Sun. May 22nd, 2022


Better late than never, and better something than nothing. This would be a justified, if only a reaction to the Global Gateway, the EU’s infrastructure investment plan launched last Wednesday with the unspoken but clear intention to counter China’s Belt and Road initiative.

The plan fulfills a promise Ursula von der Leyen, President of the European Commission, made in her State of the Nation Address in September. Her rationale was that “it does not make sense for Europe to build a perfect road between a Chinese-owned copper mine and a Chinese-owned port. We need to get smarter when it comes to these types of investments.”

Then I suggested that we must judge the initiative on three things. Will it be big enough to compete with BRI? Would it limit itself to supporting infrastructure “hardware” or also seek to share the EU’s institutional “software”, the rules and regulations that promote economic integration? Third, the lighter but not unimportant matter of a more inspiring name. (The Marco Polo project? The Magellan network?)

The name stuck. What about the other two tests?

In terms of size, Brussels promises € 300 billion over seven years. Sinici called the financial engineering behind that number, which includes funding “mobilized” from private investors by the EU’s own much smaller stake. The objection is fair, but unimportant if € 300 billion worth of infrastructure is built. The problem is not the source, but the amount of funding.

That sum would have been a game-changing commitment in the mid-2000s. That would have been sufficient as late as 2013, when Chinese President Xi Jinping first announced “the project of the century.” Today, it seems underweight against a BRI that is funded with more than $ 100 billion annually before the pandemic.

Although not quite up to the task, € 300 billion will still buy you a lot if the whole amount is realized. And every euro will give greater power because the EU is indeed adding its software to its hardware.

The new plans are explicit about this. Infrastructure projects will be designed “to strengthen convergence” with the EU’s data privacy and digital competition rules, and with European standards in transport.

This is how it should be. The EU has no choice but to try to shape its external economic relations in its own image if it wants to spice up BRI. And that’s what’s at stake, though European leaders rarely put it that way.

The mantra in Brussels is “links, not dependencies”. This is understandable: dependencies are exactly what BRI projects have created in the form of debt or data capture, such as Britain’s new spy chief highlights. The goal of Global Gateway is indeed to give countries a “nice” alternative to those traps.

But this is misleading. The EU wants – and should want – to create dependencies. Regulatory convergence does this, as does Global Gateway’s stated goal of “strengthening digital, transportation and energy networks”, and providing “supply chain integration”. That, after all, is why Beijing pursues similar goals: to make all economic relations bend to China and conform to its norms.

The EU’s doctrine should be that not all dependencies are equal, and that committing yourself to Europe gives you a better chance of both freedom and prosperity than throwing your lot at BRI.

As well as the necessary financial scope, two additional things are needed to make such a doctrine realistic. One of these is an explicit vision of how the pieces fit together. For now, Global Gateway looks like a list of unrelated building sites. But what is the form of the network that these projects are meant to shape – if there is such an intention at all?

If the aim is to build a deeply EU-centric international economy, then it will be more honest and make the initiative better coordinated.

That would be a good goal. But the other missing piece is a proper articulation of partner countries’ role in such EU-centric networks – a formal model for countries to physically, legally and institutionally engage with the EU market. An offer of a deeper link than that offered by trade transactions, yet less comprehensive than full membership of the single market, would be attractive enough for many countries to reject Beijing’s infrastructure subsidies.

Economic gravity is like the physical kind. For small bodies, it determines their possible orbits. For adults, it is the power with which it attracts others. Europe, a large bloc of small and middle countries, is still learning what economic size means.

martin.sandbu@ft.com



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