So the EU, a bloc of US vassals that allowed Biden to destroy Nord Stream and hasn’t invested in any infrastructure in decades, plans to outcompete China’s multi-trillion dollar global infrastructure network that has thousands of projects and 140+ nations participating? “The EU needs to offer a real alternative to China’s Belt and Road Initiative”, the chief has said, EU Commission, the same EU that is deindustrializing and has lost economic competitiveness over the last decades and is facing bankruptcy.
“The European bloc needs to outcompete Beijing’s Belt and Road investment initiative”, Ursula von der Leyen has said, at the time when the EU is running out of money – as Handelsblatt reports: The bloc has no capacity to finance important new initiatives without cutting on essential projects, the outlet reports.
The EU needs to offer a real alternative to China’s economic projects for the countries of the Global South, European Commission President Ursula von der Leyen said on Saturday.
The EU and likeminded nations must use the “window of opportunity” as “many countries of the Global South are looking for alternative funding options,” she said at the G7 summit in Japan’s Hiroshima.
Von der Leyen claimed that China’s Belt and Road Initiative – a global infrastructure investment strategy unveiled ten years ago – has been losing its appeal because many countries had “bad experiences with China.”
“They took Chinese loans and ended up in a debt crisis,” the EU official stated, adding that the European bloc and the G7 must fill the void.
“We want to put a better offer on the table. If we are in a race, we are in a race to the top,” von der Leyen said. She added that the EU is rolling out 90 “flagship projects” on different continents as part of its Global Gateway investment scheme.
Von der Leyen’s words came as G7 countries adopted a joint statement that accused Beijing of “economic coercion” and technology theft.
China, in turn, has repeatedly accused G7 members of abusing trade regulations in order to impose their will on others.
Beijing has also denied claims that the Belt and Road project hurts other nations. “The so-called Chinese debt trap is a lie made up by the US and some other Western countries,” Chinese Foreign Ministry spokesman Wang Wenbin said last year.
So the EU, a bloc of US vassals that allowed Biden to destroy Nord stream and hasn’t invested in any infrastructure in decades, plans to outcomplete China’s multi-trillion dollar global infrastructure network that has thousands of projects and 140+ nations participating?
— Danny Haiphong (@SpiritofHo) May 22, 2023
LMAO! pic.twitter.com/C55CjvqHrP
EU running out of money – Handelsblatt
The bloc has no capacity to finance important new initiatives without cutting on essential projects, the outlet reports.
The European Union’s tight budget has been under pressure lately as challenges mount, according to Handelsblatt
Higher interest rates have added pressure to the EU’s long-term budget, already squeezed by multiple crises, including the conflict in Ukraine, migration, and energy supply shortages, Handelsblatt newspaper reported on Monday.
In the aftermath of the pandemic, those issues are overwhelming the EU’s financial resources, the German outlet wrote. Budget reserves are “practically exhausted,” the article says, while challenges are growing and Brussels’ ability to act is dwindling.
The report comes ahead of an EU review of its 2024 budget as well as the so-called Multiannual Financial Framework (MFF) for the years 2021-2027.
According to the paper, the EU member states’ willingness to cover the costs of the single budget is low, particularly in Germany, the most important net contributor to the union. All of this could undermine the EU’s capacity to finance its priorities or react to unforeseen events, and puts flagship programs at risk, the outlet warns.
The report pointed out that the bloc has a lot of mandatory spending, which leaves it with less than €30 billion ($32 billion) a year to support Ukraine, accelerate the energy transformation, strengthen the chip industry, boost domestic clean-tech production, open up new sources of raw materials and counter China’s Silk Road initiative.
Confined to rigid mandatory spending, “the EU cannot rise to become a geopolitical power,” Handelsblatt concluded, noting that with the current budgetary structure the economic bloc is not up to its challenges.
Eastern European countries have reportedly borrowed around $32 billion this year, three times more than during the same period in 2022.
Poland has tapped overseas markets for nearly $9 billion, putting it second among emerging-market economies in terms of overseas borrowing, trailing only Saudi Arabia.
Meanwhile, Romania and Hungary, which have borrowed a respective $6 billion and $5 billion, are the fourth and fifth largest emerging-market borrowers. This marks the first time in a dozen years that three Eastern European countries are among the top five overseas emerging-market borrowers.
The surge in borrowing is attributable to an increasing need to dole out subsidies due to the still-raging energy crisis, as well as soaring spending related to the military conflict in Ukraine, according to Bloomberg. Eastern European countries have had to build up their military capabilities and help refugees from the neighboring state.
Meanwhile, hawkish policies pursued by key central banks have made it much more expensive to borrow in bond markets, even for highly rated nations. Poland is paying 5.5% in annual interest on a new 30-year bond, significantly above the rate the same bond would have sold for back in 2021.
Rising interest rates are projected to add to the suddenly swelling budget deficits across Eastern Europe, inevitably putting more pressure on finances in the region.
According to analyst estimates on Bloomberg, Eastern Europe’s budget deficit will surge to 4.3% of the region’s gross domestic product in 2023, up from the 1.3% recorded two years ago.
The conflict in Ukraine “hits fiscal deficits from both sides,” Daniel Wood, a fixed income portfolio manager at William Blair International, told Bloomberg. “It lowers growth, which reduces revenue collection for the government, and on the expenditure side it has been necessary for governments to help those that have been hit hard by the cost of living.”
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