An energy industry veteran who nurtured close ties with Vladimir Putin and has criticised sanctions against Russia over its invasion of Ukraine has emerged as the frontrunner to chair Italy’s biggest utility company.
Paolo Scaroni is the preferred candidate of the ruling coalition government of Giorgia Meloni to chair Enel.
Scaroni was CEO of the company, in which the Italian government is the largest shareholder, from 2002-2005 after being nominated by the former prime minister, Silvio Berlusconi’s, second administration. He went on to become CEO of the energy company Eni, a role he used to orchestrate several big deals with the Kremlin-controlled Gazprom that led to Italy’s reliance on Russian gas.
Meloni, who has positioned herself as a staunch Atlanticist and supporter of Ukraine, is believed to have relented to pressure from her junior coalition partners, Berlusconi – a longtime friend of Putin – and Matteo Salvini, the leader of the League, over Scaroni’s nomination.
“Meloni tried until the very end to fend off those names but eventually she had to cave in,” said a former senior official at Italy’s finance ministry. “She has been scared about the idea of having Scaroni there because he undermines her own political narrative.”
There are fears that Scaroni’s appointment would directly undermine US and European efforts to curb Russian influence and stop Putin’s war in Ukraine, as well as weaken efforts to reduce demand and cap prices on Russian energy exports.
“Since the war in Ukraine he has said a price cap on gas is unachievable, and that Italy needs Russian gas for at least another 10 years,” the former treasury official said. “He has also publicly railed against the Russian sanctions. As chairman, he would have sweeping powers to make good on these views. If Scaroni becomes Enel’s next chairman, Putin will have a friend in one of Europe’s most influential companies.”
Alan Riley, a geopolitics expert and senior fellow at the Atlantic Council Global Energy Center, said Scaroni was an unwise pick. While other European countries had struck deals with Gazprom, none were as long or as costly as Italy’s, which left Italy scrambling to diversify energy sources after the Russian invasion of Ukraine.
“From the point of view of energy security and European consumers, it was an immensely costly mistake, and so do you really want to have the people responsible for getting us into this mess to be back at the top of major European companies?” Riley asked. “The other concern is that they’ll go back to ‘business as usual’ the moment there’s a ceasefire.”
Riley said Scaroni’s nomination was a “negative signal” about the direction Italy wanted to take its energy policy and how serious it was about supply diversification.
Another controversial nomination is Flavio Cattaneo, the Meloni government’s pick for Enel CEO. In an interview with Il Foglio newspaper in December, Cattaneo criticised Enel’s investments in renewables in the US.
Enel shareholders will cast their votes on board appointments on 10 May.
