New Silk Road" project: Italy says arrivederci

Infrastructure project - New Silk Road" project: Italy says arrivederci

It began with great pomp: red carpet, guard of honor, helicopter in the air. At Villa Madama in Rome in March 2019, then Italian Prime Minister Giuseppe Conte and China's head of state and party leader Xi Jinping signed an agreement under which Italy would be the first major Western country to participate in the Chinese mega-project of a "New Silk Road".

Four and a half years later, it has now come to a very meek end: According to Italian media reports, Rome issued a formal diplomatic note informing the public of its withdrawal. Officially, there was silence on the matter.

From the official residence of current Prime Minister Giorgia Meloni, who has been at the head of a government of three right-wing parties for just over a year, the only comment on the departure from Via Della Seta(Silk Road) was: "No comment." At least there was something of a confirmation from her Foreign Minister Antonio Tajani. "We have seen that the Silk Road has not had the hoped-for effects," he said at an event organized by the Adnkronos news agency.

This is Beijing's mega-project

Launched ten years ago, the "New Silk Road" is China's global investment and infrastructure project. The initiative includes overland and maritime projects that form part of the "Maritime Silk Road".

Italy, which is chronically in debt, had to put up with a lot of criticism from its Western partners because of the project. Italy was the only country from the group of seven major democratic economic powers (G7) that decided to participate, and also the only major country from the EU. The reasons given for this were better export opportunities, the hope of investment - for example in the ports of Trieste and Genoa - and also more Chinese tourists.

For its part, China, already the second largest economic power, wants to open up new trade routes around the world, both on land and at sea. The term "New Silk Road" is derived from the world-famous ancient trade route that stretched all the way to Europe. Beijing has now invested almost a trillion euros in the project. In many developing countries, roads, railroads, airports and seaports have been built where none existed before. However, critics say that many countries are becoming increasingly dependent on China due to new debts. Around 150 countries are currently participating, including Russia and Serbia. Hungary from the EU has now joined.

Rome must not upset Beijing too much

Meloni has never made a secret of the fact that she does not like the plan. The leader of the far-right party Fratelli d'Italia (Brothers of Italy) has declared that the sovereignty of the nation is sacred. In recent months, there has been increasing speculation that the exit is imminent. The USA is also exerting pressure. The background to this is that the cooperation would have automatically solidified in March if the project had not been terminated by the end of the year.

However, Italy's aim is of course also not to upset Beijing too much. There are concerns from the company side that products made in Italy are no longer selling so well in the People's Republic. The Italians are also worried about losing lucrative orders, where they are also in competition with EU partners such as Germany and France. This is why Meloni had the Chinese assured in the farewell note that the "strategic partnership" would be maintained at all costs.

For China, which is increasingly competing with the USA, the departure certainly means a loss of prestige. When asked by the German Press Agency, the Foreign Ministry initially had no comment. When speculation first began to run high some time ago, the ministry pointed out that cooperation had been greatly expanded since the agreement was signed. Trade had increased by 42 percent within five years.

In Brussels, on the other hand, the news from Rome put everyone in a good mood. In the EU and NATO, Italy's involvement has recently been increasingly viewed as a strategic mistake and a security risk. The general aim there is to reduce economic dependencies. At NATO, there is a particular risk that Beijing is trying to "take control of key areas of the technology and industrial sectors, critical infrastructure, strategic material and supply chains".

There is also unlikely to be much positive news for China at this Thursday's EU-China summit in Beijing. Commission President Ursula von der Leyen and Council President Charles Michel want to make it clear that the EU could impose trade restrictions such as special tariffs if China continues to pursue unfair subsidy practices and closes its own market to European companies.