Italy Becomes First G-7 to Join China’s Belt and Road Initiative despite Rift in Populist Cabinet

Italy Becomes First G-7 to Join China’s Belt and Road Initiative despite Rift in Populist Cabinet

The far-right League party, junior partner in the ruling populist coalition, has been opposed to the move, with its leader Salvini warning China might “colonialize” Italian markets.

Italy has become the first G-7 nation to join China’s Belt and Road Initiative despite disagreements within the populist Cabinet of the leftist Five Stars Movement and the far-right League, and seemingly causing anger in Washington as well as Brussels, Berlin, and Paris.

After Portugal joined China’s BRI at the end of 2018, Italy has become the 14th member state of the European Union to do so.

Most, though not all, of the other EU countries that have signed on to the signature foreign policy initiative of Chinese President Xi Jinping, known also as the New Silk Road, are from Eastern Europe: Austria, Croatia, Bulgaria, the Czech Republic, Estonia, Greece, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia, Slovenia.

Other European countries that have joined the BRI also include some EU candidates: Albania, Belarus, Bosnia and Herzegovina, Georgia, Moldova, Montenegro, North Macedonia, Russia, Serbia, Ukraine.

Italy’s decision join China’s Belt and Road Initiative, however, is especially notable because of its status as a G-7 member – therefore putting into question the unity of the G-7, and the only of the EU heavyweights to do so.

What is more, it comes at a time when the United States is at a trade war with China, and Germany and France are growing especially worried about Chinese investments, and their alleged implications with respect to political influence, control of key transport hubs, access to sensitive technology, and even espionage. Back in 2017, the BRI was even formally incorporated in China’s ruling Communist Party constitution.

The memorandum for Italy’s joining of the BRI was signed in Rome on Saturday as the highlight of a three-day trip to the country by Chinese President Xi Jinping, Reuters reported.

Although the concerns of Italy’s most important allies within the EU, NATO, and the G-7 over the New Silk Road have been made well known, the leaders of Italy’s populist Cabinet downplayed them when hosting Xi.

While they reiterated Italy’s full commitment to its Western partners, they argued that Italy came first when it came to the development of commercial ties.

“This is a very important day for us, a day when Made-in-Italy has won, Italy has won and Italian companies have won,” said Deputy Prime Minister Luigi Di Maio, the leader of the leftist Five Stars Movement.

Di Maio signed the memorandum of understanding with China on behalf of the Italian government in a Renaissance villa.

During Xi’s visit, Italian companies signed deals with Chinese partners initially worth EUR 2.5 billion, which Di Maio said had the potential to grow to a value of EUR 20 billion.

Italy’s populist Cabinet has thus ignored warnings from the United States over joining the Belt and Road Initiative as well as Friday’s comments by French President Emmanuel Macron that the EU must stay united on its dealing with China, which should not be defined primarily by trade.

Italy’s joining of China’s Belt and Road Initiative was in fact opposed by the far-right partner in the country’s ruling coalition, the League party led by Deputy Prime Minister and Interior Minister Matteo Salvini.

Salvini, who favors stronger relations with the United States, went as far as warning that China might “colonialize” Italian markers, and declined to meet Chinese President Xi Jinping, or attend a state dinner in his honor.

At the same time, however, the other Italian Deputy Prime Minister and ruling coalition party leader Di Maio argued that his country exported less to China than do Germany and France, and that Italy was simply catching up.

In his words, Italy’s goal was to do away as soon as possible with Italy’s EUR 17.6-billion trade deficit with China.

The Italy – China memorandum of understanding included 29 separate sections, covering cooperation in the banking sector, construction and ports, agricultural exports, media, science and technology, and even the return of Chinese cultural artifacts held in the European country.

“There is a lot of ‘Made in China’ coming into Italy and too little ‘Made in Italy’ that goes into China,” said Di Maio who is Italy’s Deputy Prime Minister for economic development.

After meeting with Di Maio and Italian Prime Minister Giuseppe Conte on Saturday morning, China’s President Xi went to Palermo in Sicily, and was due to head to Monte Carlo on Sunday.

His short European tour is due to be completed in France with talks with French President Macron and German Chancellor Angela Merkel.

China’s Belt and Road Initiative was announced in 2013 as a plan to establish a belt of land corridors and a road of maritime shipping lanes in Asia, Europe, and Africa but including also digital infrastructure and cultural exchanges.

It is funded by Chinese state-owned firms through loans and credit that could reach USD 1.3 trillion in value by 2027, according to some estimates.

Critics, however, see the BRI as a means of Beijing practicing “debt-trap diplomacy”, with the most notorious example being Sri Lanka’s having to give China control of a strategic port when it could no longer service its debts to Chinese creditors back in 2017.

(Banner image: Italian Prime Minister Giuseppe Conte on Twitter)

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