Moscow’s decision to include Italy and many other nations on the list of hostile countries is not merely a formal matter. Being a hostile country has practical implications, especially from the economic side, but not only. tool that Vladimir Putin has decided to use to balance the sanctions imposed in accordance with the European Union. And therefore the economic damage could be heavy, as well as the consequences on daily life with the cutting of raw materials and energy.
Italians in Russia
The Farnesina has already urged the return to Italy of the Italians who are in Russia. The choice to recall them is for a safety issue. Moscow could withdraw visas from foreigners from countries included in the list that includes practically all those who voted for the UN resolution against the Russian invasion ofUkraine. The new rules on information that arrive at arrest for the disclosure of what Moscow considers fake news could be applied to foreigners remaining in Russia.
Credits in rubles
The economic problem concerns the companies that operate in Russia and that could have the credits repaid in rubles and not in the currency established in the contracts. The ruble has already depreciated by 45% against the euro. Paying with such a currency means not honoring the debt given the low value of the currency. There are those who also hypothesize a nationalization of companies also with foreign participation that operate in Russia.
Italian banks were exposed for 25.3 billion euros at 30 September 2021, first in Europe. They are also the ones that have maintained exposure in Russia after the annexation of Crimea in 2014.
The problem has already been felt with the increase in corn prices. Russia and Ukraine account for a fifth of world maize trade. Here a problem can arise in the costs of the farms that use this cereal. From the Russia 6% of the soft wheat arrives in Italy. It will never come again. The risk is more for the bread than for the pasta.
This is the closest problem. The Italian government is looking for alternative energy suppliers to replace gas. Putin threatens to cut or shut down supplies, but that would also stop one of the few remaining revenues of the Russian state. Europe receives over 80% of Russian gas exports, Moscow has no other equally important customer and has no infrastructure to take it elsewhere.
A study by the Eni-Enrico Mattei Foundation, one year from now, has hypothesized the scenario of the cut in Russian supplies. It would lead to gas rationing and possible disconnections of electricity for companies and civilians. Italian gas consumption is 70 billion cubic meters per year, in the hypothesized scenario it would have 75%, 58.4 billion cubic meters of gas. There would be the reopening of coal plants and an increase in the production of renewables with also the search for new suppliers in Africa, mainly Algeria and Libya. The price of gas is already 10 times higher today than it was a year ago. The Minister for Ecological Transition, Roberto Cingolani, speculates that the dependence on Russian gas will end within 30 months.
Other stories of Vanity Fair that might interest you:
– Ukraine: night in the shelters in Kiev, Russian vehicles close to the city
– Ukraine, “We will spend the night in this bunker, in the cold”
– Attack on Ukraine, protests also in Russian cities
– Ukraine, the cry of civilians: “We are terrified”
– Ukraine, the attack started during the night
– Ukraine: “Awakened by the bombing, I threw up with fear”
– Ukraine, Natalia Onipko: «The world help us. We can’t do it alone “
Source: Vanity Fair