Can Italy Become a Big Player on Iran?

Over the past three years, Italy has lacked an influential role on the Iran file. But since Mario Draghi’s government has been in power – and the administration of Joe Biden has changed gears on Iran – Italy has signalled that, once again, it wants to feature among the key players on this crucial but complex issue. Whether it manages to do so will depend on the steps it is prepared to take.

A Dissenting Europe

Since 2018, the so-called E3 countries (France, Germany and the UK) have led a policy towards Iran which has been aimed at preserving the 2015 nuclear deal (also known as the JCPOA, or Joint Comprehensive Plan of Action), notwithstanding the US’s withdrawal and reimposition of sanctions. Together with former High Representative of the EU Federica Mogherini, the three leading European countries deemed the agreement ‘a key achievement of the global nuclear non-proliferation architecture’, disassociating themselves from the measures adopted by the US under former President Donald Trump during his ‘maximum pressure’ campaign against Iran.

Between 2019 and 2020, the E3 undertook several measures to ensure the survival of the deal. The main one was the creation of INSTEX, a trading mechanism which was supposed to facilitate legitimate trade with Iran despite US sanctions, but which remained largely ineffective.

Another significant step was the launch of EMASOH, the European-led maritime surveillance mission in the Strait of Hormuz. The initiative, under the leadership of France, aimed at complementing existing maritime security efforts while avoiding any connection to the US-led mission (the IMSC, or International Maritime Security Construct) and Washington’s maximum pressure campaign. The goal was to lower tensions in the Gulf between Iran, the US and its allies in the region.

Italy’s Low Profile During Conte’s Governments

Italy’s role in both initiatives has been minimal: in contrast to other EU states, and notwithstanding then-Prime Minister Giuseppe Conte’s commitment ‘to enhance the EU's financial mechanism’, Italy never became a member of INSTEX, judging the mechanism unlikely to be successful in improving legitimate trade with Iran but also considering it too provocative towards the US. On EMASOH, while Rome decided to support the mission politically, it did not provide any contribution in kind, such as frigates or staff officers – unlike Denmark, the Netherlands and Greece.

The choice to maintain a low profile on Iran was driven by the hesitation of Italy’s former government to join other EU countries in taking a different – and at times confrontational – stance towards the US, even if it was to defend an agreement Italy itself deemed in its security interests.

There was an element of ideological solidarity to this stance as well. During his visit to the US in June 2019, then-Deputy Prime Minister and leader of the right-wing League party Matteo Salvini stated that ‘Italy’s relations with Tehran [had] changed, as it is impossible to maintain normal relations with a country that wants to destroy Israel’. This represented an effort to forge a common vision with the Trump administration and to distinguish Italy from other European countries. Generally, however, foreign policy, including in the Middle East, did not feature highly as a priority for the previous Italian government –not even in relation to security dossiers such as the Eastern Mediterranean and Libya, which have traditionally been at the core of Italy’s strategic concerns.

Renewed Interest but Hesitating Steps

Over the past three months, however, Italy’s approach to foreign policy has changed. Since the new government, led by former European Central Bank president Mario Draghi, has been in power, and despite the fact that Luigi di Maio of the populist Five Star Movement has remained its Minister of Foreign Affairs, Italy has reclaimed some of its foreign policy activism.

Draghi’s first trip abroad since taking office, for instance, was to Libya, signalling the importance the new government places on the country and the Mediterranean in general, in contrast with the previous administration. Italy has also joined the E3 and the US in foreign policy statements on countries ranging from Iraq to Syria and Yemen, again showcasing a break with the past.

On Iran, this new trajectory in Italy’s foreign policy has so far made very little difference at the public level. Relieved by the change in US posture towards Iran following the election of President Biden, and after nearly three years of silence, in January Italy stated its appreciation of the EU’s relaunched support for the JCPOA and declared that it was ready to endorse any initiative aimed at restoring the deal.

In March, behind the scenes, it offered to play the role of intermediary between Washington and Tehran on the nuclear issue. The offer was not taken up by US officials, who engaged in indirect talks with their Iranian counterparts in Vienna instead. Publicly, Italy’s steps have merely consisted of renewed statements in support of the deal and of efforts to facilitate its revival.

Plenty of Scope

Still, the visit by Iran’s Foreign Minister Javad Zarif to Rome on 16 May, the second leg of an official trip to Europe and his last tour before Iran’s presidential elections, provided the first opportunity for Italy to signal its readiness to play a bigger role on the Iran file beyond just statements. On this occasion, Di Maio merely stressed the importance of talks in Vienna and of a compromise over the JCPOA. He mentioned Italy’s interests in expanding bilateral ties in the political, economic and cultural fields, but without any concrete suggestions on how to do so, leaving the statement of intent somewhat moot.

There are areas in which Italy can make a difference and it should start actively working on those if it wants to be a key player on Iran. It can, for instance, facilitate a regional security dialogue, potentially through the diplomatic track of the EMASOH mission, which aims at ‘identifying ways to de-escalate tensions and to promote confidence-building in the maritime domain’, by engaging with regional countries and EMASOH’s participating members.

This is especially important in the stages after a potential agreement on the JCPOA, and constitutes a key priority for all states involved. Rome could also invest its political capital in trying to restart the E4 talks, which have stalled since late 2019 but which, up until then, enabled Italy – together with the E3 – to engage with Iran on regional issues at the level of Political Directors.

In preparation for the prospect that talks in Vienna result in a compromise on the nuclear deal, Italy should also explore ways to set up credit lines and guarantees for exports to Iran, along the lines of the Master Credit Agreement between Invitalia Global Investment and Iranian banks announced in 2016. This would facilitate the resumption of trade between Iran and Europe following the lifting of sanctions. Finally, Italy should explore ways to make INSTEX-like mechanisms more efficient in the future, preparing for the possibility that a future US administration adopts a divergent policy from the EU and increasing the chances that such instruments can enable legitimate and sustainable economic ties – not just with Iran, but with all countries that Europe deems in its interests, regardless of the US’s stance.

Without any of these steps, and despite the efforts of Prime Minister Draghi to return Italy to being a major player on the international scene, Italy is unlikely to make a difference on the Iran file and will instead continue to linger on the margins.

The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.