Renzi in 'pact with the devil' as he visits Putin?

As Italy's prime minister Matteo Renzi heads home from his visit to see Russian President Vladimir Putin, one analyst warned that he should be careful of making a "pact with the devil."

Renzi has become the first major European leader to visit Moscow since Russia's action in Crimea a year ago – even though they have met three times over the last four months. Russian state media portrayed the visit as a sign the West was no longer coordinated against the Kremlin.

His visit is bound to raise eyebrows in Europe, which has isolated Putin and placed sanctions on Russia for annexing Crimea and its territorial conflict with Ukraine over the past year.

Russian President Vladimir Putin (R) shakes hands with Italian Prime Minister Matteo Renzi.
Sasha Mordovets | Getty Images

Ostensibly, Renzi's visit was to seek Putin's help over Libya with growing concerns in Italy over the threat of Islamic State operating in the northern African country, and migrants seeking to escape to Italy from Libya.

"We need an incisive international response and Russia's role can be decisive given its history and its role in the [UN] Security Council," Renzi said at a joint press conference after talks with President Putin. For his part, the Russian leader praised Italy as a "privileged partner" of Russia and said their economic ties were in a "very good state" despite "losses related to well-known events", referencing European sanctions, Russian news agency Itar Tass reported.

One analyst of Italian politics told CNBC that Renzi had a variety of reasons for making the trip.

"It very much looks like Renzi is seeking Putin's help to get back onto the scene over talks about Libya," Francesco Galietti, chief executive and founder of Rome-based Policy Sonar, told CNBC. "But whether that succeeds we will see. It's certainly not an easy play. If you want to make a pact with the devil and move against the stream you must know what you are doing."

"Has Renzi got the right bargaining chips with Putin? What can he offer Putin? That's a key question."

Galietti said he was also being pressured to make the trip by Italian banks, such as Unicredit, as their exposure to eastern Europe and Ukraine was "massive" but that the trip could rile countries in the "eastern flank" of Europe, like Poland and Ukraine, who are fearful of Russia's apparent ambitions to expand its territory, or at least reclaim land lost after the breakup of the Soviet Union in 1991.

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Italy might not have much of a choice but to court Russia, with its economy in desperate need of a boost. After European sanctions were placed on Russia by Europe, Russia retaliated by banning the import of foodstuffs from the region, including Italy.

"Italy was hit very badly by Russia's ban on food imports and you can only imagine what it's like for the Italian prime minister to receive phone calls all day from producers and exporters of Parmigiano Reggiano (parmesan) or things like that (to get Russia to repeal the ban)."

A year into Renzi's premiership, the pressure is mounting on the prime minister to make reforms to enable Italy's economy to recover. Although his trip to Russia could not play well with fellow euro zone leaders, it's the Italian people that could ultimately tire of Renzi's lack of progress on the economic front, one analyst said.

"Renzi's reform agenda also is somewhat weak on economic policy," Wolfango Piccoli, managing director or risk consultancy Teneo Intelligence, said in a note this week.

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"While the government has rightly focused on reducing the tax burden on households and labor, many of measures are merely temporary and financed via deficit spending. If downside risks to fiscal performance materialize, the cabinet may be forced to resort to automatic tax increases to reduce the deficit, with negative implications for the prime minister as well as the country's economy," Piccoli warned.

"Indeed, economic policy will be particularly important over the coming months as Renzi's political fortunes hinge on a steady recovery."

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld