1 - Italy, Cold War Maverick

Summary

Italy is not often featured as an important actor in the geopolitical map of the Cold War. And yet the country played an important role in breaking up a number of strictures that had kept the Soviets at bay from Western Europe. Italy’s fast growing businesses were often the first to reach out to the Soviets for large deals. Fiat very prominently sold a factory to the Soviets in the mid-1960s, representing that decade’s largest turnkey project. But this chapter argues that the more historically consequential initiative was ENI’s suggestion of a gas pipeline running from Ukrainian gas fields to the north of the Mediterranean country. This would have somewhat of a novel payment arrangement: the pipeline would be paid in gas. This arrangement effectively expanded repayment periods well beyond previous, Bretton Woods–era practices, which usually involved short-term loans that covered the time required for barter arrangements to transact. The Soviets saw an opportunity to change the temporal order of Bretton Woods, and suggested a much larger gas-for-pipes deal that would link their newly discovered gas reserves in Western Siberia to Western Europe. Italy balked initally for lack of industrial and capital resources, but others would literally capitalize on the new possibilities Italy had opened.