This is an audio transcription of the FT press briefing podcast episode: Italy’s tough new approach to Russia

Joanna Kao
Hello from the Financial Times. Today is Monday, May 2, and it’s your FT News Briefing.

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EU officials are discussing their toughest sanctions yet against Moscow, and one of Europe‘s biggest member states is no longer so sympathetic to Russia.

Amy Kazmin
It is simply no longer possible to find excuses for Moscow. Moscow as a market of interest is probably long gone.

Joanna Kao
And we’ll tell you about a shareholder campaign to get big food companies to up their game on health and nutrition. I’m Joanna Kao, for Marc Filippino, and here’s the news you need to start your day.

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EU energy ministers are holding an emergency meeting today, and they are discussing Russia’s decision to cut off gas supplies to Bulgaria and Poland. It comes as the EU tries to reach an agreement between the various member states to ban Russian energy. Hungary‘s prime minister said he would not support a ban on Russian gas or oil. But Germany is demanding a gradual ban on Russian oil. Berlin’s willingness to speed up its timetable increases the likelihood of a full EU oil embargo.

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For decades, one of Russia’s biggest allies in the EU has been Italy. Even after Russia invaded Crimea in 2014, Italian companies resisted sanctions. And then Prime Minister Silvio Berlusconi traveled to Crimea to drink wine with Vladimir Putin. But the war in Ukraine was a turning point. I spoke to our correspondent in Rome, Amy Kazmin.

Amy Kazmin
So look, Italy came out of WWII with the largest communist party in Western Europe, and it was part of the political establishment that helped write the Italian constitution. So, due to the communist type of influence in Italy’s domestic politics, Italy had a sort of affinity with the Soviet Union. And then, in the 1960s, Italian companies, including the state-owned energy company Eni, started doing business in the Soviet Union. And many Russian entrepreneurs have started to invest in Italy. And basically, there was a pretty strong connection. And then comes Silvio Berlusconi, who somehow sees Italy as a bridge between Russia and the West and somehow tries to help bring Vladimir Putin and Russia back from the cold. And Italy, because of its kind of close association and deep comfort level with Russia, had always been seen as sympathetic from Moscow’s point of view, more sympathetic than perhaps other countries.

Joanna Kao
And even after Putin invaded Crimea, Berlusconi still supported him. So what has changed now?

Amy Kazmin
Russia’s invasion of Ukraine was a huge shock for Italy. We also have the fact that Mario Draghi is the prime minister, and he is a former central bank president of the EU central bank. And he has a very different approach. He’s very committed to a kind of multilateralism, the European institutions, the, you know, the Atlantic relationship with America. He was actually at the forefront, very, very vociferously denouncing this as an attack on the entire post-war multilateral order. And he looks at this invasion like, I think he’s really, really appalled, like morally appalled.

Joanna Kao
And what about public opinion? Has that changed too?

Amy Kazmin
I think public opinion, of course, is quite appalled by the kind of brutality and the damage that is being done. There are very strong interpersonal ties in Italy. Nearly 236,000 Ukrainians reside in Italy. They play an important role in the economy. Many migrant workers in Italy are middle-aged women who are heavily involved in caring for Italy’s elderly population. So many Italian families actually have very strong personal ties to Ukraine through these guardians and caregivers and will, of course, have enormous sympathy for what is happening. And very many Ukrainian refugees went to Italy attracted by these links. Many Italians welcome Ukrainian refugees into their homes. And Draghi was also very firm about the kind of welcome given to Ukrainians and affirmed them as a very valued and important part of, you know, the Italian population and the community here.

Joanna Kao
So, Amy, more broadly, how significant is Italy’s withdrawal from Russia and what does it mean for the EU’s response to the war?

Amy Kazmin
So, at this point, Italy’s tougher stance makes it easier, faster, more decisive and more consistent for the EU to act. Of course, there is no total cohesion because you have Hungary, which is very close to Putin and Russia. But Italy is now somehow firmly in the mainstream of European opinion instead of being the kind of exception that argued Moscow’s case. So I think there is a very strong political commitment to reducing Italy’s dependence on Russia and Russian energy. And I think the business community sees the writing on the wall that there is now going to be an unraveling of this relationship forged over decades.

Joanna Kao
Amy Kazmin is the FT’s correspondent in Rome. Thanks Amy.

Amy Kazmin
Thank you so much.

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Joanna Kao
A group of investors recently pushed Unilever to release nutrient scores for its foods using external measurements. It was a big win over the company, which is known for Ben and Jerry’s ice cream and Hellmann’s mayonnaise and Lipton teas, among other products. The shareholders were coordinated by a non-profit organization called ShareAction.

Judith Evans
And that includes some pretty big players, Legal and General Investment Management, which is the biggest asset manager in the UK; BMO Global Asset Management, which is the funds arm of BMO Canada and several others.

Joanna Kao
This is the FT’s consumer industry correspondent, Judith Evans. She says this group is now targeting other multinational food companies like Nestlé and Kraft Heinz.

Judith Evans
So this problem has been there, sort of bubbling over for many years as obesity rates have risen. But much of the so-called ESG focus has been on climate for understandable reasons. However, there is a new focus on obesity and health after Covid-19, which affects obese people and people with conditions like diabetes worse than average. And governments have recently become more interventionist about it, introducing measures such as soft drink taxes and initiatives to promote physical activity and healthier lifestyles.

Joanna Kao
But Judith says food companies face a difficult balancing act.

Judith Evans
They obviously can’t come out and say, oh, we’re okay with obesity. And in fact, many companies have already reformulated their foods. There was a campaign in the UK to remove salt from bread in the early 2000s which is said to have saved many lives. But on the other hand, companies don’t want to lose their competitive edge by making their products just not tasty enough. And they also don’t want to come out and say, oh, yeah, now that you mentioned it, our foods are actually pretty unhealthy. So there are many pressures on these companies from many different directions.

Joanna Kao
That’s FT consumer industries reporter Judith Evans.

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Before leaving, steelmakers try to reduce their carbon footprint. And one of the biggest companies in the industry says it has reached a milestone. ArcelorMittal says engineers at one of its industrial sites in Canada have successfully tested the use of green hydrogen to reduce iron ore. This is part of the steelmaking process which is carbon intensive. The company claims that it was able to replace 7% of the natural gas typically used with hydrogen made from renewable energy. The company said scaling remains a challenge, as does how much hydrogen would be needed to decarbonize.

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You can read more about all these stories on FT.com. This has been your daily press briefing on FT. Be sure to check back tomorrow for the latest trade news.

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