Originally posted: ISPI – Italian Institute for International Political Studies.
Goods, services, people, and capital: the two countries are transforming their relationship, with Rome playing a strategic role in Ukraine’s reconstruction and EU integration beyond mere trade.
Once defined by iron and metallurgy, Italy-Ukraine relations are being recast in the fields, factories, and financial corridors of a reshaped Europe. As Ukraine’s economy adapts to war and deepens its EU integration path, Italy has emerged as both a critical trade partner and a potential strategic advocate inside the European Union.
Italy’s role has also grown diplomatically: as host of the 2025 Ukraine Recovery Conference (URC) in Romeand as an active member of the G7 Multi-Agency Donor Coordination PlatformItaly has positioned itself at the core of Europe’s reconstruction architecture.
With the EU’s four freedoms regarding the movement of goods, services, people, and capital as a framework, this partnership reveals both continuity and transformation. From Ukrainian corn feeding Italian cattle to Italian engineers contributing to Ukraine’s reconstruction, the bilateral connection reflects not only commercial ties but also a shared European project in the making.
Goods: From Steel to Grain
Before Russia’s full-scale invasion, Ukraine’s exports to Italy were the product of an industrial symbiosis. The Ukrainian Metinvest Groupone of the largest steel producers in Europe, owned two Italian plants – Trametal and Ironworks Wall pages – creating a vertically integrated supply chain that shipped slabs and pig iron from Mariupol to the Italian industrial North. Steel, iron, and pipes accounted for roughly 60% of pre-war exports to Italywhile agriculture played a secondary role.
Figure 1
That picture has now flipped, while total trade turnover has shown resilience. Today, Ukraine’s exports to Italy are dominated by agricultural goods, particularly corn. In 2024 Ukrainian corn accounted for nearly 40% of Italy’s total corn imports, or roughly three million tonnes. Given Italy’s annual consumption of about 12 million tonnes for animal feed, this means that one in every four Italian pigs or cows may be eating Ukrainian corn. Ukraine feeds the raw materials of Italy’s food industry, sustaining the production of hams, cheeses, and other staples of the “Made in Italy” brand.
Meanwhile, Italy’s exports to Ukraine have become more technologically oriented. About 6% of Ukraine’s industrial machinery imports come from Italy, and 9% of Italy’s defence exports now go to Ukraine. The shift from metallurgical inputs to machinery and defence highlights both adaptation and alignment.
On one side, Ukraine’s loss of industrial capacity has opened new demand for imported technology and capital equipment; on the other, Italy’s advanced manufacturing and defence sectors are gaining relevance in reconstruction planning.
In a future defined by decarbonisation and reindustrialisation, Italy could become a gateway for green Ukrainian steel – produced using renewable energy and exported to the EU under low-carbon trade regimes. Likewise, expanding joint ventures in fodder production and agri-logistics could deepen value-chain integration and reduce both countries’ exposure to supply disruptions.
Services: Narrow Channels, Expanding Opportunities
Trade in services remains modest but strategically significant. Italy is among Ukraine’s top ten partners in services, but Ukraine ranks below Italy’s top 40 extra-EU partners, reflecting a limited but growing relationship. In 2023 Italy recorded a positive balance of €76.7 million in services trade with Ukraine.
The war has reshaped service flows in two ways. First, Ukraine’s IT and digital sectors have maintained impressive exports despite wartime challenges, creating space for partnerships with Italian firms in software, logistics, and data-driven reconstruction. Second, Italian engineering, architectural, and consulting services are increasingly sought in Ukraine’s recovery projects, particularly those financed by EU and multilateral institutions.
As Ukraine advances toward EU membership, service-sector alignment will become more crucial. Regulatory convergence in telecommunications, professional qualifications, and digital payments could unlock growth. Italy’s experience in small and medium-sized business services – especially in design, logistics, and renewable engineering – could be leveraged to accelerate Ukraine’s transition from raw material exports to higher-value services.
Ultimately, expanding trade in services requires not just business interest but mobility of expertise, educational partnerships, and digital infrastructure – areas where EU frameworks can be mobilised effectively.
People: A Human Bridge Across the Continent
If goods and services reflect structural ties, people embody the social and emotional depth of bilateral relations. Italy is home to one of Europe’s largest Ukrainian communities. By May 2025, approximately 390,000 Ukrainians were legally residing in Italy – making up about 10% of all non-EU citizens.
Before the full-scale invasion, Italy already hosted around 223,000 Ukrainian residents, primarily women working in care and domestic sectors. Following 2022, an additional 167,000 Ukrainians arrived under temporary protection. Despite the challenges of displacement, integration outcomes have been strikingly positive: 66% of Ukrainians are employed, 80% hold higher education degrees, and about half report good living conditions.
This diaspora contributes to both economies. For Italy, Ukrainian workers are indispensable in health and care services, sustaining an ageing population. For Ukraine, their financial contributions are vital: remittances from Italy represented around 10.2% of total inflows in 2024, one of the highest shares among partner countries.
Beyond economics, this community acts as a human bridge between Kyiv and Rome. Many Ukrainians in Italy are women with professional skills and transnational families. Structured return or circular mobility programmes could transform this demographic into a reconstruction asset – channelling skills in healthcare, education, and small business into Ukraine’s rebuilding efforts.
At the same time, Italy’s experience with migration and integration positions it as a natural advocate for freer movement of people between Ukraine and the EU, especially as labour shortages across Europe intensify.
Capital: Financial Links and Industrial Footprints
The movement of capital tells a quieter but equally important story. On the Ukrainian side, Metinvest’s Italian plants and Vesco Clays Italy represent the country’s key outbound investments. On the Italian side, capital flows have been constrained by wartime risk but not absent: between 2022 and 2024, Italian firms invested roughly €30 million in Ukraine – less than 2% of total foreign direct investment inflows.
Italy’s most prominent presence in Ukraine’s financial landscape is Intesa Sanpaolo’s ownership of PravexBanka network serving Ukrainian households and businesses. This presence provides a channel for future investment expansion once security conditions stabilise.
According to Centre for Economic Strategy’s estimates, 79 Ukrainian companies are linked to Italian ownership or partnershipstogether generating over €1 billion in annual revenues. This network, largely consisting of trade representatives and intermediaries, could evolve into a backbone for deeper integration – particularly if supported by EU-backed credit guarantees and reconstruction insurance instruments.
Defence-industrial cooperation also offers potential. Italian manufacturer Leonardo has expressed interest in expanding its presence in Eastern Europe, including radar systems, drone technologies, and aerospace components. Such partnerships could link Ukraine’s engineering talent with Italy’s industrial capacity under NATO and EU frameworks.
The next step is institutional: introducing risk-sharing mechanisms for investors under EU programmes, and establishing an Italy-Ukraine business dialogue to coordinate private and public reconstruction priorities.
A Strategic Outlook: Italy as Ukraine’s Southern Gateway
Italy’s role in Ukraine’s reconstruction and EU integration could extend beyond trade statistics. As a G7 member and EU founding state, Italy is uniquely positioned to act as both partner and advocate – translating Ukraine’s needs into European policy momentum.
In practice, this means, first, anchoring cooperation in specific, high-impact sectors:
- Agri-food supply chainswhere Ukraine’s corn and sunflower products complement Italy’s processing industries.
- Green steel and industrial decarbonisationwhere Italy’s manufacturing hubs could serve as entry points for Ukrainian low-emission exports.
- Defence and dual-use technologywhere both countries can benefit from production diversification and joint R&D.
- Financial and banking integrationenabling capital mobility and credit access for Ukrainian firms, as well as a gateway for Italian investors.
The relationship of Italy and Ukraine is being rebuilt, quite literally, from the ground up. What began as an industrial corridor of steel may now evolve into a multi-layered partnership spanning agriculture, technology, finance, and human mobility.
As Ukraine’s path toward EU membership accelerates, Italy’s engagement will be measured not only in political statements but in the flow of goods, services, people, and capital that tie the two economies together. If cultivated wisely, this partnership could become a model for postwar European integration – one that turns resilience into prosperity, and solidarity into strategy.
As Ukraine moves forward on its path to European Union membership, we prepared a new policy paper to explore the evolving economic ties between Ukraine and Italy — a key EU partner. The analysis covers trade, services, migration, and investment, highlighting both challenges and opportunities for deeper integration.
This brief is produced by Centre for Economic Strategy with the support of the Askold and Dir Fund as a part of the the Strong Civil Society of Ukraine – a Driver towards Reforms and Democracy project, implemented by ISAR Ednannia, funded by Norway and Sweden. The contents of this publication are the sole responsibility of Centre for Economic Strategy and can in no way be taken to reflect the views the Government of Norway, the Government of Sweden and ISAR Ednannia.
