Economy / Foreign relations / Security and defence

Russia threatens to block Italian-led gas pipeline

Speaking in Ankara, Turkey, the Russian President Vladimir Putin announced that his Government is considering the possibility to stop the South Stream project, a gas pipeline reaching Europe across the Black Sea and the Balkans.

Italy, via its National Hydrocarbons Administration (ENI), is a major partner in the project, and indeed Saipem, the ENI subsidiary involved, shrank in the stock exchange after the announcement.

The EU-Russia standoff over the Ukraine crisis is coming under increasing political criticism in Italy. It is claimed that Italy simply cannot afford in its current state of economic crisis.

However, a part of the Italian press notices that the Italian group is protected by ironclad clauses in the contracts with Russia, and that the pipeline was a tool for furthering weakening Ukraine bypassing it in the supply of gas to Europe. According to this interpretation, the victim was not Italy but Russia, which was forced to abandon the project due to the international sanctions and the bad performance of its economy, worsened by the depreciation of oil.

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