(Intro - I wrote up a full response and my computer restarted without saving my draft...AAAGH! Anyway...)

First I want to clarify that Waterloo, which I am a long-time fan of, isn't technically a "Soviet production". It's an Italian-Soviet coproduction, as Dino de Laurentiis' studio was a driving force in producing the film, especially in building and filming indoor sets, while the Soviet Film board MosFilm provided the outdoor sets around Uzhgorod, Ukrainian SSR, 17,000 Soviet military personnel as extras, Sergei Bondarchuk as director, and actors for a number of mid-level roles. A special shout out to Sergo Zakariadze in his final role as an extremely Georgian Marshal Bluecher - if that's historically wrong, I don't want to be right.

Anyway, how did this Soviet-Italian coproduction come to be? It was actually part of a trend of Soviet-Italian film coproductions, that itself is located in a larger history of postwar Italian film coproductions and film diplomacy.

The first Italian coproduction agreement was signed with France in 1949, followed by agreements with Spain and (West) Germany. By 1967, some 1,411 Italian films had been produced in bilateral, sometimes even trilateral partnerships with these countries. The idea behind the ventures was twofold: one, it was a hard-nosed business maneuver, as it meant production costs could be spread out over more investors, while greater returns beckoned with access to additional national markets. The second idea was a bit more idealistic, if never exactly realized: the Italian producers’ association ANICA (Associazione Nazionale Industrie Cinematografiche & Affini) worked hard to push for these types of agreements as a step towards establishing a globally competitive, Europe-wide film industry. In the 1960s, additional film coproduction agreements were signed with other countries, namely Austria, Argentina, the UK, Yugoslavia, and in 1967, importantly for our story, the USSR.

ANICA in particular was interested in the USSR for its relatively large film studio production capacity and low labor costs, relative to Italy. The Soviets, for their part, had been interested in exploring coproduction agreements with Western countries and studios from Khrushchev's time, especially as home-made Soviet films fared relatively poorly on the international market.

The first big Soviet-Italian film coproduction, and the one that paved the way diplomatically and technically for others to come, was The Red Tent - not the Anita Diamant story, but the story of airship Italia that crashed in the Arctic, and whose survivors were rescued by a Soviet icebreaker. Initially, MosFilm approached a West German studio in 1965, but the partnership fell through - in the words of one German studio executive, "Our working rhythms are different." Truer, more succinct words have never been said. Mosfilm then broke negotiations confidentiality, and shopped the project to other West German and Italian studios (de Laurentiis turned the offer down), before intensifying talks specifically with Vides in Torino, run by Franco Cristaldi.

Cristaldi was in many ways an ideal co-partner for the Soviets, as he personally was a veteran of the Italian partisan movement, and had close connections with the Italian Communist Party. A 1966 agreement between Cristaldi, Vides, MosFilm and Sovexport (which regulated all imports and exports to the USSR) put a working relationship together, which would see Red Tent made and released internationally in 1969. By the way, I recommend the film. It has a musical score by Ennio Morricone (RIP), and Sean Connery playing Roald Amundsen, and is kind of weird in a way 1960s Italian films could be (Umberto Nobile, played by Peter Finch, is tried by a tribunal of ghosts from his past for dereliction of duty at the rescue).

Anyway, the Red Tent agreement led to an intergovernmental agreement in 1967 providing for wider bilateral cooperation and cultural exchange. That the Italian film industry was pushing for this kind of cooperation was also not unique at the time. The 1960s had seen a warming of relations between the two countries, starting with President Giovanni Gronchi's 1960 visit to Moscow. ENI had worked out fossil fuel import agreements with the USSR, and Fiat received approval to construct a major automobile plant in the USSR in 1966 (in a town the Soviets helpfully named Togliatti, after the Italian Communist Party leader).

Back to Waterloo - negotiations for the coproduction of this film began on the heels of The Red Rent, with de Laurentiis recalling: "‘I can see that I will need thousands of soldiers and thousands of horses. There are battles scenes that go on forever. So, I say to myself: “I’ll put the idea to the Soviets; they can give me everything”. The technical partnership split between MosFilm and de Laurentiis Cinematografica was 60-40. The filming was beset by numerous difficulties, a notable one being Bondarchuk not understanding English and not able to even read the script. The film earned 1.02 billion lira in Italy (about the same as Red Tent), but was extremely expensive to make, even with lower Soviet costs - 15 billion lira, or about 50% above the original budget estimate.

A further Italian-Soviet co-production (I girasoli, or The Sunflower) starring Marcello Mastroianni and Sophia Loren was a bit more successful with Italian audiences, but ultimately the Soviet-Italian agreement didn't really live up to the promise. The mish-mash of cinematic styles was too great, Italian audiences were too cold to movies that didn't feel Italian enough, and none of these movies were able to hit it big with American audiences, which was the real prize (similarly to how foreign films try to make it big in the Chinese market today).

Cristaldi wasn't able to come to an agreement with MosFilm for a follow up coproduction, although some of the ideas floated (Master and Margarita, Battle of Stalingrad, even Ray Bradbury's Martian Chronicles) sure as hell sound interesting. It took until 1982 for the next Vides-MosFilm productions to be produced: two movies about John Reed (Mexico in Flames and Ten Days That Shook the World), and a Sergei Bondarchuk-directed television series. Over the 1970s, only two relatively small-budget comedies were made as Italian-Soviet coproductions, and interest in such collaborations didn't really begin to revive until 1987's Oci Ciornie.

Part of the main issue is that the Italians and Soviets were attempting to invest in massive collossal cinematic blockbusters at a time in the late 1960s and 1970s when such films were beginning to go out of style, especially among American movie goers who were warming to the American New Wave (the John Reed project notably fared badly compared to Warren Beatty's 1981 Reds). While the partnership produced a few films, notably Waterloo, it never really was able to pull off a successful fusion of both countries' strengths.

Source:

Barbara Corsi. "Italian Film Producers and the Challenge of Soviet Coproductions: Franco Cristaldi and the Case of The Red Tent". Historical Journal of Film, Radio and Television, Volume 40, 2020. Available here