Italy says Russia-linked companies should be banned from Ukraine's rebuild

ROME (Reuters) -Italy said on Thursday that firms that have helped Russia fund its war on Ukraine by doing business with the country should be excluded from profiting from Ukraine's reconstruction.

Italian Prime Minister Giorgia Meloni said earlier that participants at a Rome conference on the economic recovery of Ukraine had pledged more than 10 billion euros ($11.7 billion) to help the war-torn country.

"We want to work with Ukraine to ensure that entities which have contributed to financing the Russian war machine do not benefit from the reconstruction," Meloni said during a speech at the conference.

The European Union has approved a raft of sanctions against Moscow since Russia invaded Ukraine in February 2022. The sanctions have targeted Russia's energy revenues, banks, and military industry, and frozen hundreds of billions of its central bank's reserves.

An Italian Treasury statement said Economy Minister Giancarlo Giorgetti had discussed the issue of banning companies with links to Russia during a bilateral meeting with his Ukrainian counterpart Serhii Marchenko.

Italy's two largest banks, Intesa San Paolo and UniCredit, still operate in Russia, though both have cut their exposure in the country.

Meloni's administration gave UniCredit nine months to cease its activities in Russia as a condition for its proposed takeover bid for smaller rival Banco BPM.

It was also announced at the Rome conference that 10 European countries, including Italy, Germany, France and Spain, had joined a recently launched export guarantee scheme designed to encourage more EU firms to trade with Ukraine.

The European Commission, meanwhile, laid out 2.3 billion euros ($2.7 billion) in support as part of a broader framework that Commission President Ursula von der Leyen said was expected to mobilise up to 10 billion euros of investments in Ukraine.

She also announced the creation of a new equity fund for the reconstruction of Ukraine, backed by the European Investment Bank, France, Germany, Italy and Poland, which aims to provide another 500 million euros by 2026.

($1 = 0.8540 euros)

(Reporting by Angelo Amante and Giuseppe Fonte in Rome, additional reporting by Marc Jones in London; Editing by Jan Harvey, Aidan Lewis)