News Analysis: After nuclear deal, Italy targets Iran trade opportunities

Following the easing of sanctions against Iran decided in the nuclear deal signed on July 14 in Vienna, all the requisites are now in place for Italy to rekindle its ancient relationship with Tehran.

Last year, the Italian exchange with Iran amounted to nearly 1.6 billion euros (1.8 billion U.S. dollars), according to the Rome-based Italy-Iran Chamber of Commerce and Industry (IICC).

Though Italy ranked second in the European Union (EU) in trading with Iran, after Germany, yet the value was significantly lower compared to the Italy-Iran trade volume exchange of over 7 billion euros before the sanctions.

"The Italian government is seeking to return to levels of trade with Iran before 2011," Fabrizio Cassinelli, a columnist of ANSA news agency and analyst on Iran, explained to Xinhua.

Many Western countries are trying to boost ties with Iran on the back of the historic accord which lifts sanctions. But the Italian government, Cassinelli said, based on a traditional solid dialogue with Iran, moved an important step early in Dec. 2013, when then foreign minister Emma Bonino paid the first visit to Iran by an Italian foreign minister in 10 years, and the first by a European head of diplomacy since the election of Iranian President Hassan Rouhani in June of the same year.

At that time Bonino said she intended to "open a new season of dialogue with Iran, and to bring other European countries along." More than one and a half year later, following the July 14 announcement of the Vienna deal that will eliminate the main sanctions posed by the EU in the financial, energy and oil sectors, the Italian government announced another visit to Iran which took place on Aug. 4-5.

"We can more than double trade volume exchange in a couple of years. All the conditions are there... and we have the assets to be first," Italian Foreign Minister Paolo Gentiloni, who headed the mission, said.

Gentiloni highlighted that new "business and economic partnership prospects" have opened up after the Vienna deal. Italy can play a big role in energy, food, technology, design and tourism, he said.

Differently from international competitors that suffered much less limits in the past years, Italy accumulated a slowdown in key sectors such as the energy and machine tool industry, which were penalized the most, transportation vehicles, steel and agricultural goods, according to analysts.

SACE, an Italian export credit company fully-owned by Cassa Depositi e Prestiti (CDP), a joint-stock company under public control, has estimated that machine tools, accounting for 57.9 percent of Italian exports to Teheran, have seen the value of exports halve to less than 700 million euros from 1.3 billion euros in the past five years.

SACE along with the Italian Ministry of Economic Development and Mediobanca, Italy's largest investment bank, during the Italian government mission in Iran, signed a Memorandum of Understanding (MOU) with the Iranian Ministry of Economy and Finance and the Central Bank of Iran to facilitate the development of future economic and trade relations.

Operators expect Italian exports to grow to up to 3.8 billion euros in 2018 from 1.2 billion euros last year, according to SACE.

Italian Economic Development Ministry Federica Guidi was confident that the Vienna deal represents, for her country, a possibility to return with its business potential in a very important market.

She said oil and gas giant Eni is among the companies ready to return to Iran and announced that Finmeccanica, Italy's leading aerospace and defense group, has signed a 500-million-euro contract to build a combined cycle electrical power plant in Iran.

"Italy was Iran's first economic and trade partner before the sanctions: products and know-how are still very appreciated," she stressed, adding that Italy aims to enter into joint ventures in Iran.

"In addition, Italy and Iran are among the most ancient cultures in the world. They are both very complex and have much in common, from family relations and rich literature to deep sense of history," Cassinelli also underlined.

He however sounded a cautious note. "From 2006, Italy has lost many positions, despite remaining among the largest EU exporters to Iran. Gaining market shares will not be easy," he told Xinhua. (1 euro = 1.1 U.S. dollars) Endit