Reuters International

By Crispian Balmer

ROME (Reuters) - Italy's desire for justice over the killing of one of its students in Cairo is knocking up against the demands of realpolitik, with Rome unwilling to jeopardise commercial ties over the brutal murder.

Looking to register its frustration over the slow-paced investigation into the death of Giulio Regeni, whose badly tortured body was found in a ditch in February, Italy last week recalled its ambassador from Cairo for consultations.

It has promised further action unless it sees signs that Egypt is serious in uncovering the truth behind the killing, but is sending a carefully calibrated message, anxious not to wreck previously strong relations with President Abdel Fattah al-Sisi.

"Given that the cooperation (over the investigation) has been deemed to be insufficient, we have decided to take proportional action without starting a world war," Foreign Minister Paolo Gentiloni said at the weekend.

A foreign ministry official, speaking off the record because of the sensitivity of the issue, said that without a breakthrough, Italy could advise against tourist travel to Egypt and halt cultural or educational exchanges.

Beyond that, Italy would look to develop a pan-European approach to the issue, seeking strength in numbers.

"I don't think Italy will jeopardise trade ties, not in the current economic climate," said Silvia Colombo, a senior fellow at the Istituto Affari Internazionali in Rome.

It is not just about trade. Like other Western nations, Italy also needs Egyptian support in trying to stabilise neighbouring Libya and stem the flow of migrants streaming across the Mediterranean in search of a new life in Europe.

SISI SUPPORTER

Regeni, 28, a postgraduate student at Britain's Cambridge University, was in Egypt doing research on trades union movements when he vanished on Jan. 25. An autopsy showed he was tortured over several days before dying.

Human rights groups have said the torture indicated he died at the hands of the security forces, an allegation Cairo denies.

By coincidence, his body was found as an Italian trade delegation was visiting Egypt, aiming to bolster economic ties.

Italy was the north African country's fourth largest trade partner both in terms of imports and exports in 2015, according to Egypt's official statistics agency, CAMPAS.

Those ties were worth $5.72 billion in 2014, Italy's export agency SACE said, slightly down on the previous two years. Prime Minister Matteo Renzi, determined to reverse this decline, visited Egypt twice between 2014 and 2015, heaping praise on Sisi. The Egyptian leader came to Rome last year.

Some 100 Italian companies operate in Egypt, led by energy firm Eni which announced last August that it had discovered the biggest gas field in the Mediterranean off Egypt's shores, which could start production next year.

"Everyone is keeping their heads down and hoping this crisis ends soon," said an official with an Italian finance company heavily involved in Egypt. "Most of our projects are being developed over the medium-to-long term so should be safe."

Should Italy pull back, other nations would fill the space. Underscoring that, French President Francois Hollande will visit Egypt next week, with French media reporting that Cairo was set to sign defence contracts worth more than $1.1 billion.

"Italy could limit its commercial ties, but that is a very dangerous game," said former Italian ambassador Sergio Romano, who is an editorialist with Corriere della Sera newspaper. "The government should be pushing to make this a European issue."

In that vein, the EU's top diplomat, Federica Mogherini, an Italian said this weekend that the European Union was ready to "support Italy's efforts to obtain the truth over the death".

She did not say what this support might be. The Italian foreign ministry official said Rome might seek a common statement by EU foreign ministers to express their concern.

The saga remains front page news in Italy, meaning the government cannot let the matter drop. Regeni's family has also said it will keep up the pressure, with his mother threatening to release a photograph of his battered body - a potential public relations blow for Egypt as it tries to revive its flailing tourism industry.

"I only recognised him because of the tip of his nose," his mother told a news conference last month. ($1 = 0.8779 euros)

(Additional reporting by Ola Noureldin in Cairo and Robin Emmott in Brussels; Editing by Robin Pomeroy)

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