Italy’s industry minister has pledged to support business deals with Iran potentially worth billions of dollars, undeterred by fears US president-elect Donald Trump could put slowly thawing international relations back on ice.
Iran re-joined the global trading system in January after a multilateral deal with world powers, and Italian firms eagerly started drawing up commercial agreements.
Trump has raised the prospect the United States could pull out of the pact that lifted sanctions in exchange for limiting the Islamic Republic’s nuclear program, although European diplomats insist the US could not unilaterally annul a multilateral deal.
Italian Industry Minister Carlo Calenda says he will continue to work to strengthen trade ties and travel to Iran in early 2017 along with Economy Minister Pier Carlo Padoan, Reuters reported.
“The issue of funding investment, which Tehran complains has been held up by continued US sanctions restricting Iran’s access to the international banking and financial system, would be high on the agenda,” Calenda said at a trade fair in Rome for Iranian companies.
“The central issue is to make financing channels work fully, so that all the good projects we have can become reality.”
Calenda said it was too early to say how the picture could change under Trump’s leadership, but in the interests of the countries involved “I think there is the absolute necessity to implement the (nuclear) agreement and move forward that way”.
Asked whether any of the collaboration agreements made so far, which have involved oil services group Saipem and steel firm Danieli, were at risk, Calenda said, “No, I don’t think so.”
Italy’s First Mover Advantage
Italian Minister of Economic Development Federica Guidi, along with Minister of Foreign Affairs and Cooperation Paolo Gentiloni, led a high-ranking delegation to Tehran a month after Iran signed a nuclear agreement with world powers last year. The landmark deal led to the lifting of sanctions against Iran in return for the country curbing the scope of its nuclear program.
Italy is eager to develop “long-term mutual cooperation” with Iran rather than simply maintaining its presence in Iran’s consumer market, Guidi said in a meeting at Iran Chamber of Commerce, Industries, Mines and Agriculture.
“Italy’s priority in resumption of relations is to create financial and banking infrastructures on which future economic cooperation can be built.”
A memorandum of understanding was signed during the visit by the Italian Ministry of Economic Development, the export credit company SACE and investment bank Mediobanca and Iran’s Economy Ministry and the Central Bank of Iran.
“The MoU paves the way for strong involvement of SACE alongside Italian and international financial institutions to ensure rapid and effective restoration of bilateral trade and investment,” said Iran’s Economy Minister Ali Tayyebnia.
Earlier this year, a few days after the implementation of the nuclear deal, Iran’s President Hassan Rouhani paid a visit to Rome, where a settlement agreement for the recovery of the sovereign credit due to SACE by Iranian counterparties was signed between the two sides.
SACE, the Italian export credit agency has raised the ceiling of credit allocated to Iran to over €6 billion and will open a branch office in Tehran to extend financial and insurance services to Iranian businesses, said Central Bank of Iran Governor Valiollah Seif in Rome.
Later in April, Iran and Italy signed 12 memoranda of understanding in the sectors of energy, steel, telecommunications, aviation and medicine during a trade forum held in Tehran.
The meeting was attended by visiting Italian Prime Minister Matteo Renzi and Iranian Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, as well as high-ranking officials and representatives of the two countries’ public and private sectors.
During the visit, Italian financing agencies teamed up to give Iran nearly €5 billion in credit lines and guarantees for exports, in one of the most significant financial deals with Iran since the nuclear agreement.
The Cassa Depositi e Prestiti, Italy’s state financing agency, which controls more than €350 billion in assets, said it will issue €4 billion in credit lines to Iranian public entities for them to fund big infrastructure projects such as railroads and motorways.
SACE said it will support the transactions by providing €4 billion in guarantees for those deals and an additional €800 million in funding for Italian small- and medium-sized enterprises doing business in the country.
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