OPINION | Iran and Italy: Old and New Partnership

The Italian Prime Minister Matteo Renzi is the highest-ranking European leader who visits Iran since the Joint Comprehensive Plan of Action (JCPOA), which the P5+1 (the five permanent UN Security Council members plus Germany) signed last year.

By Zadeh Taheri

Expert on European Affairs at IranReview.org

The Italian Prime Minister Matteo Renzi is the highest-ranking European leader who visits Iran since the Joint Comprehensive Plan of Action (JCPOA), which the P5+1 (the five permanent UN Security Council members plus Germany) signed last year.

The nuclear deal with Tehran was a watershed moment in international diplomacy and at this juncture, Italy eyes growing economic and security cooperation with post-sanctions Iran.

As Rome seeks to renew relations with Iran, a 250-strong delegation accompanies Italian Prime Minister on a two-day trip to the country.

Italian-Iranian relations have traditionally been close.  Rome competed with Berlin to be Iran’s top trading partner before the UN sanctions were imposed against Tehran. Annual trade between Iran and Italy was around 7 billion Euros in the pre-sanctions era.

Even during Iran's nuclear tension, Italy has maintained active diplomatic channels with Tehran. Italian diplomats played an active role in nuclear negotiations and Italian then Foreign Minister, Emma Bonino, became the first European foreign minister to visit Tehran after the interim nuclear deal was agreed in 2013.

Matteo Renzi was the first European leader who hosted Iranian president Hassan Rouhani on his first state visit to Europe in almost two decades following the lifting of sanctions against this country. 

Economic interests play a key role in driving Italian-Iranian ties and this long-standing and diversified economic relationship has been centered on the petrochemical sector and related services, as well as the steel, mining, automotive and machinery sectors. Italy’s energy companies made considerable investments inside Iran and they largely took the impact of the sanctions against the country.

The JCPOA opened the door for many Italian firms to tap into the Iranian market. Iran has a relatively untapped market of 78 million people and a USD 400 billion economy.

Italy is dealing with financial crisis and increasing exports to this new market can be a means to overcome the crisis and perhaps to achieve economic growth. According to SACE (the Italian state-owned credit rating agency), the opening up of the Iranian market could spur Italy’s export for a total of EUR 3 billion within the next four years.

As Italy is interested in exploring commercial opportunities in Iran, Italy’s interest in Iran has never been just about economics. Besides economic relations, Rome eyes growing security cooperation with Tehran.

The security dilemmas in the Middle East, makes greater collaboration with Tehran in the international effort to counter the extremist groups, inevitable. Italy recognizes Iran’s sustained role in the fight against Daesh in Syria and Iraq and has already pushed for Iran’s inclusion at the Geneva II negotiating table on Syria. As one of the first destination of a huge influx of refugees, Italy has to support possibilities of peace for the region. Moreover, Rome shares Tehran’s concerns about stability in Afghanistan.

Italy and Iran also share cultural similarities that can help the process of political and economic negotiations. Both countries represent ancient civilizations have long been interested in the each other from a historical, literary, and archeological point of view.

Besides all these factors, the level of trust between Iran and Italy, a shift in Europe’s stance on Iran and less need to balance act between engaging with Iran and the interests of regional allies, has given Italy greater political space to take bold measures regarding Tehran.

Iran considers Italy as one of its closest partners in the west and unlike some other European countries, Italy should not be very careful to appease Saudi Arabia, Israel and other regional opponents of rapprochement between the West and Iran. After all, improving EU - Iran relations provides better opportunities to develop Iran and Italy relationship.

Rome has broken the taboo of prohibiting direct high-level engagement with Iran beyond nuclear negotiations and now is looking to renew relations with its old political and trading partner in the region.

Key Words: Italy, Iran, Old and New Partnership, Joint Comprehensive Plan of Action (JCPOA), Post-Sanctions Iran, Matteo Renzi, Hassan Rouhani, Economic Interests, Energy Companies, SACE, Security Cooperation, Middle East, Daesh, Ancient Civilizations, EU, Taheri

More By Azadeh Taheri:

*EU and Iran: More Opportunities for More Cooperation: http://www.iranreview.org/content/Documents/EU-and-Iran-More-Opportunities-for-More-Cooperation.htm

*US Visa Restrictions and EU's Concerns: http://www.iranreview.org/content/Documents/US-Visa-Restrictions-and-EU-s-Concerns.htm

*Photo Credit: ISNA

This article has been originally published at IranReview.org on April 13, 2016. All rights are reserved by the Original Publisher.