UPDATED: EU unveils 300 bln euro global investment scheme

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The European Commission unveiled on Wednesday a plan to invest 300 billion euros globally by 2027 in infrastructure, digital and climate projects as a better alternative to China’s Belt and Road Initiative.

The scheme, called Global Gateway, is to strengthen Europe’s supply chains, boost EU trade and help fight climate change, focusing on digitalisation, health, climate and energy and transport sectors, as well as education and research.

China launched its Belt and Road project to boost trade links with the rest of the world in 2013 and has been spending heavily on the development of infrastructure in dozens of countries around the world.

But EU officials say the financing terms offered by Beijing are often unfavourable, not transparent, and make some poorer countries, especially in Africa, dependent on China through debt.

“Indeed, countries … need better and different offers (to China’s initiative),” European Commission President Ursula von der Leyen told a news conference, unveiling the EU scheme, which she called “a true alternative”.

EU money, in the form of grants, loans and guarantees, will come from EU institutions, governments, as well as EU financial institutions and national development banks.

“The EU will offer its financing under fair and favourable terms in order to limit the risk of debt distress,” the Commission said in a statement.

“Without proper transparency, good governance and high standards projects can be badly chosen or designed, left incomplete or be used to fuel corruption. This not only stunts growth and deprives local communities but it ultimately creates dependencies, which can limit countries’ ability to make decisions,” the Commission said.

The Commission said the Global Gateway plan would aim to forge links with other countries without creating dependence.

“It will focus on physical infrastructure – such as fibre optic cables, clean transport corridors, clean power transmission lines – to strengthen digital, transport and energy networks,” the Commission said.

The Commission said that by helping other countries the EU would also promote its own interests and strengthen its supply chains, the vulnerability of which became apparent during the COVID-19 pandemic.

(Reporting by Jan Strupczewski)

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