Caspian Energy Journal Caspian European Club
Friday, 26 June 2015 16:00

“Our relations are rooted in deep economic interests, mutual respect and sympathy”, Ambassador Extraordinary and Plenipotentiary of Italy to Azerbaijan Giampaolo Cutillo Featured

Caspian Energy (CE): Mr. Ambassador, you have recently stated that the relations between the two countries are currently bearing a strategic character. Which areas are developing most actively and which problems have been arising? What is the potential of growth of the commodity turnover between the two countries?  

Ambassador Extraordinary and Plenipotentiary of Italy to Azerbaijan Giampaolo Cutillo: Speaking about strategic partnership, we mean the relations, which go in all fields. It covers, of course, economic cooperation, cultural cooperation and a political dialogue. We can say that energy is, of course, a cornerstone of the cooperation. There are two basic reasons for that. The first one is that Italy is the main trading partner of Azerbaijan. In turn, Azerbaijan has been the Italy’s first supplier of oil since 2014. The second reason is future projects. As you know, Italy is a partner in the Southern Gas Corridor. So, we together with all our partners, including Azerbaijan of course, have already committed ourselves to start the construction of the Trans Adriatic Pipeline (TAP) in 2016. That is all regarding energy, which is a very important sector for both countries. As far as the other fields are concerned, in the recent three-four years I have witnessed a notable increase in the Italian export to Azerbaijan. If we look back, in 2011 the Italian export to Azerbaijan was less that 200 million euros, while in 2014 it reached 600 million euros. So, these figures are good evidence that our relations have grown. Of course we have a potential for a further progress. We are not satisfied with the current figures because they could have been even better.


CE: Which area is, in your opinion, having the main potential for development? Which concrete projects will be implemented?   

Giampaolo Cutillo:Well, export plays an important role. There is a potential for Italian companies, since Italy is one of the world’s biggest exporters. Here in Azerbaijan we are already present in many fields such as, for example, machineries, fashion, food, home design, furniture industry, etc. But I think that we will see a notable difference with the increase in a number of Italian companies investing directly in Azerbaijan. And from that point of view, I have in mind a lot of infrastructure projects where Italian companies could give their support. Transportation, healthcare, environment and constructions are just a few sectors among many others where Italian companies have great know-how and are able to contribute.


CE: You said that export represents a main aspect in the bilateral relations What would you say about export of technologies from Italy, innovation cooperation?

Giampaolo Cutillo:Export is when you sell and it has already been established. But we want to do more. Our ambition is to be here and create partnership with local industries and local partners and that is the most important part, which creates added value relations.


CE: Does Italy intend to join the Baku-Tbilisi-Kars project, which is to come on stream this year?

Giampaolo Cutillo:The construction has been almost finalised. So, I do not think there is any space for Italian companies left in this concrete project. However, this is not the last project. There will be more projects in the future.


Do you see a possibility of expanding this project to Italy?

Giampaolo Cutillo:Yes, of course. We have had a number of meetings with the Ministry of Transport of Azerbaijan. Certainly we would like to be present in all development projects like, for example, transportation projects, which are very important and where Italian companies have a big potential. We would like to develop bilateral contacts between the governments of our countries.


CE: As far as the investment cooperation is concerned, how favourable is the investment environment of Azerbaijan for Italian companies? Which factors are helpful and which ones hamper development of Italian companies on our market?  

Giampaolo Cutillo:First of all, I would like to note that Azerbaijan has a friendly climate investment. So, I would like to give a very significant example. Last April the Italian company Tecnimont and SOCAR Polymer signed the agreement to build a polypropylene plant in Sumgayit. The value of this plant is going to be 350 million euros, which is a very big amount. This is the first and very important example. I hope we can continue progressing along this path and much more expand our cooperation.


CE: Which projects do exist at the “embryo” stage? 

Giampaolo Cutillo:Some companies, for example, are now taking part in the construction of the Southern Gas Corridor, such as Saipem. They are working offshore and involved in the SCP and TANAP projects. The qualification process for the TAP contracts will start very soon, and Italian companies will be there along the full project. There are also many other good stories of cooperation.


CE: According to your words, Italy is a partner to the Southern Gas Corridor project. Does not Italy have concerns about the problems of the EU-Greece relations?

Giampaolo Cutillo:Greece, of course, is an important part of the EU. We have deep friendly relations with Greece. We think that Greece will continue to fulfill its commitments, as reaffirmed by the Greek government also in the last couple of days, and, of course, we are ready to support the dialogue of Greece with the government of Azerbaijan, as far as our shared projects are concerned.


CE: What would Italy do it Greece leaves the eurozone?

Giampaolo Cutillo:This is a very delicate and sensitive issue. Negotiations are ongoing in the EU at the highest level and, as reaffirmed even today by Prime Minister Renzi, no efforts will have to be spared to keep Greece within the euro zone.

However, this is an issue which will not affect TAP and other energy projects.


CE: By saying that, do you mean that the Caspian gas will be delivered on time?

Giampaolo Cutillo:Yes, I think so, it is Italy’s commitment.


CE: Does Italy support the Trans-Caspian Gas Pipeline? Is Italy interested in the development of this project?

Giampaolo Cutillo:We as a part of the European Union give all support to this project. It will promote further diversification and add new sources of energy for Europe. So, of course we are in favour of it. What we need now is to have cooperation with all the parties involved. There is now a quadrilateral cooperation between Turkmenistan, Azerbaijan, Turkey and the EU. We as a part of this cooperation and would like to contribute to this project.


CE: Do Italian companies plan to join this project?

Giampaolo Cutillo:I think it is a bit early to speak about that because the project is still on paper and there are too many things to be solved politically, and then juridically and economically. Once the project gets started and contracts are announced, Italian companies, of course, will be there.


CE: Do you mean that you wait for a singing of an intergovernmental agreement?

Giampaolo Cutillo:Of course, geographically we are in a different part of the world. The issues of the countries involved in this project should be solved first. The first two parties are Turkmenistan and Azerbaijan. They are to address the problem related to the Caspian Sea status and this is a very important point. But once the problems are settled, Italy as a part of the EU will be very happy to be in this project.


CE: Is not Italy as the EU member state, concerned about the expanding influence of China in Turkmenistan and Kazakhstan?

Giampaolo Cutillo:Well, of course, every country is free to exercise its own sovereignty, its own foreign policy, and choosing its own partners. So, I do not see reasons why Kazakhstan and Turkmenistan should not have good cooperation with China. It is normal. They are neighboring countries. Italy as a part of the European Union also has a close cooperation with China. It is a part of the global world. So, I do not see a contradiction in it.


Does Italy support development of renewable energy projects?

Giampaolo Cutillo:Of course, Italy supports renewable energy. It is a big issue for us. We need to cut our dependence. I mean we have to do something to the benefit of the environment and should fulfill our international obligations. In general, I would say that we definitely in favour of renewable sources.


CE: 5 out of 20 regions in Italy are better-off since they keep the majority of taxes for own needs.  As to Sicily, it keeps all 100%. What is the reason for such unequal economic development within single Italy which even has certain regions where two state languages are spoken? Is there a possibility to establish inter-regional cooperation between Azerbaijan and Italy, what is your vision about it?

Giampaolo Cutillo:The explanation to your remarks goes back to the Italian history. Italy is a country with a very long and complicated history. So, there are historically driven differences between the regions. In general terms, the northern regions are more industrialized than the southern regions. Also, there is a notable difference in incomes of the regions like, for example, Lombardia or Veneto if compared to Sicily or Campania in the south.

Italy is also one single and indivisible state, as stated in our constitution, which also envisages the concept of solidarity, which means that if a certain amount of money is needed as investments or social projects in a certain region, it can be taken also from the money of taxes collected elsewhere in the country.

 The state has a single budget, so once all the revenues are received, the government is free to distribute them among the regions.


CE: Some of them do not pay taxes. Does not it hamper the economic progress?

Giampaolo Cutillo:Well, of course the payment of taxes is due by all, without distinction, and in proportion to their income.

 The government has a difficult task since it has to support those regions, where there is a strong industry and a vibrant economy and that account for the lion’s share of our revenues. But at the same time we are a democracy, a social democracy. So we have commitments to the society and a duty to help also the under privileged and those who are in a less favorable position.


CE: Are there plans to develop the interregional cooperation between Azerbaijan and Italy?

Giampaolo Cutillo:Yes, we are already exercising such cooperation. Also, I would like to add that the regions in Italy enjoy certain autonomy. So, they have they own international projects, which are agreed with the state. There are already several good stories of cooperation between Italian and Azerbaijan towns. This cooperation can be developed further.


CE: Do you see the further potential of development?

Giampaolo Cutillo:Well, I see a potential and to be honest I see it as the most important part of my duty to boost the state to state and government to government cooperation.


Do the two countries intend to develop the cooperation within the Italian Strategic Fund (Fondo Strategico Italiano)?

Giampaolo Cutillo:This is another part of our cooperation. In the last few months there have been contacts between our financial institutions, between the two ministries of finance, between SOFAZ and our strategic fund. The discussions are ongoing, so I think that some kind of cooperation is likely to start soon. Both sides have a potential in terms of investments. So, if there is any, for example, successful industrial project in Italy, which needs foreign funds, why not use investments from Azerbaijan? I think it is a good opportunity for both countries.


CE: Could you mention any concrete projects in Italy, which need investments?

Giampaolo Cutillo:We have a general policy of attracting investments, which we believe are beneficial for our economic system. There are not yet any specific projects now interesting for Azerbaijan, but we are working on a general framework to create communications channels and be able to think of specific projects.

I would like to add that overall we are very happy and very satisfied with the Italy-Azerbaijan relations. These are relations, which are rooted in big economic interests, mutual respect and mutual sympathy, and also based on some common values, similar culture. So, I believe that when the human factor underlies the relations, then the relations are build much easier.


Thank you for the interview


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