The The European Commission already has a strategy to try to neutralize China’s economic power in the world. Eight years after Beijing launched the initiative New Silk Road (Belt and road), aimed at creating two land and sea routes to improve the Asian giant’s connection with the outside world, Europe responds with its own plan. Baptized as Global Gateway (World catwalk), the objective is to mobilize 300,000 million euros in investments public-private in third countries to finance infrastructure projects that help improve connections and allow the green and digital transition to be promoted until 2027.
According to G20 estimates, the global infrastructure investment deficit it will reach 13 trillion euros by 2040. If you take into account the new investments in infrastructure necessary to limit climate change and environmental degradation, that figure shoots up to 1.3 trillion euros per year. “There is a huge need for investments” that the covid19 pandemic has highlighted, the president of the Commission, Ursula von der Leyen, insisted on Wednesday during the presentation of the initiative. According to German policy, low- and middle-income countries not only need financing, they also require “trusted partners” to help develop “quality and sustainable projects” and to deliver “tangible results that benefit the populations of the different countries. ”
And this is what the European catwalk offers, “A positive offer” with which “to forge links and not dependencies”, and with which to demonstrate to developing countries – an area dominated until now by the Asian giant – that “it is possible to respond to local needs and address global challenges” in a transparent way and sustainable. Of the 300,000 million mentioned by Brussels, some 135,000 million would come from the European Fund for Sustainable Development +, 18,000 million in the form of grants from the European budget while the remaining 145,000 would have to come from other financial and development aid institutions.
New European facility
The European Commission is also studying the possibility of creating a European export credit facility to complement existing tools between Member States and increase firepower when financing infrastructure in third countries. The objective would be to ensure a more balanced playing field for European companies operating in third countries where they are forced to compete with foreign companies doped with state funding from their respective governments.
Based on all these financing instruments, in which the private sector will play a crucial role, the EU aims to offer sound financial conditions, providing subsidies, favorable loans and budgetary guarantees to reduce the risk of investments and improve the sustainability of the investment. debt while promoting higher standards in environmental, social and strategic management. As von der Leyen has explained, the EU is not alone and it has the support of capitals such as Washington or London. European delegations in third countries will play a “key” role in identifying possible projects.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.