ROME — A series of diplomatic rows between France and Italy, culminating in the exchange of insults between leaders, is casting doubt on naval industry cooperation between the countries.

Moves by France’s Naval Group and Italy’s Fincantieri to integrate their shipyard work has coincided with a crescendo of acrimony between Rome and Paris following the election last year of Italy’s first populist government.

Italian Deputy Prime Minister Matteo Salvini and French President Emmanuel Macron have battled over who should take responsibility for migrants that sail to Europe from Africa, with Salvini last month calling Macron a “terrible” president who deserved to be voted out of office.

Italy’s second deputy prime minister, Luigi Di Maio, who leads the anti-establishment Five Star party, has meanwhile openly backed the so-called Yellow Vest protesters who have rioted on the streets of France in protest at Macron’s government and its policies.

Asked about the verbal attacks from Rome on Jan. 27, Macron replied: “Italy is a great people; the Italian people are our friends and deserve leaders worthy of their history.”

Underlying the row is the Italian government’s new nationalism, which has put it at loggerheads with the European Union and Macron, who is seen by Rome as a pro-globalism politician. The spat is expected to increase as both Italy’s ruling parties — Five Star and Salvini’s League party — get on the campaign trail ahead of European parliamentary elections in May.

Pierside troubles

Analysts fear fallout for defense industry collaboration between the countries, which starts with the well-established satellite and space joint venture between Italy’s Leonardo and France’s Thales.

But the main concern is the naval deal, which was signed last October, under which Fincantieri and Naval Group created a 50-50 joint venture to build and export naval vessels.

Fincantieri CEO Giuseppe Bono said he hopes the deal is the start of wider collaboration.

Speaking at the launch of Italy’s ninth FREMM frigate on Jan 26, Bono played down the frictions with France, telling reporters, “We are part of the same alliance, we have common history,” and adding that the diplomatic tensions “will not influence the work we are doing with Naval Group.”

But one analyst was less sanguine. “It’s a complicated deal, and as it gets more complicated, external events become more influential,” said Jean Pierre Darnis, scientific adviser at Rome’s IAI think tank.

“If ministers from the two countries don’t meet, and we are waiting for [the] next bilateral [meeting], problems won’t get resolved. Right now the Italian-French business community is very concerned,” he added.

The naval deal was spurred by an earlier accord for Fincantieri to take control of French shipyard Chantiers de l’Atlantique. That deal, too, was up in the air when France and Germany referred the agreement to the European Commission for anti-trust scrutiny last month.

“What has happened is extremely serious, France and Germany behaved wrongly. It throws into doubt all accords,” Italy’s Salvini said.

Bono said he was confident the EU would not oppose the deal, given it is “in the interests of Europe,” echoing claims that a consolidated European shipbuilding industry would enable competition since it could compete with large players outside Europe.

But Europe’s ability to consolidate industry was again thrown into doubt in January when Macron and German leader Angela Merkel agreed to forge closer ties between Germany and France to head off the political challenge in Europe from populist governments like Italy, Hungary and Poland.

One consequence, warned Italian IAI analyst Michele Nones, was that closer Franco-German ties could squeeze Italy out of access to defense industry funding provided by the new European Defence Fund.