France and Italy were at such disagreement two years ago that Paris recalled its ambassador and a feud between the leaders degenerated into name-calling – but a Franco-Italian “treaty of friendship” that President Emmanuel Macron will sign in Rome this week shows how much the mood has changed.
Intended to stimulate closer collaboration on everything from foreign policy to defense and culture, the 60-page Quirinal Treaty reflects a Franco-German agreement from 1963. The idea was discussed in 2017 by Macron and the former Italian Prime Minister Paolo Gentiloni, but was sunk the following year by the Italian coalition of five stars and the Nationalist League, which clashed heavily in Paris over migration to the EU.
Now the project has been relaunched under Macron and Mario Draghi, the Italian Prime Minister. With the former president of the European Central Bank in charge in Rome, Italy’s nationalist-populist impulses have been so tamed that even the League is in favor of the treaty.
“Our interest at the moment is to resume talks with France,” Lorenzo Fontana, the League’s lawmaker responsible for the party’s foreign policy, told Italian media.
Politically, the Draghi government wants to use a better relationship with Paris to play a more active role at the European level – especially at a time when Germany is expected to focus more on domestic politics as a new government takes the reins of Angela Merkel.
There are also important advantages for France, of a stronger relationship. The closer ties will help Macron strengthen the moderate Western European core of the EU and gain influence against populists in his country while securing an important ally to support him during the French EU presidency in from early 2022.
The bridge between Rome and Paris could also help negotiate a post-pandemic reform of EU fiscal rules. The Stability and Growth Pact aims to limit public deficits and debt and is currently suspended due to the pandemic. A battle may hover over reform with so-called âfrugalâ countries such as Austria, Denmark, Finland and the Netherlands.
Even with Macron and Draghi at the helm, however, navigation might not be smooth between the two countries – especially on the business front, often a source of friction between competing French and Italian industries.
Talks about the possible sale of an Italian arms manufacturer belonging to state-controlled defense group Leonardo to a French rival could prove to be an early test. People close to the talks expected the sale to be discussed during the French visit, but Italian doubts mean a decision could take much longer to be made.
KMW-Nexter, a Franco-German defense joint venture, has made a non-binding offer of 650 million euros to buy Leonardo’s defense systems division, according to several people familiar with the talks. The division includes two companies, formerly known as OTO Melara and Wass, which are the main manufacturers of naval guns, tank turrets and torpedoes. The offer is 200 million euros higher than that of the Italian shipbuilder Fincantieri.
But a backlash began, with the Five Star Movement, the main member of Draghi’s coalition government, claiming it opposed “the sale of strategic Italian assets to foreign investors.” The Democratic Party, via Labor Minister Andrea Orlando, and the unions have also criticized the idea of ââa sale.
This weekend, Orlando, from the Ligurian town of La Spezia where OTO Melara is located, said it was not about “protectionism. [but] it is obvious that financing the growth of foreign groups with national funds is not a smart strategy â.
” I talked to [defence minister Lorenzo Guerini] and I think he’s very clear about it, âhe added.
Guerini has been more cautious in his public statements and several officials in Rome said a solution was not easy because it is in Italy’s interest to be part of a Franco-German project to build the so-called European main battle tank.
Supporters of a deal say it would help Italy’s defense capability by reducing production costs and be a tangible sign of increased European cooperation in the defense sector. Critics say Italy would indeed help France rid itself of a major arms-manufacturing competitor while endangering Italian jobs.
Mistrust between French and Italian companies has led to protracted takeover battles – as well as some resentment – in the past. “French industrial groups have bought out many Italian companies,” said Philippe Moreau Defarges, former diplomat and senior fellow at the think tank of the French Institute of International Relations.
In luxury in particular, French businessmen like Bernard Arnault and FranÃ§ois Pinault have swept away iconic Italian brands, adding Loro Piana, Bulgari and Gucci to their empires.
The Italians have also raised concerns about the merger in the automotive sector between FCA and PSA of France to form Stellantis. Paris, unlike Rome, has a minority stake in the combined group which they believe will help it better defend French production plants and jobs.