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Connectivity Italian Style

Elena Alekseenkova

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Xi Jinping’s historic visit to Italy on March 21–23, 2019 was marked by the signing of a memorandum on Italy’s joining the Chinese Belt and Road Initiative. Despite the fact that 13 other EU countries have signed similar memorandums with China, the significance of Italy’s decision cannot be overstated, as it is the first G7 country and the first founding member of the European Union to officially confirm its readiness to participate in Silk Road projects.

Ever since Undersecretary of State at the Italian Ministry of Economic Development Michele Geraci announced the imminent signing of the document on March 5, 2019, warnings have flooded in from Brussels and Washington about the possible consequences of such a rash step. On March 6, U.S. National Security Council Spokesman Garrett Marquis said that the actions of the Italian government would end up harming Italy’s global reputation in the long term. Similar statements could be heard coming out of Brussels. On the eve of Xi Jinping’s visit, President of the European Parliament Antonio Tajani said that Italy was committing a grave mistake and that “selling ‘Made in Italy’ does not have to mean giving up your sovereignty to the Chinese.” As European leaders try desperately to form a common line of defence against China’s penetration into strategic sectors of the European economy in the run-up to the EU–China Summit on April 9, Italy is again showing no signs of European solidarity.

Italian Logic

 “I am convinced that Italy must respect its Atlantic allies and always fulfil its obligations. However, it may also choose how and where to go. We need to make a choice consciously and responsibly,” Deputy Prime Minister of Italy Luigi Di Maio said in the Five Star Movement blog in response to the alarmist signals coming from the United States. “I hope that the League adheres to the same principles, because I have seen various positions over the past few days, some of them shaped by what other countries want and not for the benefit of Italy.” “Today,” the Deputy Prime Minister continues, “the idea of ‘Made in Italy’ wins. With the Belt and Road Initiative, Italy has made the decision to be more sovereign… It is not a political union with China, but rather a business opportunity. The United States remains our main ally, and NATO continues to be our home. But the Belt and Road Initiative is a step forward for Italy.”

According to Prime Minister Giuseppe Conte, Italy’s participation in the Silk Road project is completely in line with the country’s membership in NATO and the European Union, since it is not a political union, but simply the possibility of trade and economic cooperation. What is more, by interacting with Beijing, Rome is determined to get its new partner to adopt European standards and norms in the bilateral relationship.

“The main task is to help Italian companies develop and expand exports to China comparable to that of France and Germany… Clearly, Italian security is of paramount importance to us, which is why we will analyse and assess extremely carefully what is going on in sectors that are of strategic importance for Italy and its allies – telecommunications, energy, ports and infrastructure. The security of the Italians comes first, followed by economic interests,” claims the League, so as not to scare its alarmist-minded electorate.

“I want to control the strategic sectors, to ensure national security. Because the keys to the house should belong to the Italian people,” Deputy Prime Minister Matteo Salvini stresses. Minister of Foreign Affairs Enzo Moavero Milanesi has traditionally tempered the discourse, assuring Italy’s European partners that it will act in line with EU documents and decisions, with the understanding that issues of security are a priority for all EU member countries. But the leader of Forza Italia, Silvio Berlusconi, does not share the enthusiasm of the current government, calling China a “communist and totalitarian” country “that seeks both economic superiority and political hegemony.” A fierce discussion is raging in the Italian media about the benefits and risks of the new partnership with China.

The idea of building up cooperation with China is not new. Paolo Gentiloni’s cabinet worked actively on developing ties with the country. Italy’s new “government of change” contains at least two people who actively support deepening cooperation with China, namely Minister of Economy and Finances Giovanni Tria and Undersecretary of State at the Italian Ministry of Economic Development Michele Geraci.

When he was still a student at the University of Rome, Giovanni Tria studied the success of the Chinese economy, and in the late 1970s he had the opportunity to observe the initial results of the economic transformation in Beijing first hand. His first official visit as Minister of Economy and Finances was to China. Michele Geraci is very familiar with China, having lived there for over ten years. According to Giovanni Tria, the new stage of relations between Italy and China will not only provide them with new opportunities to expand cooperation in sectors of mutual interest, but will also allow Italy to become a champion of developing cooperation between the European Union and China in addressing the key issues of globalization and international cooperation. In other words, Italy wants to significantly increase its role in the dialogue between the European and China, taking the initiative and positioning itself as a driving engine in the process. Despite the fact that 13 EU countries have already signed similar memorandums with China (Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Greece, Lithuania, Latvia, Malta, Poland, Portugal, Slovakia and Slovenia), they are, as far as Italy is concerned, peripheral countries that carry little weight in the EU economy and are incapable of becoming drivers of EU–China cooperation. Unlike Italy, which after Brexit will be the third largest economy in the European Union and which, moreover, is one of its founding members.

Geraci also acknowledges the desire to take the initiative in the dialogue, emphasizing that it is a matter of tactics: “Italy should feel more free than the other 27 EU member countries. China prefers bilateral cooperation and does not like to wait for the approval of the EU, which often takes a long time. That’s why we need to take the initiative… The does not mean circumventing Europe, but rather leading it and showing it the way forward.” According to Geraci, Italy has much to learn from China: how to achieve GDP growth of 9.5 per cent; how to save 900,000 people from poverty; how to increase the income of the rural population from $130 per capita to $13,000 per capita; how to effectively control internal migration, which makes up 15–20 million people per year in China, etc. Italy, for its part, should become the main European terminal of the Maritime Silk Route. However, in order to avoid becoming a “terminal to nowhere,” Italy must help China build the land section of the Silk Road, including in Central Asia and the Caucasus.

According to Geraci, the Italian government faces two main tasks in terms of ensuring the country’s economic interests: attracting investments (and if willing investors can be found, the relevant agreements need to be put in place as soon as possible) and increasing exports (where small and medium-sized enterprises need help to start exporting their goods to China). To be sure, China has invested heavily in Italy, although mostly in the form of mergers and acquisitions and the purchase of shares, rather than setting up new projects and enterprises. Accordingly, the government’s task is to reorient the flow of investments in such a way that they help create jobs and increase productivity and, consequently, GDP. Geraci complains that Italian investments have created 50,000–60,000 jobs, while just 2000–2500 have been created in Italy. According to him, China should have a vested interest in this because, in addition to its favourable geographic location, Italy has another important asset, namely, “know-how.”

The Realities of Economic Cooperation: The Balance is not in Italy’s Favour

China is one of Italy’s key foreign trade partners. In 2018, China accounted for 3 per cent of Italy’s total exports, which amounted to approximately 13.7 billion euros. China ranks fourth in terms of Italy’s exports, behind the European Union (55.5 per cent), the United States (9.1 per cent) and Switzerland (4.6 per cent). In terms of Italy’s imports, China is second only to the European Union (7.1 per cent of the country’s total imports). China is the first destination market for Italian exports in the Asia Pacific, and eighth overall. However, the trade balance began to tip in China’s favour in 2001. Despite the fact that the trade balance increased by 7 per cent in 2007, and by a further 9.2 per cent in 2016–2017, it was still not in favour of Italy. As of year-end 2018, Italian exports to China totalled 13.2 billion euros, while imports from China amounted to 30.8 billion euros. Italy is the third-largest importer of Chinese goods in the European Union, behind Germany and the United Kingdom, and the fourth-largest exporter Behind Germany, the United Kingdom and France. Italy’s share in the Chinese market stands at 1.1 per cent, compared to 1.4 per cent for France and 5.4 per cent for Germany.

Italy wants to significantly increase its role in the dialogue between the European and China, taking the initiative and positioning itself as a driving engine in the process.

In 2000–2018, Italy was among the main targets of China’s purchases” alongside the United Kingdom and Germany, with Italy attracting 15.3 billion euros, compared to the United Kingdom’s 22.2 billion and Germany’s 46.9 billion. China is the United Kingdom’s second-largest importer and exporter and the largest importer and exporter for Germany. According to analysts at the Italian Institute for International Political Studies (ISPI), Brexit could have a positive effect on these dynamics for the European Union, given the fact that the United Kingdom can no longer act as an entry point for investments into the EU markets.

Chinese capital is already penetrating into Italian infrastructure facilities. For example, China’s COSCO Shipping has owned 40 per cent of the shares in the Vado Ligure terminal on Italian Riviera since 2016, with another 9.9 per cent of shares in this terminal belonging to the Port of Qingdao in China. Chinese investors are also interested in the ports of Genoa and Savona, where an agreement is expected to be signed with Chinese Communications Construction Company (CCCC). There is talk about the implementation of the “Trihub” project in Trieste on the Adriatic coast. China Merchants Group is expected to invest in the project. The giant CCCC intends to make a huge financial outlay (approximately 1.3 billion euros) on the construction of the Port of Venice. Remaining in the Adriatic, China Merchant Group invested 10 million euros in the Port of Ravenna in 2018. Chinese have become shareholders in recent years in a number of companies that are key for the Italian economy, including FCA Italy S.p.A., Telecom Italia, Enel, Generali, Ansaldo Energia, Cdp Reti, among others. In 2015, China National Chemical purchased Pirelli, one of the world’s largest tyre manufacturers. More recently, the famous Italian brand Candy was purchased by the Chinese giant Haier. However, the number of Chinese “purchases” in the European Union has started to drop over the past two years, which may be due to the latter’s suspicious attitude towards Chinese capital in the context of the trade wars between Washington and Beijing.

It is not so easy for Italian products to break into the Chinese market, however. For example, recent studies carried out by the Italian National Institute of Statistics (ISTAT) show that in 2018, imports of agricultural products from China exceeded exports to China by 35 per cent. One reason for this is that Italian apples, pears and grapes cannot make it onto the Chinese market because of the ongoing trade barriers that are designed to protect national production.

On the whole, however, the history of economic cooperation between Italy and China in recent years has clearly not favoured Italy. Despite the fact that the actual volumes have increased, Italian exports to China went down in 2018, and Rome is clearly not in the economic position to dictate terms to Beijing. According to the European Commission’s most recent forecasts of GDP growth in the EU countries for 2019, Italy is expected to have the worst growth rate of all 28 member states, at just 0.2 per cent, while incoming investments will not increase until 2021.

Connectivity Italian Style: Naivety or Sober Calculation?

On the one hand, Italy’s approach to the Belt and Road Imitative and the prospects for cooperation with China may seem somewhat naïve and even rather bold. According to some experts, the difficult economic situation in the country may make it dependent on Chinese investments, while the experience of Greece and Sri Lanka is confirmation of the fear that the facilities constructed may eventually fall into the hands of the primary investor. The economic situation in Pakistan clearly demonstrates the risk of becoming dependent on China economically. In summer 2018, the new government of Malaysia expressed its dissatisfaction with the terms of its deal on the Silk Road Economic Belt. The experience of Eurasian Economic Union (EAEU) countries that signed memorandums on the Silk Road Economic Belt over five years ago shows that exports to China have not increased several times over. What is more, the transport routes did not connect the EAEU as countries of the Union had hoped. And the thousands of new jobs that had been promised to the citizens of Central Asian states never materialized.

The lack of transparent rules of the game. Dumping. The use of “grey” practices by Chinese companies. The absence of guaranteed reciprocity in commerce and investment. The use of business standards that are alien to those in the west. The prevalence of discriminatory practices against foreign companies entering the Chinese market. This is just a small list of the risks that come hand in hand with Chinese investments. And it would seem that the Italians are all too aware of this. So, what exactly is Rome hoping for?

In the run-up to the President of the People’s Republic of China visit, a number of Italian media outlets speculated that the purpose of the trip may be to take on a part Italy’s national debt. However, Minister of Economy and Finances Giovanni Tria stated that this was not the case, and that the Chinese investors were there to assess the prospects of purchasing Italian government bonds on the same terms as other foreign investors. In addition, according to Tria, the financial situation in the country had stabilized since the budget had been approved by the European Commission.

Judging by the words of Tria and Geraci, it can be assumed that Italy hopes to reclaim its position as a “protagonist” in determining the European Union’s foreign economic and political priorities. However, the take-it-or-leave-it approach taken by the Italian leadership in its decision to sign a memorandum with Beijing is unlikely to elicit enthusiasm in Brussels about the Italian initiative. What is more, given the desire of Paris and Berlin to form a single EU position on the global stage, the Italian government’s attempt to “run ahead of the train” will hardly be seen as a blessing for the European Union as a whole. And the fact that the Italian government recently backtracked on its decision regarding new rules of the game for foreign investors by not supporting the European Union’s consolidated position on Chinese investments and Huawei effectively reduces the country’s chances of becoming a driver of cooperation with China to zero.

It would seem, however, that Italy was left with no choice, and Brussels certainly shares a portion of the blame for this. The economic situation in the country really is difficult. Meanwhile, the Italian government is openly described as a “leprosy” in Paris and Berlin, and not as a third party in the “tandem” that is constructing a new Europe. Brussels predicts a deepening of the recession, offering no way out of the economic deadlock. Economic cooperation with Russia cannot be intensified because of the sanctions and the risk of an open confrontation with Brussels and Washington if they are ignored. This is why the new partnership with China is the only opportunity available to Italy on which Brussels has not yet defined a categorical position, be it positive or negative. So, Italy has to seize the opportunity while there is still a chance and hope that Washington will put forward a better option at the last minute…

First published in our partner RIAC

PhD in Political Science, RIAC Program Manager, Research Fellow at Centre for Global Problems Studies, MGIMO-University

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How Romania’s battles over corruption hamstrung economic progress

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When Romania took over the rotating presidency of the Council of the European Union in January, news coverage in Western Europe mostly focused on the tensions between Brussels and Bucharest over the latter’s judicial reforms. Jean-Claude Juncker publicly called Romania’s ability to fulfil its presidential duties into question; the European Commission, meanwhile, accused the ruling Social Democrats (PSD) of backsliding on corruption.

Since then, however, Romania has executed its presidential duties without a hitch, hosting European leaders for a major EU summit in Sibiu on May 10th that earned plaudits from top EU officials like Donald Tusk. In hindsight, has the overarching media narrative ignored important developments inside Romania? Does the Sibiu summit demonstrate that Romania has regained its footing as one of Europe’s most dynamic economies?

Economic growth no longer extraordinary

Romania’s economy, while still growing at an impressive rate, has slowed down from the remarkable rates the country was registering as recently as 2017— when its 7% expansion outpaced nearly all European peers. 2018 saw growth rates of 4%, while estimates point to 3.5% for 2019.

Since it joined the European Union in 2007, Romania’s per capita national output doubled to roughly 60 percent of the Eurozone average. Record lows in unemployment led to double-digit average wage growth over the last four years. But the recent downwards trend has left many wondering whether the Romanian economy will ever resume its previous rate of development.

Is the DNA’s aggressive prosecution scaring off foreign investors?

Bucharest’s economic slowdown is due to a variety of factors, from tightened global financial conditions to falling birth rates. Foreign investors, however, may also be skittish thanks to the long-running battle between Romania’s political establishment and its controversial anti-corruption agency, the National Anticorruption Directorate (DNA). Under the leadership of agency head Laura Kövesi, the DNA undertook (by its own count) 2,396 investigations targeting Romanian magistrates between 2014 and 2018. Kövesi’s tenure saw over 1,000 figures from the country’s political and business circles convicted for corruption.

The DNA’s swathes of indictments targeting Romania’s leading political figures, with charges ranging from forgery to money laundering, have certainly played into the country’s reputation for corruption. That image has hamstrung Romania’s ability to attract foreign capital and investment, from Europe and beyond.

EU leaders, meanwhile, have heaped praise on the DNA’s stack of convictions, holding the anti-corruption agency up as a model for other European countries to emulate. Concerns have mounted, however, that the DNA is abusing its power and reverting to communist-era investigative practice.

Long lists of convictions—but at what cost?

Hiding behind the DNA’s unusually-high conviction rates were potential due process violations, including lengthy pre-trial detainment periods equivalent to imprisonment before having been sentenced by a court of law, or otherwise threatening suspects that a lack of cooperation could see their family members prosecuted. Increased scrutiny of these violations may help explain why the number of cases resulting in acquittals rose markedly, from 12.2% in 2017 to 36.3% in 2018.

Some of the DNA’s most prominent targets have drawn parallels between its behaviour and that of Romania’s Communist-era security services. Alina Bica, who formerly served as chief prosecutor for organised crime and was arrested in 2014, described her experience with the DNA as “like in the 1950s when the communists came. You get called an enemy of the state, you get put in the truck…they damage your family.” Kövesi reportedly made a personal visit to the Supreme Council of Magistrates to persuade them to sign off on Bica’s arrest, while Bica’s husband was targeted with charges of tax evasion and her lawyer was also detained.

Many of those singled out by the DNA accuse the body of pursuing political or personal vendettas. Bica, for example, claimed the charges against her stemmed from her 2012 investigation into Transgaz, where Kövesi’s brother served as a director. PSD spokespeople have suggested treasurer Mircea Drăghici, currently under investigation for embezzling party funds, is being targeted as part of the lead-up to this month’s European elections.

Troubling collaboration with the intelligence services

Recent revelations about the DNA’s investigative tactics have given new life to comparisons between today’s anti-corruption czars and the communist-era Securitate secret police. Earlier this year, Romania’s Constitutional Court ruled secret protocols between DNA prosecutors and the country’s domestic intelligence agency, the SRI, were unconstitutional. The Constitutional Court concluded that the SRI, successor to the Securitate, had signed agreements allowing the intelligence agency to circumvent the authority of prosecutors in criminal investigations, while simultaneously conducting over 20,000 wiretaps a year on behalf of the DNA—an excessive violation of privacy.

The investigation by the Constitutional Court culminated in Kövesi’s removal from her position in 2018. Kövesi herself has been indicted on charges of corruption and abuse of office, relating to allegations by Romanian businessman Sebastian Ghita that Kövesi strongarmed him into paying for the repatriation of a fugitive from Indonesia. Romanian police claim they footed the bill, but criminal proceedings are ongoing. The former prosecutor nevertheless retains many fans in Brussels. Allies in the European Parliament want to name her to the new position of EU Chief Prosecutor despite the ongoing investigation in Romania.

Increased transparency

With the steady release of DNA documents to the newly formed Special Section for the Investigation of Crimes Committed by Magistrates and the National Union of Judges in Romania, which both operate independently of the DNA, efforts to increase transparency in Romanian governance may soon move beyond the bitter political rivalries that undermined Romania’s political stability and global reputation.

While the Sibiu summit was a political success, the economy is also regaining its footing. Consumer confidence is recovering, with better prospects for future savings. Wage growth remains impressive while lending activity continues to expand. And CFA Romania, an association of investment professionals, released a report predicting Romanian economic activity will improve over the next 12 months. It seems that, despite the corruption battles of the past several years, both Romanian businesses and consumers remain optimistic about their future prospects.

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Any signs of a chill between France and Germany?

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The past few months have seen many signs of growing friction and divisions between the two European superpowers, Germany and France. Before the February vote on changes to the EU Third Energy Package, meant to expand the European Commission’s power to regulate Europe’s electricity and natural gas market, France opposed, until the very last moment, Germany’s position on the issue. In April, Paris and Berlin failed to agree on how much more time Britain should be given to decide on its withdrawal from the EU. During the recent presidential elections in Ukraine, France and Germany supported various candidates. Moreover, they are equally divided on who will be the new head of the European Commission. What is happening in relations between members of the “European tandem”?

During the latter half of 2018, it looked as if relations between the EU’s two powerhouses were reaching a new strategic level. In a joint statement made in Meseberg in June, Berlin and Paris outlined their shared vision of the European Union’s future development. In late August, French President Emmanuel Macron and German Foreign Minister Heiko Maas simultaneously spoke out about a new role for Europe to make it “sovereign and strong.” During their informal meeting in Marseille in September, Emmanuel Macron and Angela Merkel agreed on a coordinated response to the main challenges facing Europe and on concerted work on shaping the “agenda for Europe.”

In November, the two leaders spoke in favor of creating a “European army,” “real Pan-European armed forces” capable of defending Europe. And in January of this year, they inked a broader cooperation accord in Aachen, which commentators described as a “new big step” in bringing the two countries closer together. The Treaty of Aachen covers new areas of political cooperation, including common projects and commitments in the fields of defense and international relations.

Just a month later, however, the Franco-German rapprochement hit a snag over two strategic projects worth billions of euros, namely the Nord Stream 2 gas pipeline and trade relations with the United States. Here the interests of Paris and Berlin differ the most. Underscoring the seriousness of the rift, Emmanuel Macron canceled a planned trip to a security conference in Munich in what many commentators described as a “demonstrative” move. As for the issue of completing the construction of the Nord Stream 2 gas pipeline, the compromise reached by France and Germany and approved by the European Parliament, imposed on Berlin “a formula that the German government wanted to avoid.”

Regarding the issue of trade relations with the United States, it wasn’t until mid-April that Brussels collectively managed to prevail over France, which had been blocking the start of pertinent negotiations with Washington.  Any delay may cost the German automakers multi-billion dollar fines from the United States. If the French succeed in delaying the start of negotiations, Germany, which is already experiencing a sharp slowdown in economic growth, may end up the loser again.

France’s sudden move left the German media guessing whether Macron’s actions were dictated by his displeasure about Berlin’s “slow response” to his initiatives, or by Donald Trump’s threat to sanction companies involved in the construction of the Nord Stream 2 pipeline, including the French concern Engie. Or maybe Macron had resorted to this “show of force” in a bid to strengthen his hand amid the conflict with the “yellow jackets” and growing tensions with Italy?

Indeed, the statement made in Meseberg and the treaty signed in Aachen could have proved too much of a compromise for Macron, if not a serious blow to his ambitions. According to critics, “the Treaty of Aachen dodges the most sensitive topics characteristic of modern Europe.” Including migration and political unification of Europe – something Macron is so eager to accomplish. The treaty makes no mention of a common EU tax and financial policy, while the issue of creating a single economic space is spelled out declaratively at best. Angela Merkel essentially emasculated virtually all of Macron’s initiatives pertaining to the financial and economic reform of the EU and the Eurozone. Emmanuel Macron has been out to become one of the EU’s leaders, or even its sole leader, ever since he became president in 2017. All the more so following Britain’s exit from the bloc and amid the ebbing political authority and the planned resignation by 2021 of German Chancellor Angela Merkel, once the informal leader of a united Europe.

The current political situation in France is also calling for more decisive actions by President Macron. To ensure at least a relative success in the upcoming European elections, he needs to enlist the support not only of the traditional left-and right-centrists, but possibly of some representatives of the new European right too. Whether or not Angela Merkel stands down in 2021, or after the elections to the European Parliament (as has been rumored since April), Emmanuel Macron essentially remains the only top-level proponent of greater European integration. (Unless Merkel ultimately moves to the head of the European Commission, of course). With Macron eyeing a second presidential term in 2022, the advancement of the modernization model for France depends directly on the success of the European project. And here any significant changes in the European Union “mainly depend on the position of France’s privileged partner – Germany.”

All this means that Macron needs a breakthrough now that Berlin is going through a “complicated power transit” with Merkel having resigned as the head of the CDU and preparing to hand her post as Federal Chancellor over to a successor. Therefore, she is now taking her time and, according to her successor as CDU leader, Annegret Kramp-Karrenbauer, is holding out for a new vector in the development of the European project as “the common denominator of the distribution of political forces after the elections.” Does this mean that Berlin’s is staking on the success of its candidate in the ongoing struggle for the next president of the European Commission? For the first time ever, the CDU and the CSU have managed to nominate a common candidate who has “good chances” of heading the EU’s executive body.

Meanwhile, Berlin is facing an intractable dilemma. Since 1949, “avoiding by all means situations necessitating a hard choice between France and the United States has been a key principle of German foreign policy.” This approach “survived all governments and coalitions, and was maintained after the reunification of Germany.” Under the present circumstances, however, remaining firmly committed to the transatlantic relationship threatens to further destabilize the European integration project, which is now seen as being key to Germany’s future. Simultaneously, a course aimed at minimizing damage from the policy of external powers that threatens the fundamental German interests might necessitate radical and ambitious geopolitical maneuvers that would almost inevitably revive the Europeans’ and Americans’ historical fears of “German instincts.”

US and British analysts already worry that “the

[geopolitical]

shackles that are voluntarily accepted [by Germany] can be thrown off.” They also wonder how long it will take before new generations of Germans want to restore their country’ full state sovereignty.

In Germany itself, promotion of such slogans have already given the Alternative for Germany party (AfD) the third largest fraction in the Bundestag. A major paradox of the current European and German policy is that Berlin’s activity or passivity is equally detrimental to the Pan-European project and could eventually lead to the EU’s fragmentation and even disintegration.

However, the Franco-German “tandem” is already being dogged with contradictions and compromises, which are highly unpopular among many in the German establishment. The cautious response by many EU members to the latest joint geopolitical initiatives of Berlin and Paris, gave Germany more reasons to fear that Macron’s global ambitions could exacerbate the differences that already exist in the EU. Many in Germany have long suspected Macron of wishing to make the EU instrumental in his foreign policy aspirations.

Some experts still believe that at the end of the day the current chill between Germany and France may turn out to be just a sign of the traditional “propensity for taking independent political decisions.” The sides are sizing each other up to see “who will be setting the rules of the roadmap in the future.”  Also, Paris’s tougher stance towards Berlin may be a tactical ploy, a pre-election maneuver to “hijack” part of the agenda from the “national populists” of Central, Eastern and Southern Europe where many people are not happy about the German “diktat.”

Emmanuel Macron has proved once and again his ability to ride the wave of public discontent with certain issues. His Plan for Europe, published in early March, carefully avoids any mention of France’ and Germany’s leading role in advancing EU reforms.

On the other hand, the foreign policy of the leading European powers has a long history, and long-term geopolitical considerations continue to play a significant role. Germany, for one, has traditionally been looking for a counterweight to the Anglo-Saxons, while France – to German dominance in Europe. As a result, the search by Paris and Berlin for common points of political contact is now turning into intense efforts to find the “lowest common denominator.” The overall impression is that we will only be able to see a greater deal of certainty in relations between the two countries after the results of elections to the European Parliament have been summed up.  The distribution of roles both within the “European tandem” and in the EU as a whole depends on which political forces – pro-Macron or pro-Merkel, the Europeans will vote for.

 First published in our partner International Affairs

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Sino-Italian Partnership and European Concern

Mohamad Zreik

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A crucial moment in modern European history is that the European doors opened to Chinese President Xi Jinping in Italy during a reception that is like receiving kings and leaders. Once again China is moving west despite all the American warnings from the Chinese dragon coming from the East, and this time it was Italy’s accession to the One Belt One Road initiative.

The Chinese president said that his country’s relationship with Italy is excellent and that the Sino-Italian common interests are the basis for a fruitful future. The Italian prime minister said that Italy is a key partner in the Belt and Road initiative and that trade between Italy and China should increase. But all this positive atmosphere is met with dissatisfaction and fear by the United States and some Italians, which is totally opposed to dealing with China because it considers it a threat to its national security and therefore to the national security of Italy.

In order to prevent espionage or transfer of experience by the Chinese, it was agreed to establish an oversight authority. In an expression of US rejection of the agreement, White House official Garrett Marquis wrote last week on Twitter that Rome “does not need” to join the “New Silk Road”. In an effort to ease US concerns, Luigi Di Maio said before taking part in an Italian-Chinese economic forum in Rome that the relationship will not go beyond trade, as we remain allies of the United States, and remain in NATO and the European Union.

The Italian economy, which is in a recession, is pushing the Italian government to form an alliance with China. Many European policy experts consider Italy to be a Trojan horse for China in the European region, which will have political implications for the future of the EU and the future of the Italian-American relationship; especially as the Chinese giant Huawei is expected to participate in the launch of the technology “G5” mobile phones in Italy.

China’s opening up is not limited to Italy, but to Europe as a whole. In the last visit by the Chinese president to Europe, he moved from Italy to Monaco and Paris and met President Emmanuel Macron, who is trying to open up to Beijing. German Chancellor Angela Merkel has opposed the Sino-Italian rapprochement with signing the agreement to join the Belt and Road Initiative, so that Italy will be the first G7 country to join the initiative.

Beijing is interested in investing in Italian ports, including the port of Trieste on the Adriatic, to boost its exports to Europe. Italy seeks to balance trade with China. According to official data, trade between the two countries grew by 9.2% compared to 2016, reaching 42 billion euros. Italy managed to cut its trade deficit with China by 1.37 billion euros, increasing exports to Beijing by 22.2%, while imports rose to 28.4 billion euros, an increase of 4% compared to 2016.

But the most important issue remains the weak Italian economy, which will survive under Chinese debt, and the Sri Lankan experience proves that China is dealing with countries with economic interests. So, will the European gateway withstand the Chinese economic giant, or will it be a Chinese economic and political region in the future?

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