Italy’s Mediterranean Belt and Road
Taking a page from Beijing, Rome is positioning itself as the center of trade, energy, and transportation in Southern Europe and beyond.
Rome is rising over the Mediterranean, this time as an economic power. Whereas 2020 focused international attention on Italy’s plight as the epicenter of Europe’s initial COVID-19 outbreak, in 2021, Rome has emerged as Europe’s fastest-rising economic power in the wider Mediterranean region, from North Africa to the Balkans and beyond. Two-decades in the making, Italy’s focus on trans-Mediterranean commercial connectivity has achieved something akin to a Mediterranean version of China’s Belt and Road Initiative, with Italy at the center.
Termed il Mediterraneo allargato (“the enlarged Mediterranean”), the map of Italy’s rising 21st-century commercial prowess looks a lot like the first-century map of the Roman Empire. And just as other powers had to bow to that empire, because the post-Brexit European Union’s economic engine now consists of Germany, France, and Italy, the extent to which Paris and Berlin accommodate Rome’s wider Mediterranean agenda will determine the EU’s ability to function coherently, with repercussions for the NATO alliance as well.
Italy traditionally maintains three foreign-policy pillars: Europeanism, Atlanticism, and Mediterraneanism. But Rome has recently been putting more and more of its strategic eggs in the Mediterranean basket. That decision was made explicit in January 2018, when then-Italian Defense Minister Roberta Pinotti reassigned Italy’s troops deployed in Iraq and Afghanistan to missions in Libya and Niger, famously explaining Italian strategic priorities: “the heart of our interventions is il Mediterraneo allargato, from the Balkans to the Sahel, to the Horn of Africa.”
Rome’s bet on the wider Mediterranean has paid off. As the EU emerged from its debt crisis in 2012, Italy surpassed France to become Europe’s second-largest manufacturer. The value of its sold production exceeds France’s by approximately one-third. And much of its export flow goes to Mediterranean markets; its exports to those areas outstrip its exports to both the United States and China.
In the coming years, il Mediterraneo allargato is set to get even bigger. In 2019, Italy and Turkey agreed to form a Turkey-Italy-Tunisia transportation network that slices across the center of the Mediterranean, creating an arc of commercial connectivity from the Maghreb to the wider Black Sea. The corridor’s central hub is Italy’s deep-sea port of Taranto, located on the Italian peninsula’s southern tip in the strategic heart of the Mediterranean Sea, and container transport service began on the Turkey-Italy-Tunisia corridor in early July 2020.
The Taranto-Tunisia segment of the network forms a major link between Europe and Africa, by connecting North Africa’s coast to the major markets and manufacturing centers of Italy, Germany, and even Scandinavia. From Tunisia’s ports, the corridor can also connect Italy to Algeria and on to the Trans-Sahara Highway, potentially extending Italy and Turkey’s Europe-to-Africa corridor southward into West Africa as far as Lagos, Nigeria. With Italy facing the prospect of being the gatekeeper of European trade to Africa, perhaps all roads may again lead to Rome.
Beyond trade with Africa in manufactured goods, Italy has also established an energy empire there. The effort has been spearheaded by Italy’s energy giant Eni, under the de facto control of the government in Rome by virtue of the Italian government being the single largest shareholder. Eni controls about 45 percent of Libya’s oil and gas production and is one of leading foreign partners in Algeria, Africa’s largest natural gas producer. Together with Algeria’s state oil company Sonatrach, Eni jointly owns the 1 Trans-Mediterranean pipeline that takes Algerian natural gas through Tunisia to Italy. Meanwhile, Italy will soon finish the process of connecting its electricity grid to energy-rich Algeria via Tunisia with the completion of the 192-kilometer-long, 600-megawatt undersea cable between Tunisia and Sicily. Once that is complete, Italy will be able to look to the Maghreb nations to balance its supply and demand instead of solely relying on electricity exchanges with its European neighbors across Italy’s northern borders.
Italy’s reach also extends to the Eastern Mediterranean, where Eni is 50 percent owner and operator of Egypt’s massive Zohr offshore natural gas field, the largest in the Eastern Mediterranean. Eni also owns a 50 percent stake in one of Egypt’s two liquefied natural gas plants and is the leading operator in Cyprus’s offshore natural gas exploration. From infrastructure construction to weapons sales to consumer exports, Italy has become a dynamic force around the southern and eastern rims of the Mediterranean.
On the northern shores of the Mediterranean in Southeast Europe, Italy is also an energy top dog with its influence over the Trans Adriatic Pipeline, which came online this past November, and trade. For the Western Balkans as well as EU members Bulgaria, Croatia, and Romania, Italy is a top trade partner. In 2018, Italy’s exchange with the Western Balkans stood at $11.4 billion. After Germany, Italy is the leading commercial partner of Romania, which has the EU’s sixth-largest population. In 2019, the country was also the third-largest economic partner of Bulgaria, with bilateral trade to the tune of over $5 billion, and second-largest of Croatia, with its $6.3 billion volume almost matching Germany’s $6.6 billion.
As with the other regions of il Mediterraneo allargato, Italy has a large investment footprint in Southeast Europe. There, manufacturers have taken advantage of seamless access to the EU market—thanks to membership in the bloc or, in the case of the Western Balkans, free trade arrangements—to relocate production. To be sure, if you are an Italian clothing and apparel business, for instance, it is cheaper to set up shop in Southeast Asia than in Romania or Serbia, where labor costs are higher. Yet having your production facilities next door allows you to import in much smaller batches and be able to respond to fluctuations of demand and fashion trends more easily. The automotive sector works in similar ways. And when it comes to banking, many Italian banks have taken over control of Eastern European ones, like Serbia’s Banca Intesa Beograd and Croatia’s Privredna Banka Zagreb.
With its economic interests spanning several political fault lines in the wider Mediterranean, Italy has had to navigate a variety of conflicting geopolitical imperatives. While its energy interests in Libya incline Rome to side with Turkey over Egypt in the central Mediterranean, Italy’s deep energy partnerships with Egypt and Cyprus place Rome and Ankara on opposite sides of the fence in the Eastern Mediterranean. Although Italy’s foreign policy often seems haphazard, and may at times actually be so, Rome’s primary objective has been to finesse the geopolitical contradictions.
On that score, Rome has been inclined to assume the role of conciliator and seek out synergies with global powers such as Beijing and Moscow, which have been making concerted efforts to expand their influence in the wider Mediterranean region. State-owned Russian energy giant Rosneft is a 30 percent partner with Eni in the Zohr natural gas field, and Eni partners with both Rosneft and Gazprom in the production and transport of natural gas across the Black Sea. The relations with China run even deeper. Italy’s Mediterraneo allargato strategy, with its focus on energy and commercial connectivity, shares a geopolitical resonance with China’s Belt and Road Initiative. With the signing of the March 2019 Belt and Road memorandum between Rome and Beijing, Italy became the first major European country to formally sign up for China’s massive commercial connectivity enterprise.
As a trading nation on the rise, Italy has chafed at France’s efforts to limit Italy’s ability to expand its markets around the Mediterranean basin as well as Berlin’s deference to Paris in setting the EU’s policy agenda in the region.
EU solidarity in the face of Beijing and Moscow’s growing influence will require Brussels, Berlin, and Paris to better heed Rome’s interests as a power player in trans-Mediterranean commercial connectivity. Otherwise, Italy may opt to partner more deeply with Europe’s rivals as it continues to advance its economic rise across the wider Mediterranean.
Michaël Tanchum is a professor at the University of Navarra in Spain and a senior fellow at the Austrian Institute for European and Security Policy. He is also a fellow at the Truman Research Institute for the Advancement of Peace, the Hebrew University of Jerusalem, and at the Centre for Strategic Policy Implementation at the Baskent University in Ankara. Twitter: @michaeltanchum
Dimitar Bechev is Research Fellow at the University of North Carolina at Chapel Hill and Senior Nonresident Fellow at the Atlantic Council. He is the author of Rival Power: Russia in Southeast Europe (Yale University Press, 2017).