morning that Putin understood this, and saw his relations with Italy as "a way to divide and weaken the EU and NATO's stance against him."

An alternative view came from the pundit Ugo Tramballi in Il Sole 24 Ore business daily. He said that Russia was an important economic partner and an ally which, outside Europe, had a key role in tackling the Syrian and Libyan crises.

Putin also enjoys support from other sources in Europe. The left-wing Greek government has opposed sanctions, as have populist, anti-EU movements such as France's National Front and Italy's Northern League.

Francesco Galietti of Italy's Policy Sonar think tank said that Putin has courted nationalist leaders across Europe, and may fancy doing the same with Matteo Salvini who is the leader of the Northern League, although Putin's historic friendship with Berlusconi may influence his strategy on that front. Italy is a large country that lies astride many geopolitical fault lines. It is now a fact that a large "russophile" political force exists in the Italian conservative camp.

Since the early 2000's, Moscow's trade ties with Rome have boomed to the extent that Italy is now Russia's fourth biggest trade partner.

The trade missions to Russia undertaken by Berlusconi when he was prime minister are already the stuff of legend.

Times have changed. Berlusconi is now out of parliament and banned from standing for re-election. And since the introduction of U.S.-engineered sanctions in March 2014 Italian-Russian trade has fallen. It was down 10 percent from 54 billion euros (61 billion U.S. dollars) to 48 billion euros last year. In the first quarter of 2015 it fell by a quarter.

However, the picture is not as simple as that. A weakening ruble and collapsing oil prices have hit the Russian economy very hard indeed.

Aside from economic factors, much of Putin's interest in maintaining strong ties with Italy lies in his diplomatic ambitions. Analysts say that his meetings with Renzi, recently-elected president Sergio Mattarella and the Pope will play well to his domestic audience, giving the impression he remains a player on the global stage.

According to analysts, a key to Russia maintaining its position as a diplomatic heavyweight is its ability bring influence to bear on two of the greatest foreign policy challenges currently faced by the western world: terrorism and the migrant crisis, in which hundreds of thousands of refugees fleeing war zones or poverty in Africa and the Middle East are heading for Europe.

Putin is aware that Italy is bearing the brunt of the migrant exodus across the Mediterranean Sea. Berlusconi, who reluctantly joined French and British military action to oust the Libyan dictator Muammar Gaddafi four years ago, has since condemned the regime change in Libya. The ousting of Gaddafi has seen the oil-rich Italian trading partner collapse into chaos and become the chief exit point in Africa for tens of thousands of migrants fleeing Africa - most of them heading to southern Italy.

Putin repeated this criticism of that western military intervention, after meeting Renzi. He said Libya was now experiencing a "catastrophe" as result.

At the end of a "very long day" in Italy, Putin finally met with the person he really wanted to see - Silvio Berlusconi. But it was only a brief, if affectionate, encounter, at Fiumicino airport before Putin returned to Moscow.

The friendship between the two is still strong. But Berlusconi will never be in power again. And the relationship between Russia and Italy, while still cordial, is not as special as it was. Putin will have to get used to that. But so, too, will Italian business.

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