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Italian Interests and Policies


in Central-Eastern Europe and in the Balkans


Lieutenant General Carlo Jean




Introductory Remarks
Italy and Central-Eastern Europe
History's Weight and Opportunities
Political and Security Interests
Economic Interests
Conclusions
Summary




Introductory Remarks

When speaking of national interests, it may be advisable to provide a
precise definition of the phrase. By its nature, its meaning is
ambiguous,
so that this expression used to be censored and banned from the Italian
public debate. However, the phrase "national interests" refers to a
crucial concept which, at least implicitly, lays at the very basis of
any
foreign policy goal.

Interests are not objective or deterministic, although they are defined
on
the basis of domestic and international influence and opportunities as
well as on strong and weak points both of a material character and
relating to the political and institutional systems. Opting for one
particular interest or policy means giving up other interests and
policies. Political, diplomatic, economic and military resources are
always limited. Therefore, an interest cannot merely be defined in
absolute terms. It must also be viewed in comparative terms. In defining
national interests and policies, the availability of adequate resources
to
implement them must be taken into consideration. An interest is such
only
if it can be achieved. If not, it is a mere wish or just empty talk.

Moreover, interests are influenced by the time factor. Short-term
interests usually differ and sometimes widely diverge from long-term
ones.
The present concurrence of radical geo-political, demographic, social
and
technological changes has dramatically accelerated the pace of domestic
and international developments. Therefore, global and long-term
forecasts
and projects have acquired a far more crucial significance than they
used
to have. Italian politics must widen its time horizon through adequate
institutional reforms, and the various Ministries involved in foreign
policy must improve their forecast, planning and inter-sectorial
cooperation capabilities. The planned institutional reforms - such as
the
proposed Foreign Ministry reform and the creation of a foreign policy
planning and coordination body at the Presidency of the Council of
Ministers - seem to indicate that the Italian situation in this respect
may rapidly improve.

This essay focuses on Central Europe and the Balkans only. However,
since,
as it was mentioned above, interests and policies have a global
character,
Italy's future prospects, vocations, limits and potential capabilities
are
shortly outlined in order to provide the wider context needed to fully
understand sectorial and regional evaluations. A brief account of past
Italian policies in the area is also provided, because historical
experience is bound to affect present perceptions in Italy, Central
Europe
and the Balkans. An evaluation of Italy's security and economic
interests
follows. Lastly, the potentials of the policies Italy can implement are
analysed, with special reference to the Central European Initiative,
which
Italy identified as a key component of its "Ostpolitik" at the Graz,
November 6-8 1996 meeting.

Italy and Central-Eastern Europe

A cursory glance at a geographical map conveys the impression that Italy
is a Mediterranean country or, at least, a Southern European country, an
appendix of Central Europe. Some even claim Italy's "insularity" and -
although not going so far as to propose a revival of the "mare nostrum"
concept - state that Italy's national identity can find its full
expression in the Mediterranean only. According to this approach, the
Balkans and Southern-Eastern Europe belong to the East rather than to
the
West or, at least, to a gray area between the two.

However, if physical geography and historical reminiscences of the Roman
Empire, the sea-faring Republics and the Middle Ages are put aside and
if
the present and possible future fluxes are taken into consideration -
that
is, if a geopolitical approach is adopted - the resulting evaluation is
quite different. Italy is a European rather than a Mediterranean, a
continental rather than a maritime country. Its weak and its strong
points
in the Mediterranean (merely in terms of foreign trade shares) clearly
indicate that it has a role in the South only because it belongs to the
North. The huge problems and conflicts in the Mediterranean are
incompatible with Italy's limited political, economic and military
resources. Italy can play a role in the area only by taking part in
common
initiatives within a EU and NATO framework. The Mediterranean is
extremely
important and even crucial for Italy, from the points of view of
non-military threats (e.g. migration waves), of its energy sources and
of
the economic prospects offers. However, Italy will be able to exploit
these opportunities to the full only when the cost of labour in Eastern
Europe will increase to the point that Italian companies will be induced
to transfer their labour-intensive productions southwards. In turn, such
a
development will be possible only if this latter area offers acceptable
stability conditions. If not, there will be no alternative but a
separation policy, i.e. a Bysantium-style grand policy rather than a
Roman-style grand policy based on cooperation and integration.

Whilst Central-Eastern Europe and, in the longer run, the Balkans, are
bound to become fully integrated in the Western system - since this
process is but a "return to Europe", as Milan Kundera defined it - the
South has much fewer integration prospects. Whilst the East wants to be
absorbed into the West, the South claims its own identity and cultural
specificity as distinct from and even in conflict with the West. Since
it
will never become a part of Europe, it cannot achieve as much importance
as Eastern Europe and the Balkans.

Although Eastern Europe's problems are admittedly serious, the Middle
Eastern and North African ones are far worse. Since Italy's resources
are
limited, it has no choice but to take part in common initiatives within
Europe and NATO (Barcelona, MENA Economic Summit, CSCM, PFM, etc.). In
this respect, the main risk for Italy is being isolated or marginalized
in
the Mediterranean, although the present situation is quite different
from
that of the period when the slogan "let us cling to the Alps" was
popular.
Should Europe be dominated, in the future, by the so-called "Weimar
triangle" (France, Germany and Poland), with which Spain is apparently
developing increasingly close links, the consequences for Italy might be
much more disastrous than those of its exclusion from the Contact Group
for the former Yugoslavia - which may even have been a piece of luck,
because it has left a larger room for manoeuvre to Italy or, at least,
has
dissociated Italy from the meager results of the former.

On the other hand, in Central-Eastern Europe and in the Balkans, Italy
has
greater competitive advantages (for instance, as far as the volume of
foreign trade is concerned, it ranks second in the former area rather
than
fourth as in the Mediterranean). Since the end of the Cold War, Italy
has
rediscovered the geo-politics of pre-unitarian states and, especially,
their links to Central-Eastern Europe, Russia and Ukraine. The Adriatic
Sea is turning into a kind of internal lake connecting the Italian
Peninsula with the Balkans. Moreover, it is becoming the only route -
apart from the Trieste-Ljubljana-Budapest axis - leading to
Central-Eastern Europe.

As was authoritatively stated, "the European circle remains our priority
and implies a twofold line of deepening the Union and widening it to the
East". The strategic priority in Italy's foreign policy lies in Central
Europe and in the Balkans. This objective must be transformed into a
real
"Italian Ostpolitik". Priorities must be global. Convergent - and
therefore compatible - policies must be defined in the various sectors.

Furthermore, Italy is a medium power. Therefore, it cannot confine
itself
to implementing a regional policy, as it may have done in the past. It
has
global interests, and it must pursue them by exploiting its potential,
which is undoubtedly greater in trade than in the political or military
sectors. Strengthening its relations with Eastern Europe may enable
Italy
to play a greater role in Europe, especially in view of EU's
enlargement.
In this respect, we do not share the frequently voiced opinion that the
"loss of a barycentre", that is, EU's and NATO's enlargement to Northern
Central Europe alone, must be regretted. We believe that this
enlargement
may be beneficial for Italy, provided that it succeeds in replacing the
ecumenist and Third-worldist aspirations marking its foreign policy
rethorics and a large part of the domestic political background, with a
comprehensive, consistent definition of Italy's interests and policies
towards Central-Eastern Europe and the Balkans, and that adequate
efforts,
resours and political attention are devoted to their implementation.
These
interests don’t consist in the creation of a political sphere of
influence, but in the economic integration not only to expand the
Italian
economy, but most importantly to increase the stability in an area
strictly linked to the Italian security. For this reason Italy strongly
supports the rapid entering of Slovenia and Romania in the Atlantic
Alliance and in the European Union. The Central European Initiative is
an
instrument to support the implementation of this goal.

History's Weight and Opportunities

In the Risorgimento, Italy entertained very close relations with the
national movements in the Balkans, in Hungary and in Poland, as shown by
the number of volunteers from these countries who fought in the
Risorgimento wars and by the number of Italian volunteers who fought in
these countries' wars of independence. In the aftermath of World War I,
the Italian nationalist movement squandered this capital of friendly
relations.

Ironically, Italy's policy towards the former Yugoslavia has always
displayed a quality of contrariness: it was inflexible and aggressive
when
Yugoslavia was strong and enjoyed large international support, and it
was
hesitant and conciliatory when Yugoslavia was weak and isolated. In the
first post-war period, Italy backed Croat and Macedonian secessionism,
thus weakening Yugoslavia which, on the other hand, was a key element in
the balances developed in the Versailles and Trianon Treaties. It
supported Bulgaria and especially Hungary, that is, the countries which
wanted to change the status quo. It tried to compete with Germany's
penetration into the Danube and Balkan regions and backed Austria's
independence, thus helping to destabilize the European balances. As a
consequence, it became a vassal of Germany's and several of its
North-Eastern provinces were absorbed into the German Reich.

In the second post-war period, the situation improved considerably after
the territorial dispute with Yugoslavia was solved, especially with the
1975 Osimo Treaty. Relations with Belgrade were rapidly intensified, and
not only in the economic field. They also extended to politico-strategic
relations, since Yugoslavia had the role of a rampart between Italy and
the Warsaw Pact and helped maintaining stability in the Balkans, thus
increasing Italy's weight within NATO. Moreover, better relations with
Yugoslavia also brought about domestic benefits, since they made it
easier
to accept the defeat in the war and, especially, helped to create
cohesion
among the domestic political forces, and to ease clashes between the
majority and the opposition on Italy's international position.

Relations to Central-Eastern European countries, and especially Hungary
and Poland, were just as well-developed. Regarding Czechoslovakia,
relations were initially strained by a few negative episodes, such as
Radio Prague's aggressiveness against Italy and allegations that the
Czech
secret service was colluding with Italian terrorist groups. Relations
with
Bulgaria suffered a setback after the attempt on the Pope's life. On the
other hand, in the 1980's relations to Poland, which were already
intensive, were greatly boosted by the presence of a Polish Pope and by
the support provided by the Italian Catholic groups and Trade Unions to
the Solidarity movement. The latter undoubtedly played an important role
in undermining the Soviet Empire in Central-Eastern Europe, and in
determining its eventual collapse.

During the Cold War, Italy entertained fairly intensive relations to
Romania, which claimed to belong to Europe because of its Latin, rather
than Slav and Orthodox, heritage and pursued a policy of national
independence, didn’t participate to the invasion of Czechoslovakia and
cooperated with Yugoslavia reinforcing its non-aligned status. As a
whole,
during the whole Cold War period, Italy's relations with Central-Eastern
Europe tended to intensify in periods of detente with the Soviet Union.
However, ties remained close also in periods of high East-West tensions.

The current role of Italy's presence in Central-Eastern Europe as a
whole
and the favour it generally enjoys in the region stems from Italy's
"mini-Ostpolitik", launched in the 1950's by Fanfani and Gronchi, much
earlier than the great German "Ostpolitik" of the 1970's and 1980's.
Until
the collapse of the "wall", these two policies always converged and
displayed interesting factors of complementarity and synergy.

The various initiative which were adopted within this context - such as
the inter-regional agreements of Alpe Adria, marked by a strong
involvement of Bavaria, and the accords which led to the 1989 Budapest
declaration, which created the Quadrangular alliance (Italy, Austria,
Hungary and Yugoslavia) and shifted cooperation onto government level -
played an important role in weakening the Soviet external Empire and in
paving the way for more intensive and fruitful cooperation initiatives
after 1989, when Europe's geo-political division ended.

Discrepancies started with the end of the Cold War and the increasingly
tangible prospects of German re-unification, which gave rise, in Italy,
to
exaggerated fears that Germany would acquire a hegemonic role in the
whole
area, undermining Italy's position. This scenario gave rise to rather
incongruous reactions, such as the attempt to counterbalance the Weimar
axis, i.e. the "Paris-Berlin-Warsaw" axis, by creating a "Barcelona
(sic!)-Trieste-Ljubljana-Budapest-Kiev" axis. In this respect, an
"influence zone" concept was revived, according to which Italy and
Germany
were supposed to compete in the whole Danube-Carpatians area. It was
also
suggested that Italy might exploit the temporary weakening of Germany's
external-projection capabilities during its re-unification process in
order to consolidate its own position in the area.

At the outset, Italy mobilized considerable financial means to pursue
this
policy. However, the concept rapidly lost credibility when the
initiative
was extended north of the Danube, to the Baltic Sea. As Luigi Vittorio
Ferraris humorously put it, Italy was planning to build a Mitteleuropa
without Germany, which equated "making an omelet without eggs".
Yugoslavia's collapse as well as Italy's political and institutional
crisis and plummeting budgets greatly reduced the momentum of the
initiative, although it progressively expanded to reach its present 16
member and observer states.

Basically, the end of the Cold War and German re-unification have
radically changed the situation. Apparently, Italy has not yet fully
realized that it is one of the main "victors" of the Cold War and that
its
overall geo-political situation has altered with respect to the past,
not
only because of the collapse of its domestic "wall", but also because of
the vast opportunities that have opened in Eastern Europe. By
concentrating too much on its domestic problems and on its political and
institutional crisis, and by devoting too few attention and resources to
its foreign policy in what is a crucial period of transition in
Central-Eastern Europe, it runs the risk of losing vital opportunities
and
of reducing its role in the Western integration and stabilization of the
area.

The geo-political concepts of vital space, exclusive influence zones and
territorial expansion have lost all meanings. International economic and
political relations are no longer marked by a vertical and hierarchical
structure. At present, geo-politics is dominated by flows, rather than
by
space, and is marked by network structures. Each country's ability to
safeguard its own interests mainly depends on its involvement in the
networks and on its capability to attract flows. International relations
are no longer zero-sum games, and are increasingly becoming positive-sum
games. Contacts and cooperation have acquired decisive importance as
against competition for dominance and power. The new situation offers
vast
opportunities for Italy to develop its relations in the region.
Therefore,
Italy has a great interest in promoting the region's stability, order
and
development.

The definition of national interests and foreign policy options - also
in
the sector of military policy, either at national or multinational
level,
especially in European and NATO contexts - must be aimed at fully
exploiting Italy's potential in Central-Eastern Europe and in the
Balkans.
In this region, there are excellent conditions to develop cooperation
with
Germany, which shares Italy's interest in the rapid normalization and
integration of the whole area into the great Western institutions, such
as
the European Union and NATO. Italy's and Germany's "Ostpolitik" policies
would be enhanced by complementarity, rather than by competition.
However,
cooperation with Germany in Central-Eastern Europe requires that Germany
is prepared to pursue this line, which, for the time being, cannot be
taken for granted, although now all countries are following in the area
common European, rather than competitive national approaches.

Political and Security Interests

The disappearance of the Soviet threat has dramatically changed the
concept of security. Security does no longer imply defending one's
national territory against aggression. It involves maintaining stability
in order to enable Central-Eastern Europe and the Balkans to achieve
political and economic integration into the European regional system. If
politico-strategical stability were not achieved, their integration
would
be unfeasible, because high political risks would make private
investments
too expensive and because no stable economic cooperation would be
possible.

This basic interest, which Italy can pursue only by cooperating with the
other European countries which share the same objectives, is made even
more crucial by the fact that an outbreak of ethnic and identity-based
conflicts and the deriving destabilization of the whole Balkanic area
may
result in uncontrollable migration tides and in an intensification of
fundamentalism and terrorism which are bound to directly involve Italy.

Lastly, this development might result in strife within the alliances in
which Italy is a member and, domestically, in tensions between ethical
and
humanitarian claims and the need for a "Realpolitik" which keeps into
account Italy's national priorities and scant public resources.

The need to prevent conflicts which would be bound to involve Italy also
stems from the country's political and military weakness, although so
far
Italy has erred on the side of caution, taking tardy and limited
actions.
In particular, Italy's refusal to take part in the British-French Rapid
Reaction Force seems wholly unjustified.

These problems do not confine themselves to the Balkans - from Bosnia to
Kosovo and Macedonia - whose conflicts may destabilize the whole
Adriatic
region and extend to Albania, Bulgaria, Greece and Turkey. Other
potential
dangers are the presence of Hungarian minorities in Romania, Slovakia
and
Vojvodina and, although to a lesser extent, the tensions between Greece
and Turkey and between Bulgaria and Turkey.

Intensive Italian engagement in the multilateral actions organized to
solve these problems - both peace-supporting operations and political,
economic and humanitarian initiatives - can help maintain Italy's
presence
in the whole region, promote Italy's role in Europe, improve its tainted
national image and, more practically, safeguard its national interests
in
the EU and in NATO.

In defining Italy's policy in the region, the key point to be considered
is the implementation of an order in former Yugoslavia which can be
maintained in the long run, after the withdrawal of Western forces from
Bosnia. At that date, the risk of conflicts breaking out in Kosovo,
which
implies even greater dangers for Italy, will increase. The problem,
however, reaches much further. It also involves NATO's and EU's eastward
enlargement as well as US-Russian relations and interests in the Balkans
and in Central-Eastern Europe as a whole. In this respect, short-term
interests often diverge from long-term ones, and sub-regional interests
often clash with regional or pan-European interests.

In the case of Bosnia, it is obvious that stability could have been
attained much more easily, in the short period, by partitioning Bosnia
between Serbia and Croatia or breaking it up into three ethnically
"pure"
states than by the Dayton solution of creating a multi-ethnic state
which
imposes coexistence on people who do not want to coexist. However, the
two
former options do not only clash with Western values and principles.
They
are also liable to fuel instability in the long period. A similar
discrepancy emerges as far as the debate on war criminals in Bosnia is
concerned. If NATO forces had been entrusted with the task of hunting
down
and arresting war criminals, attacks and retaliations would have
certainly
ensued, jeopardizing NATO's presence in Bosnia and, therefore, the
likelihood of putting a stop to the conflict. However, in the longer
period, only the arrest and the trial of war criminals by the Hague
Supreme High Court can be a decisive factor of stabilization. Should
local
courts submit war crinals to trial, their verdicts would be considered
biased and retaliatory and would trigger further reprisals or even
large-scale guerrilla and terrorist initiatives which have not yet taken
place in the former Yugoslavia.

It seems justified to accuse the international community of following an
inconsistent strategy, which is oriented to the long term
(multi-ethnical
Bosnia) on the one hand, and on the short period on the other (failed
arrest and trial of war criminals). However, it must be pointed out
that,
de facto, NATO has carefully avoided any decisive actions in issues
which
could help, at least theoretically, to create a really multi-ethnic
Bosnia, such as, for instance, the repatriation of refugees. In this
respect, doubts have emerged on whether implementing multiethnicity
really
is the truly objective of the international community.

Italy's action has been balanced. Its maintaining relations to Beograd
and
its refraining from the anti-Serb hysteria which marked many other
Western
states have been an advantage for the international community as a
whole.
Italy's line, far from deriving from Machiavellian considerations,
merely
stemmed from a pragmatic assessment that there were two options
available:
either imposing an international mandate on all the former Yugoslavia
for
an indefinite period of time, or seeking an agreement with all the
involved parties. Since the former option was wholly unrealistic, the
second was to be adopted. On the other hand, it must be highlighted that
many of the critics of the meetings between Italian Foreign Ministers
and
Serb President Slobodan Milosevic were the same people who greeted the
attack on Moscow's White House and the accession of Russia into the
Council of Europe! Should their motives be analysed, it might be
discovered that the "Idealpolitik" facade really concealed a
"Realpolitik".

Easing the international attitude towards the Serbs and promoting
Beograd's return into the European institutions, starting with OSCE and
the Central European Initiative, is not only in the Italian interest. It
can help ensuring long-term stability in the Balkans. The recent
anti-Milosevic demonstrations organized by students and workers in
Beograd, although unlikely to bring about a political change, are
helping
to improve the image of the Serb people, who used to be consistently
criminalized, in the eyes of the international public. This may provide
a
starting point to face Serbia's basic problems with realism - in the
style
launched by the American negotiator, Richard Holbrooke - and help it to
join Europe, to which it, too, belongs.

A plan which seems to completely fulfil the objective of stability in
the
Balkans is the so-called Euroslavia project. Its goal is not to impose
anything or to rebuild a new Yugoslavia, not even according to a smooth
confederation model. It aims at re-establishing economic relations among
the various Republics, promoting development in order to damp down the
conflict and preparing the whole area for association and, in the long
term, integration into the European Union. The direct or indirect
actions
which are being carried out by the Italian diplomacy to prevent a
conflict
in Kosovo should be comprised into this project, intensified and, if
possible, coordinated with similar US and EU initiatives.

Should the situation in Kosovo break down, a consequent mass migration
of
a few hundred thousand people might deteriorate the situation to
breaking
point throughout the Balkans. If the migrants flowed into Macedonia,
they
would destabilize the present situation there. If, on the other hand -
which is much more likely, since the Serbs would block all entries into
Macedonia to prevent the situation from worsening - the refugees headed
into Albania, they would trigger a "domino effect" resulting in an
immigrant tide to Apulia on a scale which would make the 1991 "invasion"
pale in comparison.

Besides pressurizing Beograd into accepting a reasonable and
internationally-guaranteed autonomy for Kosovo, there is an immediate
need
to start preparing for the worst case. It would be reasonable to draw
plans for an emergency logistic intervention and especially to promote
turistic development on the Albanian coast, in order to host possible
refugees in Albania and eventually repatriate them into their regions of
origin. The project may be funded through new allocations in line with
the
Italian Bill on Frontier Areas, which should be extended to the whole
Adriatic Sea, by relaunching the Adriatic Initiative and by coordinating
it with the Central European Initiative.

The Euroslavia and the Kosovo projects undoubtedly have an utmost
priority
and must be granted full political and financial support despite the
current budget difficulties. They are not merely to be viewed as
insurance
premiums. They are actual investments, since Italy has a strong
potential
interest in the development of these regions.

Another critical problem for Italy is NATO's - and, in the longer
period,
EU's - eastward enlargement. Actually, the enlargement is the only way
to
consolidate US presence and engagement in Europe, which are essential
both
to preserve balances in Europe and in the Mediterranean and to ensure
political and strategic links between the Mediterranean and Central
Europe. NATO's enlargement can increase internal stability, which is an
essential prerequisite for economic development, and can especially
prevent divergencies in the policies of the various Western European
states, such as those which had the well-known negative effects in
former
Yugoslavia. Rather than an enlargement proper, this process can be
defined
as the re-absorption into Europe of countries which had been separated
from it by the Cold War.

Whilst Germany has a direct interest in the enlargement of NATO to the
Visegrad countries, Italy attaches great importance to the accession of
Slovenia and Romania (and Bulgaria, if it applies) into NATO in the
first
group. Slovenia's membership is important in that this country provides
a
link between Italy and Hungary. The recent intensification in relations
among Italy, Slovenia and Hungary ("Trilateral") within the Central
European Initiative mirrors this basic Italian interest, which is shared
by Slovenia and Hungary. The same interest emerges in the Italian
Defence
Minister's proposal to create joint German-Italian units which should be
open for participation to Austria, Slovenia, Hungary and possibly the
Czech Republic. To date, Germany has not taken the proposal into
consideration, although its implementation would provide a clear signal
that it is not pursuing hegemonic interests in Eastern Europe. An
increased military cooperation has been therefore forecast in the
framework of the "Trilaterale".

Furthermore, Romania's accession into NATO would prevent Turkey from
being
isolated in the Black Sea region. On the other hand, its exclusion may
increase the existing tensions in the Hungarian minority in
Transylvania,
who would view it as a first step towards exclusion from Europe.
Logically, this interest should lead to greater Italian preparedness to
cooperate in the military sector, too. For instance, it should take part
more intensively in joint activities within NATO's "Partnership for
Peace"
project and, if necessary, provide additional funding to NATO's common
infrastructure programme. The latter should be coordinated with the
construction of the road and railway axes which are to link the Adriatic
Sea with Hungary on one side, Serbia and Romania on another and
Macedonia
and Bulgaria on a third side.

However, initiatives to prevent NATO's selective enlargement - which is,
in a certain sense, paradoxically, confined to the most stable
countries,
that is, to those which have less urgent need of NATO guarantees - from
creating insecurity and instability in the excluded applicants should be
implemented as soon as possible. The Central European Initiative may be
an
adequate forum to discuss these problems before they become explosive.
As
much is also proved by the fact that the Central European Initiative was
acknowledged to have the potential not merely to prepare Central and
Eastern European countries for prospective association and membership
into
the European Union, but also to implement security objectives typical of
OSCE, which took part in the November 1996 Graz meeting with observer
status.

Economic Interests

The economic importance of Central and Eastern Europe and of the Balkans
for Italy has recently been highlighted by the Agnelli Foundation in a
report of the series "Nuova Geoeconomia". Over time, the whole area is
bound to be associated and eventually integrated into the European
Union.
All the Italian Regions, and especially the Adriatic-rim ones, will
derive
great benefits from it. Integration is facilitated both by geographical
proximity and by similar basic values. The return to Europe is a central
goal for the peoples of Central-Eastern Europe and the Balkans and
features in the political programmes of ruling and opposition parties
alike.

Italy has a strong interest in the rapid and full integration of the
whole area. Apart from obvious political and security reasons, its
economic position will become more competitive as a result. Small and
medium Italian companies have already shifted many sectors of production
which are labour-intensive or directed to the lower market niches in the
area. The flexibility of small and medium companies makes them
particularly able to penetrate and cooperate with the markets of the
area,
which are characterized by considerable fluctuations.

Regarding volume of trade, Italy ranks second after Germany in the
Eastern
European markets and first in the Balkanic peninsula and in
South-Eastern
Europe. Moreover, it has a strong potential to increase its trade in the
area. According to recent estimates, it may not only consolidate its
position, but also gain market shares as compared to Germany.

Italy will be able to fully exploit this trade potential only if it
steps
up its engagement in the sectors of development aid, public support to
exports, banking and insurance. Therefore, an important national
interest
- which, obviously, is not merely confined to Central-Eastern Europe and
the Balkans - is providing the "system-country" with adequate means to
face regional and global geo-economic competition. This objective can
only
be achieved by relinquishing Italy's conservative and obsolete welfare
state policy. This process is strongly supported by the present Italian
Government.

Italy's economic penetration in the area, too, is complementary, rather
than competitive, with Germany's. As a consequence, cooperative rather
than competitive policies may be pursued in the economic sector, too,
and
the two countries' initiatives may be coordinated both at a bilateral
level and within the EU and the world's economic institutions. The
spectre
of a Mitteleuropa viewed as Germany's exclusive influence and hegemony
area seems a myth with no real foundations.

The sector which deserves the most intensive and determined efforts is
that of large infrastructure projects - especially roads and railways,
but
also the ambitious project of a navigable waterway connecting the rivers
Isonzo and Danube. All these projects would connect the Adriatic Basin
with the Danube and, further eastward, with Ukraine and Russia. The
opening of the Rhein-Danube canal and the future opening of the
Danube-Oder waterway give a competitive edge to the North Sea and Baltic
harbours as against the Northern Adriatic ones. Moreover, the latter are
not yet coordinated so as to achieve economies of scale. In short, they
lag well behind as compared to the improvements in the transport system
north of the Alps.

Besides their economic role, infrastructure projects also have political
importance. For instance, the growth of Euroslavia is mainly based on
them. Clearly, Italy cannot sustain these projects alone, but should
promote them within the European Union. Visions and integrative
proposals
tailored to the specific situation of the Balkans and South-Eastern
Europe
are needed, as is already happening as far as Central Europe is
concerned.
Delays in this respect may undermine Italy's competitive advantages in
the
whole region.

Conclusions

So far, in Italy, the impact of the end of the Cold War and of the
deriving changes in Central-Eastern Europe and in the Balkans has not
been
fully understood. As much has hampered a far-sighted definition of
Italy's
national interests and foreign policy regarding this region, which has a
crucial role for Italy because of its geographical proximity and of
Italy's intensive present and, especially, potential economic relations
with it.

These deficiencies have partly been determined by regional and local
pressure, especially regarding relations with former Yugoslav republics;
by Italy's political and institutional crisis, which has drawn attention
almost exclusively to domestic problems; by the fact that single issues
such as the problem of the properties of Istrian and Dalmatian exiles,
which, although undoubtedly important, should have been viewed within a
more far-sighted context, have been unduly exploited for domestic policy
objectives. In the recent past, the Italian diplomacy has found itself
in
the embarrassing situation of seeing Italy depicted as a potentially
destabilizing, revisionist state which wished to carry out an arrogant
power policy it could not afford unless at a very local level. Italy's
exclusion from the Contact Group undoubtely was partly due to its image
as
an overly ambitious country incapable of carrying out realistic and
long-term projects.

The "collapse of the wall" has radically changed the very foundations of
Italy's "Ostpolitik", the strategic role of the Balkans and the role of
the regional or bilateral initiatives in which Italy took part.

Only recently, a clearer perception of Italy's interests in the area and
a
greater coordination of Italy's, Germany's and Austria's policies has
apparently begun to emerge. Complementarity should be maximized in the
place of competition, both because the latter - being based on past
geo-political logics - would be ineffective, and because Italy does not
possess the means or the political and diplomatic capabilities to
compete
with Germany. At most, it can implement a disturbance policy and occupy
marginal political and market niches. However, the level of cooperation
between Rome and Bonn is not yet optimal, partly because the Italian
initiatives of the late 1980's and early 1990's were often presented as
endeavours to contain German penetration in the Balkans and in Central
Europe. Obviously, the results were far from brilliant, although -
luckily
- not totally disastrous.

The recent relaunching of the Central European Initiative, its linking
with the Adriatic, the Balkanic and the Black Sea initiatives, the
intensification of relations with Slovenia and Hungary, which should be
rapidly extended to Austria, and possibly Croatia, seem to give a more
realistic character to Italy's role in stabilizing the area and
especially
in preparing it for progressive integration into Europe. Only within
this
framework can Italy's roles and interests be defined in detail and
satisfactory solutions be found also for the still discussed problem of
the Italian minorities in Slovenia and Croatia. This issue cannot
possibly
be solved but through the consolidation of these countries' democratic
institutions and economies in view of their rapid integration into
Europe
and NATO.

Summary

>>From a merely geographical point of view, Italy may seem a Mediterranean
country, due to its marginal position to Central Europe. Actually,
however, if geo-political and geo-economic trends are taken into
consideration, it is a European rather than a Mediterranean country.
Trade
and economic integration with the East play a far greater role for Italy
than those with the South.

Because of its political and military weakness, Italy's role in the
Mediterranean Basin is merely due to its membership in Europe and NATO.
Moreover, the solution to the most serious Italian problem - that of the
Mezzogiorno - cannot be found in the development of Southern
Mediterranean
countries, but in reinforcing Italy's ties with the North. Hence the
importance of Italy's relations with Central and Eastern Europe and with
the Balkans.

For Italy, from the geo-political point of view, there is no difference
between Central and Eastern Europe and the Balkans, both of which are
linked to the Italian peninsula by an inner lake - the Adriatic Sea -
which is a transit area for both regions.

Italy does not pursue a power policy or the goal of creating exclusive
influence zones. It has adopted, in coordination with Germany, a
cooperative policy whose aim is restoring societies and economies in the
whole area in order to promote both its trade interests and these
countries' stability and development.

To attain these goals, the Central European Initiative was relaunched
during its November 1996 meeting in Graz. Special cooperation ties have
been established with Hungary and Slovenia and a comprehensive programme
to improve the transport network through Slovenia and the Balkans has
been
developed. It has to be implemented by a reinforced cooperation with all
the former Yugoslavia Republics and the countries of South-Eastern
Europe,
avoiding any new dividing line between the North and the South.

---

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