EU to Lay Out $46 Billion Technology Plan to Counter China
The EU will unveil its strategy next week to compete with China's massive global infrastructure spending.
(Bloomberg) -- The European Union will unveil next week its strategy for more than 40 billion euros ($45.9 billion) in technology and infrastructure spending that is a key part of the West’s response to China’s Belt and Road program.
The EU’s “Global Gateway” strategy will focus on digital, transport, energy and trade projects, according to a draft seen by Bloomberg. The plan is aimed at boosting Europe’s interests and competitiveness around the world, while also promoting sustainable environmental standards and values such as democracy, human rights and the rule of law.
The strategy follows a U.S.-led agreement reached during July’s Group of Seven summit where leaders agreed to launch a global infrastructure initiative called Build Back Better World to help narrow the gaping infrastructure need in the developing world and provide a green rival to China’s ambitious initiatives.
Any U.S. or EU effort to counter Beijing’s massive trillion-dollar project to finance infrastructure projects across the developing world is already coming late and will struggle to cut through. The Biden administration has said it hopes that by insisting on transparency and offering alternatives to the onerous debt financing required by the Chinese, the U.S. and allies can offer an alternative.
The Global Gateway plan will “provide an umbrella brand for the already extensive EU investment in infrastructure worldwide,” the document says, to allow better coordination between member states, expand cooperation with international and regional partners and make funding go further.
The EU will offer 40 billion euros in guarantees from its European Fund for Sustainable Development Plus mechanism, in addition to several billion euros in grants, according to the draft. The document also notes that under the EU’s current budget cycle through 2027, investments in connectivity are expected to rise significantly through its Global Europe development assistance program, which has an overall budget of 79.5 billion euros.
In rolling out the Global Gateway strategy, the EU will aim to back projects spanning the globe, including:
- The Western Balkans and Turkey, with the draft highlighting the extension of the trans-European transport network as a flagship initiative. It notes that the EU’s Economic and Investment Plan in the Balkans sets out an investment package that plans to harness up to 9 billion euros of grants over the next seven years.
- Europe’s eastern region, where the focus will be investments in digital and renewable energy, as well as clean energy infrastructure for developing raw materials and battery value chains in Ukraine.
- Southern Europe, with a possible grant contribution of up to 7 billion euros, the EU hopes to generate private investments of up to 30 billion euros for projects, including the production of renewable hydrogen
- Africa, where the bloc’s foreign direct investment stock reaches 222 billion euros and eclipses spending by the U.S. and China. The EU aims to develop the continent’s digital economy and boost access to the internet and transport networks.
- Central Asia, with the bloc aiming to identify the most sustainable transport connections and enhance sustainability in planning.
- The Indo-Pacific, where the EU is working to establish digital partnerships with countries like Japan on artificial intelligence
- In Latin America, the bloc plans to expand existing projects in submarine and terrestrial fiber-optic cables to other countries.
- Arctic co-financing projects, such as 5G cross-border corridors to support connectivity between the EU and the region, as well as investments in renewable hydrogen in Greenland.
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