The Western Balkans, for obvious historical and geographical reasons, play a central role in Italian foreign policy. Their geographical proximity to Italian territory means the Western Balkans represent for Italy both a place of opportunities and a potential source of instability and strategic risks: this is why in the ‘90s Italy decided to take on a leading role in managing the regional crisis that erupted after the breakup of Yugoslavia and the collapse of the Albanian state.

The Italian involvement in the region, however, was not limited to the military dimension: it included also economic and development aid. This won Italy a very good reputation with the local governments and populations: a soft power that still allows the country to have a say with regards to regional issues, even though it lacks the comprehensive strategy it would need to become a major player in this area of the Mediterranean.

Giuseppe Conte and Ana Brnabić in Serbia

Serbia represents the fundamental pillar of Italy’s policy towards the Balkans. The two countries share solid diplomatic relations, strengthened in 2009 by the signing of a strategic partnership and recently revitalized by several high-level institutional visits to Serbia made by prominent Italian political figures, included that of former Prime Minister Conte in 2019.

From a political point of view, the main feature of these relations is the Italian commitment in supporting Serbia’s accession to the European Union, a necessary step to anchor the country in Europe and ensure its economic and political stability. Besides this, the two countries cooperate closely on defense issues: a collaboration also encouraged by the important role played by the Italian armed forces within KFOR, the UN mission in Kosovo, whose command has been assigned to the Italian contingent since 2013.

In terms of economic cooperation, in 2019 Italy was Serbia’s second trading partner (its fourth supplier and second costumer), with an exchange worth €3.84 billion. Italy is also one of the main foreign investors in the region, with the presence of more than 600 Italian companies and some €3 billion of direct investments. These investments are mainly related to the automotive sector (with FCA’s industrial plant in Kragujevac still representing one of the main direct foreign investments ever made in Serbia) but also include the banking sector (27% of which is in the hands of Italian banks Intesa San Paolo and Unicredit), the insurance sector (Generali and UNIPOL SAI-DDOR control 35% of the market) ant the textile, footwear, and agriculture sectors.

Interesting developing prospects are presented by the energy sector, especially in relation to renewable energies (mainly hydroelectric, but also solar and wind). Italian company Fintel Energia is one of the main investors in this area: it already operates three wind farms and plans to reach an overall 500MW production capacity.

FCA’s assembly plant in Kragujevac