The latest news coming from the Ukrainian front - separatists abandoning their stronghold in Slaviansk - could anticipate a turning point in the war. But it is really too soon to see the end of this crisis which is putting to test - well beyond the Ukrainian border - the relationship between Russia and the West. "Russia and Ukraine will find a way: time is the best medicine", says Vladimir Dmitriev with a smile, in Rome last Friday for the D-20: the second meeting of the institutions of G-20 countries involved in the financing of sustainable growth.

In some way, Mr Dmitriev is a front-line worker as well. Since 2004 he has been at the helm of Vnesheconombank (Veb), the State institution which in Soviet times used to manage the Ussr's foreign debt, until Vladimir Putin decided to turn it into a State development bank. Veb is one of the main conduits for the huge investments which in 2008/2009 saved a lot of Russian companies and banks, or which made the big Sochi Olympic project possible. And now the oligarchs struggling to repay their loans on time, or the entrepreneurs who - because of the Ukrainian crisis - cannot find proper access to financial markets, they all count on Veb's support. Next on the list of targets of possible new American sanctions, Veb itself is going through a hard time: yet its chairman has no doubts. Should sanctions be increased, Russia would be prepared. Whereas businesses in the European countries most closely connected to Russia, such as Italy, would be hit. Italy alone could post losses in the range of 10 billion euros.

How seriously is the Ukrainian crisis damaging the Russian economy?

Of course to some extent we are influenced by sanctions and restrictions. But not to the extent which may be relevant to the economies of Western Europe: Italy in particular, Germany and France. Mainly these three countries, deeply involved in cooperation with Russia. Sanctions imposed on Russia will be imposed on your businesses, and that's the main problem. There are estimates suggesting that the loss for Italy might be in the range of 10 billion euros, should sanctions be increased: losses regarding trade, investments, non repatriated profits from companies which won't be able to work without additional and technological assistance. And of course, as a result of an increase of sanctions, Russia will think about counteractions.

What kind of counteractions?

To talk about this is not part of my job, they are decided at government and presidential level, I won't comment on that. My wish is that we won't reach that borderline where we are forced to do something which is not desirable for our partners.

But what about Russia?

We are prepared. You should not underestimate Russians. Maybe they are not concentrated when times are good, enjoying the beauty of life…But when there are constraints, Russians are united. That's one of the main things to bear in mind. With the banking system, the Government, with Russia entrepreneurs and State-owned companies we are elaborating new mechanisms for long-term investments through the refinancing facilities of the Central Bank. We are working closely with banks outside Europe, and enjoy business facilities from them. So we have much to do, and if the worst scenario is in case, we are prepared. Our task is to finance development of our economy, and the sources for this financing are here with us.

And yet Vnesheconombank itself has had difficulties...

Of course we are experiencing problems: we were about to refinance our syndicated loan (2,45 billion dollars, ndr), which we had to pay in mid April as we could not reach an agreement with the syndication of banks. But we found other sources to pay back this loan: it's another example that we can find facilities servicing our indebtedness and for the financing needs of our corporates.

Could Asian investors compensate for Europeans and Americans?

In terms of the US we don't need any compensation, because American investors are not in Russia as a big investor. It's a matter of business interest: if somebody is not in Russia, others will take this space. And of course we have a lot of businesses with China or Korea. We set up a special private equity fund with China Investment Corporation, the Russian Direct Investment Fund (RDIF) and CIC have 2 billion dollars to be invested primarily in Far Eastern parts of Russia. We see China looking with great interest at Russian investment opportunities: Yamal, Lng, gas pipelines, forestry, raw materials. Russia did a lot through allocating a certain, substantial amount of money from our Wealth Fund to be invested jointly with RDIF in infrastructural projects, just to make foreign investors gain appropriate returns.

Which are the most important projects for Veb at the moment?

Primarily these are infrastructure projects, roads, bridges. One of the biggest where we are involved is the bridge (which will link) Crimea with the continental territory. Road connections between Moscow and S.Petersburg, airports, big industrial projects. Which we implement jointly with big foreign companies in Japan, in Europe, supported by facilities extended to us by national and international financial organisations. They are committed, not in a position to breach their obligations.

Capital flight is one of the biggest brakes for the Russian economy, depriving it of investments. How would you solve this problem?

Don't overestimate the role of capital flight. It has an influence, of course, but primarily we are talking about speculative capital, repatriation of revenues. In terms of direct investments, in the last years Russians have been major recipients of investments thanks in particular to the work of RDIF. Agriculture, medicine, financial markets, infrastructure: investors understand the environment is friendly.

Veb is in Ukraine through its bank, Prominvestbank. How do you see your future presence in the country?

First of all, we are not the only Russian institution who owns a subsidiary in Ukraine. The role of Russian banks there is huge, both in terms of private accounts than of financing of the local economy. It goes without saying that any incautious attempt to somehow influence the activity of those banks would inevitably have repercussions on the local economy and the financial system. The current president of Ukraine, who has huge experience in the private sector - actually his companies are client of our banks - I think he understands pretty well how important it is to keep the banking system united, not to impose any disturbances, mismanagement, regulative procedures from the National Bank. I didn't see any decree from the government saying: look, you shouldn't work with Russian banks.

Last year in Trieste your RDIF set up together with Fondo strategico italiano of Cassa Depositi e Prestiti a 1 billion investment platform focused on Italy and Russia. How important is it for Veb the relationship with Italy?

I can say they are very close to finalise a deal to finance a particular project in Russia. But of course the interest of Veb and companies owned by ourselves, like the RDIF and other, are broader. We are considering various opportunities to support investment abroad, and primarily what we have in mind is the support to small and medium enterprises, specifically Italian enterprises, who are going not only to sell but to invest in Russia. We have a lot of things to do with CDP.

Among those, this D-20 Initiative organised this year in Rome by Cassa Depositi e Prestiti and the European Investment Bank.

The D-20 was initiated last year by our bank to get together institutions for development of the G-20 countries. The D-20 is a unique possibility of addressing our common problems, challenges, and of course influencing our governments so that they look attentively at what institutions for development are doing, can do, must do. The priorities are infrastructure, long-term financing, small and medium enterprises: a resolution of these issues will allow us to secure sustainable growth and stick to social responsibility, and finance in a broadest scale the green economy.

It is also a link with Russia in a difficult time…

Yes, in this particular moment I think the G-20 and D-20 can play a most substantial role. We can bring a new atmosphere, this is a way to make the political environment better than it is now.

And the G-20 is quite an appropriate platform which unites not only G-7 countries, but others which are part of the global economy. Where Russia - such a big country - has global influence. It will be impossible to isolate it.