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Qatar says will continue to invest in Italy

by Carlo Festa and Simone Filippetti

24 Exclusive content for IT24

Qatar Holding is ready to invest in Italy and new transactions in Europe. The decision by Saudi Arabia, Bahrain, Egypt and the United Arab Emirates to break off diplomatic relations with Qatar, triggered in a few hours in the Middle East, does not seem to change (at least for now) the financial strategy of the small Gulf country in the Old World.

Sources close to the Doha government say that “other interesting operations in Italy will be studied after those already carried out with the Italian Strategic Fund for Cassa Depositi e Prestiti and after purchasing the Costa Smeralda and the Porta Nuova district in Milan.”

The Middle East storm comes at a moment where relations between the Italian government and Qatar are their historic best. All the latest Italian prime ministers, from Mario Monti to Enrico Letta to Matteo Renzi and last Paolo Gentiloni, have sought to facilitate Doha’s investments in Italy: but so far this policy has not yielded impressive results considering that Italy is at the bottom of the list of countries where Qatar invests its petrodollars, or $80 billion in stakes in highly rated financial, industrial, TLC, commodity and infrastructure sectors.

Qatar’s first investment destination is China (30%), Germany (21%), United Kingdom (13%), France (5%), Switzerland and Spain (with 2%), Brazil (1%) And then come the other countries, including Italy, where investments mainly focus on unlisted companies of luxury and real estate.

Qatar has always had a rather vague strategy for Italy: so many dossiers examined, but few completed. So much so that Monti himself, on a visit to Qatar in 2012 organized to urge more investments in Italy, heard from the emir of Qatar's emir -- which is not exactly Norway, as Monti himself liked to say -- “we do not invest in Italy because there is corruption.”

But with the government of Matteo Renzi, Qatar's presence in Italy started growing. Contacts between Renzi and the Qatar emir, Tamim bin Hamad al-Thani, started in Paris in November 2015, during the Climate Conferenze. Renzi was well aware of who Al-Thani was also because of the Qatari acquisition, in 2013, in Florence of Palazzo della Gherardesca, a Renaissance architectural masterpiece with a 4.5 hectar of historic park, which in 2008 became a Four Seasons hotel.

Two months after the meeting in Paris, in January 2016, Al-Thani came to Italy for an official visit and met Renzi at the prime minister’s office in Palazzo Chigi. That’s when they started discussions about a possible Doha investment in struggling Monte dei Paschi di Siena (MPS).

Not only were MPS managers trying to convince the emir, but also the prime minister's entourage led by Fabrizio Pagani, head of the technical secretariat of the Economy Ministery, and very familiar with the world of sovereign wealth funds.

But Qatar never went ahead with the investment: the attempts ended with Renzi stepping down from the prime minister’s office after his defeat during the constitutional referendum on December 4.