RUSSIA-ITALY: Berlusconi Blunder Steals the Show

Agreements on cooperation to revive Italy's nuclear sector and give LUKoil a foothold in the European refining sector topped a slew of deals signed Thursday, overseen by President Dmitry Medvedev and visiting Italian Prime Minister Silvio Berlusconi.

But Berlusconi, renowned for impolitic and controversial statements, grabbed the most attention with comments about Barack Obama, describing the U.S. president-elect as "young, attractive and even suntanned."

Medvedev touted the day's agreements at a joint news conference after the talks as examples of productive cooperation between the countries.

"Our companies, energy and otherwise, feel comfortable working with each other," Medvedev said.

He also thanked Italy for its "balanced" response to Russia's actions in its brief, but intense conflict with Georgia in August.

"We believe that a measured and comradely position helped resolve one of the most complex crises of the recent period," Medvedev said.

Berlusconi responded by saying that Italy's position was based on hard facts, a reaction he said he hoped that he would see from the rest of the world as well.

The nuclear energy deal will involve Russia helping with the joint construction of third and fourth-generation reactors, Rosatom head Sergei Kiriyenko said after the signing ceremony. Leading nuclear powers are still mastering fourth-generation reactor technology.

"Italy faces the task of returning to a leading position in the European nuclear power industry," Kiriyenko said.

He said that Thursday's accord foresees cooperation in Russia, Italy and third countries, adding that it was "a question of three to five years."

"Because Italy hasn't been developing its nuclear industry for a long time, some of the expertise has remained, some hasn't," Kiriyenko said.

Italy mothballed its nuclear program following the Chernobyl nuclear disaster in 1986. Berlusconi made the return of nuclear energy part of his election platform earlier this year.The 1.35 billion euro deal finalized Thursday between LUKoil and Italian refiner ERG, meanwhile, will bring the oil major into the European refining business, CEO Vagit Alekperov said. Other agreements involved car, tire, cement and electricity producers.

Italy's Pirelli signed an agreement with Russian Technologies to produce tires in the Volga town of Samara. Russian Technologies chief Sergei Chemezov estimated the investment in the venture at 350 million to 450 million euros.

Russian carmaker Sollers, formerly known as Severstal-Avto, and Fiat agreed to set up assembly of low-cost cars in Russia, Sollers head Vadim Shvetsov said at the Kremlin, declining to elaborate. Sollers has produced Fiat vehicles since 2006.

Italian aerospace and defense company Finmeccanica, meanwhile, signed a string of deals with Russian state-controlled companies, including an agreement to provide new technology for the Russian rail sector.

Berlusconi provided backing in his statements for Medvedev's calls for a new international financial architecture in view of the current global financial crisis. Russia has already submitted proposals to its partners, including Italy, for review before a Nov. 15 summit in Washington, Medvedev said.

The two leaders also said no barriers remained to the signing of a new partnership agreement between Russia and the European Union.

Berlusconi's comments about Obama came as part of praise for the president-elect as someone with whom the Kremlin could work.

"I don't see problems for Medvedev in establishing good relations with Obama, who is also handsome, young and even suntanned," said Berlusconi, himself sporting a tan.

Berlusconi later defended the comment as a great compliment and castigated the media for having the vice of "not having a sense of humor," Italy's ANSA news agency reported.

Source: The Moscow Times By Anna Smolchenko

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