Italy must take a stand against Russian expropriation, by Dario Pio Muccilli, Star-Revue EU correspondent

he Ariston Group is an Italian leading corporation in heating systems and related products. But recently it became the center of a diplomatic clash between Italy and Russia. Indeed the Russian branch of the group, Ariston Thermo Rus, has been expropriated by the Kremlin and acquired by Gazprom, Moscow’s top multinational energy enterprise.

It all started on April 26th with a Presidential decree, issued by Putin himself, ordering the nationalization of the Italian group. By law, 100% of the shares of Ariston Thermo Rus were transferred from Ariston Group to the temporary management of Gazprom. We’re talking about a $100 million dollars branch which has been in the country for 20 years.

Moscow has defended its action stating that they are a reply to sanctions put in place by Western countries. Ariston Group, according to the Kremlin, expressed support to the sanctions, even though operating on Russian soil, an offense Putin clearly could not stand. Sources from the Russian diplomacy revealed how this could be a test for a larger strategy targeting those Western corporations still active in the country without abiding to its propaganda rules.

The Kremlin is using Ariston Group as leverage. They pressure the industry so that the latter could pressure the government. And it is not surprising that Italy was used as a pilot. Before the war in Ukraine started, Italo-Russian trade relations were significant. Italy exported goods worth $8.65 billion, while Russia sold Italy $22.2 billion of which $12 billion was in gas.

Politically, most of the parties were not distant from Putin, and Berlusconi was still one of the dictator’s best friends. Italy is the holiday destination of oligarchs, at Forte dei Marmi and all along the Tuscanian northern shore called Versilia.

Italy’s government is preparing several countermeasures. One of them would be for the Ariston Group to get back at Gazprom by taking possess ion of its assets in Italy or the EU.

However, apart from the business interests, there is need for a political answer. The Italian cabinet is coordinating with the EU and other Western countries to secure a common reply from Russia. Putin has already managed to escape several sanctions, including banks participation in SWIFT transfers and oil sales. Giving him the chance to get away with an expropriation of a Western company is not something the EU wants.

Everything Putin has done so far in the Ariston affair is a divide and rule strategy. He’s trying to tell other countries: if you behave like Italy we will hit your companies. Putin cannot stand the western sympathies of the Meloni Cabinet and he does not want other countries to follow her example.

If he will fail to obtain his goal, the aftermath would nonetheless be hard for the Western economies already struggling against inflation and economic recession. Eventually, it is worth noticing that this expropriation comes right when Italy has assumed the Presidency of the G7 group, so the stakes for Meloni are higher: if she fails to address this threat, her international leadership would be hindered for quite a long time.