Thursday

28th Mar 2024

EU unveils €300bn reply China's infrastructure programme

  • EU Commission president Ursula von der Leyen said countries needing investment also "need trusted partners" (Photo: European Commission)
Listen to article

The EU Commission on Wednesday (1 December) unveiled its plan to invest €300bn by 2027 in global infrastructure in digital and climate projects - as an alternative to China's Belt and Road initiative.

The proposal does not mention China directly, but it offers to counter the 2013 Chinese multibillion development programme - which critics say has pushed some countries to unsustainable level of indebtedness.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"Countries need better and different offers [to China's initiative]," EU Commission president Ursula von der Leyen told reporters when unveiling the plan.

"We want to show a democratic, value-driven approach can deliver on the most pressing challenges," she said in a response to propaganda from China and Russia, who argue that democratic countries are less efficient.

"They [our partners] know we are transparent, they know it is accompanied by good governance, they know there will be no unsustainable debt levels left over, they know it is with the country itself, inclusively, that we design the projects," the commission chief said, when asked about the gap with China's investments.

Von der Leyen said that the investment represents a strategic approach too, in the interests of the bloc.

"Countries need trusted partners," she said.

"We are at the same level, but our modalities are different. We have been providing grants and China has been providing loans," commissioner Jutta Urpilainen, in charge of development policy, said on Wednesday.

"If I look at the statistics, between 2013 and 2018 Europe has been the largest provider of development assistance in the world and our development assistance, which is purely grants, for 2013-2018, is very close to the reported Belt and Road initiative projects provided by China," she added.

The commission said that by helping other countries, the EU would also promote its own interests and strengthen its supply chains.

The scheme, named "Global Gateway", would be made up grants and loans, and aims to finance digital, transport, energy, health, and research projects.

It plans to focus on project such as fibre optic cables, clean transport corridors and clean power transmission lines to strengthen digital, transport and energy networks, according to the commission's statement.

The commission said that the EU will invest in projects that "can be delivered with high standards, good governance, transparency, while ensuring financial sustainability at the same time".

Magic numbers

The commission is planning to leverage billions of euros, partly drawn from member states, financial institutions and the private sector.

Commission officials said the target of €300bn investment is an estimate. €18bn would come from grants from the EU budget.

Officials estimate that €145bn of investments could come from European and member state financial institutions, and the European Bank for Reconstruction and Development (EBRD).

The commission also plans to generate €135bn in investment by 2027, with guarantees from the European Fund for Sustainable Development Plus.

Last July national capitals agreed to sign off on a programme that counters China's initiative including "high impact and visible projects". Von der Leyen announced the plans first in September.

The EU is catching up to large, global investment projects in a geopolitical race for global influence.

China launched its scheme, which echoes the ancient Silk Road connecting Asia and Europe, to expand its global network. The US has also launched infrastructure programmes with Australia, India and Japan.

An initiative by the G7 countries - including Canada, France, Germany, Italy, Japan, the UK and the US - called "Build Back Better World" also aims to counter Chinese economic influence in low- and middle-income countries.

The Belt and Road initiative also has European beneficiaries: 18 EU countries are part of the initiative.

EU pitches infrastructure investment plan to rival China

Ursula von der Leyen launched a global investment operation directed at infrastructure and transport. Its aim is to compete with the China's Belt and Road. "We want to create links and not dependencies," she said.

Column

The EU's 'global gateway' - an answer to China, or a dead-end?

Will the Global Gateway become yet another dead-end? If the Green New Deal, projects to secure supplies of important minerals, the Open Strategic Economy and now this are put together, then the pieces of the puzzle could fall into place.

Opinion

Why UK-EU defence and security deal may be difficult

Rather than assuming a pro-European Labour government in London will automatically open doors in Brussels, the Labour party needs to consider what it may be able to offer to incentivise EU leaders to factor the UK into their defence thinking.

Latest News

  1. German bank freezes account of Jewish peace group
  2. EU Modernisation Fund: an open door for fossil gas in Romania
  3. 'Swiftly dial back' interest rates, ECB told
  4. Moscow's terror attack, security and Gaza
  5. Why UK-EU defence and security deal may be difficult
  6. EU unveils plan to create a European cross-border degree
  7. How migrants risk becoming drug addicts along Balkan route
  8. 2024: A Space Odyssey — why the galaxy needs regulating

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us