‘Their absence will be felt’: Italy fears economic blow as Russians stay away | Italy

In the window of a tobacconist in the town of Arezzo, in eastern Tuscany, there is a yellow sign with red letters reading “We only accept payments in rubles”.

“It’s just a provocation,” said store owner Anthony Brucato, noting that the same window displayed the blue and yellow flag of Ukraine and a drawing of a dove with a peace flag in its beak. . “I want to get people talking about what’s going on. There are a few leaders who make decisions that impact millions of people. It’s crazy.”

While Brucato said he was critical of Russia’s invasion of his southern neighbour, he admits his showcase could be seen as showing a mixed message. It’s not alone.

The Italian government stands squarely with other EU countries in opposing Russia’s war in Ukraine. Italy imposed sanctions on the Russian economy, stopped dealing with its banks and called for a negotiated settlement of the conflict.

Opinion polls show that between 80 and 90 percent of Italians support the government’s position, according to polling firm Opinioni, a figure that could rise as evidence of Russian atrocities in the Ukrainian town of Bucha comes to light.

Yet the country continues to rely heavily on imported Russian gas, despite Italian Prime Minister Mario Draghi adamantly refusing to pay for that gas in rubles – a move in a geopolitical chess game that inspired the panel Brucato yellow.

Analysts say the lack of Russian imports of Italian goods and Russian visitors could threaten to derail Italy’s fragile post-pandemic economic recovery. In late March, the Economist Intelligence Unit cut its estimates for economic growth across the EU, but said Italy would be hardest hit, with growth slowing to 3.4% this year from a previous estimate of 4 .4% due to the impact of trade with Russia and secondary impacts such as rising fuel costs and supply chain issues. This matched what Italy’s National Statistics Institute said last week that further downward adjustments could be in the works if the war continues.

On Tuesday, Micaela Pallini, president of the Federvini wine sector association, said the war in Ukraine could create “irreversible long-term impacts” for Italian winemakers. She said devastation and the humanitarian crisis remained the main concerns in Ukraine, but also noted that Italy was the top supplier of wine to Ukraine and Russia, with combined sales of around 400 million euros ( £335m) last year, around 6% of Italy. wine exports. This will be significantly reduced this year.

Producers of luxury goods, including clothing, jewelry and accessories, said they expected similar declines in exports. Forte dei Marmi, a resort that caters to Russian shoppers and visitors, reportedly suspended expansion plans days after the war began.

Italy’s tourism sector, already reeling from lockdowns and quarantines over the past two years, will be hit even harder, according to Michele Costabile, professor of business and management at Luiss University in Rome. He noted that while Russians barely ranked in the top 20 for the number of visitors to Italy, in terms of time spent in the country they were ninth and, measured by overall economic impact, they were second, behind Germany only.

“Traditionally, the average Russian visitor stayed in Italy for five or more days, compared to two or three in most other countries, and spent around 65% more money per day than the average tourist,” Costabile said. “I assure you that the absence of Russian visitors in the area will be felt.”

Marc Antonio Esposito, a clerk at a high-end watch store in Rome, said the impacts of the war were evident from the start.

“The watches we sell start at around €5,000 and go much higher,” Esposito said. “We had enough wealthy Russian clients to hire a Russian-speaking partner. But I don’t think I’ve seen more than two or three Russians since the beginning of the year.

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